PHARMACY

NCPA, NACDS and FMI urge CMS to change final DMEPOS rules requiring surety bonds for pharmacies

BY Michael Johnsen

ALEXANDRIA, Va. The National Community Pharmacists Association, National Association of Chain Drug Stores and Food Marketing Institute on Wednesday released a letter addressed to Acting Administrator of the Centers for Medicare and Medicaid Services Charlene Frizzera, urging CMS to make a change to the final Durable Medical Equipment, Prosthetics, Orthotics and Supplies rules requiring surety bonds for state-licensed pharmacy suppliers.

At issue is a current requirement that each pharmacy providing DMEPOS services, including diabetes equipment, carry a $50,000 surety bond per outlet. Annual administrative costs associated with those surety bonds have been estimated to be as high as $2,000. For a national chain like CVS or Walgreens, this would necessitate $300 million in surety bonds.

“Requiring suppliers with multiple locations to obtain multiple bonds in the amount of $50,000 will cause many of them to reach their risk ratings for surety bonds,” the associations stated. “The DMEPOS surety bond would essentially exhaust the company’s bonding ability,” the associations added, making it more difficult to secure bonds for other aspects of the pharmacy business, such as performance bonds to streamline and secure new store construction or bonds needed to make other infrastructure or operational expansions. “Moreover, it is unclear whether enough capacity exists in the surety bond market to implement a $50,000 per location bond as required by the final rule,” the associations concluded.

“This rule was issued to address fraud and abuse in the Medicare DMEPOS program and to create a pool of funds for recovery of erroneous payments,” the pharmacy associates wrote. “While we agree with the need to combat fraud in the Medicare program, this rule raises serious policy and administrative concerns that must be addressed by the new CMS leadership before the rule becomes effective. … For example, if pharmacies are unable to afford the cost of the surety bonds and participate in the Medicare program, diabetic patients are likely to face difficulties in obtaining their blood glucose testing supplies and pharmacists’ counseling to control their disease. … Imposing a surety bond will lead to fewer DMEPOS diabetic supplies providers, especially in rural areas. This decreased access to supplies and services, especially when combined with recent DMEPOS programs, such as competitive bidding and accreditation, will lead to additional costs to the system.”

If a pharmacy opted out of participating in Medicare because of the surety bond requirement, it also may preclude that pharmacy from serving Medicaid patients. Several state Medicaid programs require DMEPOS suppliers to be enrolled in Medicare in order to provide DMEPOS to Medicaid patients.

“Congress intended surety bonds to be targeted toward suppliers that pose serious risk to the Medicare program, and not legitimate healthcare providers,” the associations argued. “Unlike unscrupulous suppliers for whom this rule was intended, pharmacies are state licensed healthcare providers who are subject to disciplinary actions from their state boards of pharmacy for engaging in fraudulent behavior, in addition to prosecutions by state and federal authorities. In this regard, pharmacies are no different than physicians, non-physician practitioners and others who received an exemption in the final rule.”

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PHARMACY

Seeking to enlist patients as advocates, NCPA launches online grassroots effort

BY Jim Frederick

ALEXANDRIA, Va. The nation’s top independent pharmacy organization has unveiled a plan to recruit patients themselves in a broad campaign to influence policy in Washington on behalf of community pharmacists.

The new initiative, dubbed Fight4Rx.org, is aimed to “recruiting and transforming patients into grassroots activists for community pharmacies,” noted the National Community Pharmacists Association, “by educating them on the vital role pharmacists play and the serious challenges they face in the delivery of health care.”

Fight4Rx patients will sign up through their local community pharmacies, some 1,000 of which have already begun recruiting patients, according to NCPA. The group has set an initial goal of enlisting 50,000 Fight4Rx patients by the end of 2009. That goal is “well within reach,” NCPA predicts. 

“America’s patients and their families greatly value their community pharmacists and the personalized services they provide,” said Bruce Roberts, EVP and CEO of the independent pharmacy organization. “Fight4Rx patients will have a new forum during the health care reform debate in Washington, DC. They will be able to research issues and speak directly to their legislators about key concerns affecting their access to prescription medication and services by their local community pharmacies.” 

Fight4Rx includes issue briefs on pharmacy patient issues, Medicare and healthcare news updates, and a video blog on the home page, www.Fight4Rx.org, with regular updates from pharmacy industry experts. Patients will receive a monthly e-mail newsletter that will update them on key pharmacy issues and breaking news. When necessary, Fight4Rx will encourage patients to contact their elected officials via a 1-800 number or e-mail. 

NCPA president Holly Henry said patients could become a highly effective ally in community pharmacy’s struggle for greater recognition and a level health care playing field. “I believe the Fight4Rx online community will lead us to fair and common-sense health care policies in the United States by empowering patients to let their voices be heard in establishing the pharmacy home of their choice,” said Henry, a Seattle-based pharmacy owner-operator.

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PHARMACY

Merck & Co. reports gain for 4Q

BY Drug Store News Team

WHITEHOUSE STATION, N.J. Merck & Co. said Tuesday announced it had a successful fourth-quarter profit, despite several setbacks over the past year.

The maker of vaccines, cholesterol drugs and asthma treatment Singulair reported a profit of $1.64 billion, or 78 cents per share. A year ago, Merck posted a loss of $1.63 billion, or 75 cents per share, after the company faced approximately 50,000 mainly product liability suits involving its withdrawn painkiller Vioxx.

Lower fourth-quarter costs for materials and production, and for restructuring, down to $103.1 million from $156.2 million in 2007, helped boost the bottom line.

Additional restructuring is anticipated for this year, as the pharmaceutical giant is expected to lay off about 5,300 more workers. Since December 2005, Merck has slimmed down by 10 percent, from 61,500 employees then to 55,200 at the end of 2008.

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