APhA Urges Congress To Enact Legislation Ensuring Prompt Payment To Pharmacists

Main Category: Pharmacy / Pharmacist
Article Date: 08 Apr 2008 - 2:00 PDT

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The American Pharmacists Association challenges a recent PricewaterhouseCoopers study on the potential impact of requiring Medicare Part D plans to pay pharmacies on a timely basis. The study, commissioned by the trade association that represents Pharmacy Benefit Managers (PBMs), claims "prompt pay" legislation could raise Medicare drug costs by $3.3 billion over 10 years. But the study fails to acknowledge that PBMs are reaping billions of dollars in profits through interest income secured by delaying payments to pharmacies. APhA urges Congress to enact legislation to require "prompt payment" to pharmacies and stop some Medicare Part D plans from profiting at the expense of pharmacies.

Since the inception of the Medicare Part D prescription drug benefit, pharmacists have played an integral role in ensuring the successes of the Medicare Part D prescription drug benefit. While some of the initial implementation challenges have been addressed - much of it through efforts by pharmacists - some pharmacies continue to struggle with lengthy delays of payment for medications dispensed to Medicare patients. A recent study found that the average wait for reimbursement by Part D prescription drug plans ran in excess of 39 days, reflecting anecdotal reports APhA continues to hear from its members. In APhA's most recent Medicare Part D Survey, half of those who were aware of the time it took for reimbursement indicated that they waited more than 30 days for reimbursement. APhA maintains that getting paid in a timely manner is a basic and fair business practice and strongly supports establishing a "prompt payment" standard to require plans to pay pharmacies' "clean" (includes all necessary information) claims every 14 days for electronic claims and every 30 days for paper claims.

The business of pharmacy relies on a timely cash flow, and many pharmacies cannot sustain long delays in payment - particularly when medication suppliers, such as wholesalers and pharmaceutical manufacturers, enforce penalties for delayed payments from pharmacies. Lags in payments have heavily affected community pharmacies. Combined with the reduced reimbursements in Medicare Part D, a number of pharmacies have had to take out loans to cover their debts, while others, particularly independent pharmacies, have been forced to close permanently.

About the American Pharmacists Association (APhA)

The American Pharmacists Association, founded in 1852 as the American Pharmaceutical Association, represents more than 63,000 practicing pharmacists, pharmaceutical scientists, student pharmacists, pharmacy technicians and others interested in advancing the profession. The APhA, dedicated to helping all pharmacists improve medication use and advance patient care, is the first-established and largest association of pharmacists in the United States.

American Pharmacists Association