Efforts to combat Medicare fraud draw mixed signals from indies, PBMs

WASHINGTON The independent pharmacy and pharmacy benefit management industries both praised new efforts by Congress and the Obama administration to end the fraudulent and abusive billing practices that plague Medicare and Medicaid and cost U.S. taxpayers tens of billions of dollars. But their recommendations for combating the problem are as different as their approaches to the pharmaceutical market.

The Centers for Medicare & Medicaid Services proposed new regulations to help prevent what the agency said is $55 billion in annual improper payments to providers and health plans. In a related development, the House Energy and Commerce Subcommittee on Health is looking at ways to attack the problem, and held a hearing Thursday titled, “Cutting Fraud, Waste and Abuse in Medicare and Medicaid.”

The National Community Pharmacists Association weighed in with a statement to the House panel that accused the pharmacy benefit management industry of responsibility for much of the abuse, which the group attributed to a “past record of alleged systematic chicanery.”

In its statement, the independent pharmacy lobby reminded lawmakers of numerous allegations of fraud by major PBMs, as well as “misrepresentation to plans, patients and providers; improper therapeutic solutions; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards.” The group urged Congress to pass legislation “to rein in the waste being generated by the business practices of pharmacy benefit managers under Medicare and Medicaid,” and to increase the transparency of PBM audit practices.

Not surprisingly, the response from the Pharmaceutical Care Management Association, the main PBM industry advocacy group, was markedly different. Responding to new proposed regulations from CMS to combat fraud and abuse, PCMA president and CEO Mark Merritt said the government’s focus should be on preventing abuse rather than on pursuing wrongdoers after the fact for fraudulent billing practices. “Pharmacy benefit managers agree that prevention, not ‘pay and chase,’ is the key to fighting fraud,” Merritt noted. “Unfortunately, some public policies undermine the fight against fraud by requiring payers to include pharmacies in their networks that have been banned from federal programs.”

Merritt also reiterated PCMA’s call for legislation to eliminate legislative “prompt-pay” requirements that force pharmacy benefit plans to quickly pay prescription claims, raising again a major source of friction between the PBM and retail pharmacy industries. Policies that require payers to “accelerate payments,” PCMA’s leader charged, leave “less time to detect and prevent fraudulent Medicare claims before payments are made.”

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