Independent LTC Pharmacy Advocacy Group Urges Stronger Effort on PDP Transparency in Response to CMS Draft 2017 Medicare Part D Call Letter

DATE: March 7, 2016

Senior Care Pharmacy Coalition (SCPC) Suggests PDPs May Not Be Adequately Complying With Recent Transparency Enhancement Initiatives

Washington, DC – In response to the Centers for Medicare and Medicaid Service’s (CMS) draft 2017 Part D Call letter, the Senior Care Pharmacy Coalition (SCPC) urged still more rigorous efforts to ensure greater prescription drug plan (PDP) transparency in regard to Maximum Allowable Cost (MAC) pricing – despite a recent CMS initiative to do so.

Says SCPC President and CEO Alan G. Rosenbloom in his letter:

“The SCPC appreciates the efforts that CMS has taken regulatory steps to require PDPs to properly provide pharmacies with timely notice of changes in MAC prices. Although this requirement went into effect only two months ago, the LTC pharmacy experience to date suggests that PDPs are not appropriately complying with their notification requirements. As a result, LTC pharmacies, and likely all pharmacies in the Part D program, are not receiving the transparency and notice that CMS required.

“The need for greater transparency on this issue is acute. A recently published study by Avalere Health demonstrates the dramatic and inexplicable variation in MAC pricing between PDPs and even within a single PDP from day to day. This disturbing trend highlights the need for clarity and transparency by the PDPs, and particularly for a clear and timely explanation of the changes in the marketplace that have prompted changes in payment under the MAC methodology, because MAC pricing is supposed to be driven by actual marketplace changes but available data suggests otherwise.

“Unfortunately, notwithstanding the clear CMS requirement that Plans report MAC pricing changes, the Plans do not appear to be complying in any way that meaningfully provides LTC pharmacies the information they deserve to understand what they will be paid for the medications and consultative services they provide and the market-based reasons for changes in their payments.

“To ensure appropriate compliance with the CMS reporting requirement, and to ensure even greater transparency on MAC pricing issues, we request CMS to require that Plans report for a period of two years the frequency of changes of MAC prices, the correlation of the price changes to Plan notices to pharmacies, the degree to which they explain that marketplace changes precipitating price changes and the percentage increase or decrease of each price change. By tracking this data, CMS will be able to determine Plan compliance with the new reporting requirements, as well as determine whether MAC prices are being misused in the Part D program.”

In addition to PDP MAC pricing transparency concerns, Rosenbloom and the SCPC also urged CMS to revisit and amend the Call Letter to address: (1) network adequacy, “where we urge CMS to adopt clear LTC network adequacy standards; (2) prior authorization, where we recommend appropriately tailoring the formulary management technique in the case of LTC pharmacy and data collection on payment for interim fills while requests are pending; (3) medication therapy management, where we commend CMS for its active encouragement of MTM and suggest even greater expansion of the MTM program; (4) opioid issues, where we welcome opioid utilization and control efforts, and urge CMS to carefully apply such analysis to the appropriate care settings.”