Inside Health Policy: LTC Pharmacies To HHS: Remove Us From Provider Relief Cap

DATE: October 12, 2021

By Dorothy Mills-Gregg
Inside Health Policy

Long-term care pharmacies are asking HHS to separate them from retail pharmacies when calculating Phase 4 provider relief distributions, calling the 10% cap on annual patient care revenue arbitrary and unfair when long-term care pharmacies’ average patient care revenues are 30% to 35% of their total revenues.

Long-term care pharmacies are also concerned they’re being left out of the rural provider relief distribution because HHS won’t count Medicare Part D and other bundled payments as revenue indirect payments that suppliers received from nursing homes.

HHS didn’t formally recognize long-term care pharmacies as eligible for provider relief until April 2021, five months after the Phase 3 distribution closed. The Senior Care Pharmacy Coalition members who applied before the announcement received mixed results — some were rejected for COVID-19 relief while others who received it sometimes had it taken away.

Now long-term and retail pharmacies qualify for provider relief, but HHS will only reimburse lost patient care revenues and expenses, like staffing and medical supplies. Pharmacies cannot be reimbursed for lost revenue attributable to selling fewer drugs or product.

“Like it or not, the limitation on ‘okay, we don’t pay for stuff’ — I get it. But why then cap it after you’ve said that. That’s what I don’t get,” SCPC President and CEO Alan Rosenbloom said.

The agency in charge of distributing provider relief, the Health Resources and Services Administration, said it used industry estimates of revenue and operating expenses from patient care to set the cap at 10% on pharmacies’ and durable medical equipment suppliers’ claimed annual gross revenue.

But the SCPC says long-term care pharmacies’ average patient care revenues are 30% to 35% of their total revenue. Advocates say it would be easy for HRSA to exclude long-term care pharmacies from the cap.

“It doesn’t increase the administrative burden, it doesn’t require re-doing the methodology, and it is a fair solution,” Rosenbloom said. “It’s particularly disappointing to me because there’s a lot of discussion about trying to make the distributions from the provider relief fund more equitable than they have been in the past and fairer to providers that may have not quite gotten a fair shake last year, and somehow that hasn’t happened for long-term care pharmacies.”

SCPC is also concerned that HRSA will not count indirect payments as revenue when calculating the American Rescue Plan rural distribution. This limits how much long-term care pharmacies can receive in rural provider relief as part of their revenue comes from Medicare Part A and Medicare Advantage bundled payments paid to nursing facilities for redistribution. HRSA also won’t count Medicare Part D as revenue.

“So how can you say pharmacies are eligible for relief, and pharmacies provide patient care services, and those patient care services are recognized in terms of payment by what you get for Part D dispensing fees, but we’re going to consider them?” Rosenbloom said.

If the administration’s commitment is to equity, then HHS should be able to fix these two issues by the Phase 4 distribution application deadline of Oct. 26, he added.

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