Restricted network pharmacy plans encourage members to use national pharmacy chains (such as CVS or Walgreens), which are called preferred network pharmacies. These preferred pharmacies offer covered drugs to plan members at lower out-of-pocket costs than what the member would pay at a non-preferred network pharmacy. A non-preferred network pharmacy, on the other hand, is often the small community pharmacy in your town.
Many of the largest Part D plans have restricted networks, including Humana Walmart-Preferred Rx Plan, Aetna CVS/pharmacy PDP, First Health Value Plus PDP, Rite Aid EnvisionRx Plus, AARP Medicare Rx Preferred, and CVS Caremark Plus. Beneficiaries are attracted to these plans because of the low premiums and copays.
In its 2014 Call Letter, the Centers for Medicare & Medicaid Services (CMS) remind plan sponsors that beneficiary communications regarding preferred networks must be “clear and unambiguous.” In addition, CMS reminds Part D plans that the plans can never–under no circumstances–require beneficiaries who get Extra Help from Medicare and qualify for low-income status (LIS) to use a preferred network pharmacy in order to get their LIS copays.
According to groups like the National Community Pharmacists Association and the Indo-American Pharmaceutical Society, many Medicare beneficiaries are confused by Part D marketing activities that led them to sign up for a “preferred network” plan, only to later find out that the closest pharmacy in the preferred network is 20 miles from their home.
This week, the IAPS posted a sample letter to CMS on its website, and asked that every independent pharmacy owner cut and paste the letter and send it to CMS. Here is a portion of that letter:
I am writing in response to the release by CMS of the Medicare Part D draft Call Letter for 2014. I applaud CMS for addressing certain issues in the Call Letter that have concerned independent community pharmacies and our patients for many years. As an independent community pharmacist, I wish to voice my support for the following provisions that focus on eliminating abusive practices by Part D pharmacy benefit managers (PBM’s) that have disadvantaged patients and independent community pharmacies. I respectfully ask that CMS include these provisions in the agency’s final Call Letter for 2014:
Preferred Pharmacy Networks: We support the fact that CMS addresses some of the improprieties regarding so-called preferred Part D pharmacy networks. My pharmacy is not offered the chance to participate in the vast majority of these networks, which negatively impacts many of my patients who are forced to pay higher co-pays to continue to fill prescriptions at their pharmacy of choice. Plans should be required to offer any pharmacy willing to accept a plan’s terms and conditions the chance to participate in the preferred network per statute (42 U.S.C. § 1395w-104(b)(1)(A)).
In addition, CMS hits the nail on the head when it says that some of these networks require pharmacy “pay to play” in these networks. Where do these reverse pharmacy payments to the plans go? To the beneficiary? To Medicare? Or to the bottom line of the plans? Why should I have to pay a plan to serve my patients?
In addition, many of my patients are confused by these preferred pharmacy networks’ marketing activities. Because of the marketing, patients may believe that they can use any pharmacy in a “preferred” plan and get lower prescription co-pays. Patients may only learn that this is not the case when they come to my pharmacy, and then have to drive long distances to a remote preferred pharmacy in the network to get the lower co-pays.
Finally, there is evidence from the Part D plan finder tool that these preferred networks are charging beneficiaries higher prices (or the same price) for medications than they can obtain at non-preferred pharmacies like mine. It is not clear to me why a pharmacy would be designated as preferred if they are not lowering prescription prices for beneficiaries. In fact, if a my pharmacy is being paid less for the medications than a preferred pharmacy, and the beneficiary is paying more in co-pays at my pharmacy, how can it be that Medicare is actually saving money?