Senators call for oversight on preferred pharmacy networks

Industry consultant predicted networks to make 'big splash' in 2013

WASHINGTON — Medicare Part D plans that create tiered networks of pharmacies for beneficiaries need more oversight amid reports that small and medium-sized pharmacies are being excluded from them, several senators wrote in a letter last week to the Centers for Medicare and Medicaid Services.

The letter, addressed to acting CMS administrator Marilyn Tavenner, said that exclusion from the networks meant that the pharmacies were unable to offer comparable costs for seniors to fill prescriptions, raised concerns that the networks could raise Medicare Part D costs and adversely affect beneficiaries' access to pharmacies, especially in rural areas. CMS is in the process of reviewing Medicare plans for 2014 approval.

"Please review the agency's plans to ensure preferred networks are implemented in a manner that is consistent with the Medicare Modernization Act," the senators wrote in the letter. "We respectfully request that you inform us of your findings, and of steps that have been put in place to ensure Medicare plans using preferred networks are providing high quality of care for Medicare beneficiaries while maintaining access to prescription drugs and not increasing overall Medicare costs."

Under preferred networks, most pharmacies can participate as "network" pharmacies in order to satisfy Medicare's geographic access requirements, but only some may participate as a "preferred" pharmacy that can offer the plan's lowest advertised co-pays, and most plans do not allow independents to participate as preferred pharmacies.

“Momentum continues to build within CMS itself and on Capitol Hill behind the need for increased oversight and scrutiny of preferred networks in Medicare Part D, and we appreciate the work of legislators and agency officials alike who are keeping their eye on the ball of meeting beneficiary needs,” National Association of Chain Drug Stores president and CEO Steve Anderson and National Community Pharmacists Association CEO B. Douglas Hoey said in a joint statement.

In March, 31 members of the House of Representatives — including many representing rural areas in states like West Virginia and Montana — wrote to CMS expressing concern from Medicare beneficiaries and small business owners about Medicare Part D plans featuring preferred networks. Pembroke Consulting president Adam Fein wrote in October that he expected such networks to "make a big splash" in 2013.

Meanwhile, the Pharmaceutical Care Management Association, a trade group representing the pharmacy benefit manager industry, has defended the networks, saying they lower costs, citing data from CMS.

The signatories to the recent letter were Sens. Sherrod Brown, D-Ohio; John Thune, R-S.D.; Tom Coburn, R-Okla.; Thad Cochran, R-Miss.; Richard Durbin, D-Ill.; Michael Enzi, R-Wyo.; Chuck Grassley, R-Iowa; Heidi Heitkamp, D-N.D.; John Hoeven, R-N.D.; James Inhofe, R-Okla.; Tim Johnson, D-S.D.; Amy Klobuchar, D-Minn.; Jeff Merkley, D-Ore.; Jerry Moran, R-Kan.; Jon Tester, D-Mont.; and Roger Wicker, R-Miss.

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