Medicare Prescription Drug Plans

Many third parties hire pharmacy benefit managers (PBMs) to provide prescription claims processing and other services. Examples of third parties that hire PBMs are insurance companies, employers, Medicare prescription drug plans, and state Medicaid programs. PBMs establish pharmacy networks as part of their claims management services, so many pharmacy third-party contracts are with PBMs. Examples of other ser-... 

A third-party payer issue that will continue to be important is declining reimbursement rates. Private third-party reimbursement rates are likely to continue to decrease. Medicare prescription drugs plans now are... 

Volland, Adam. Shopping for a Drug Plan. U.S. News World Report 143, no. 18 (November 19, 2007) 79-80. Medicare participants need to select their prescription drug plans carefully. As reported in this article, costs can vary widely across plan providers and even across years for the same provider. The author gives advice on making effective choices and on keeping costs for prescription drugs low. 

Part D was implemented, he has experienced lower profit margins. At the same time, his patients and the community have expressed their gratitude for his assistance during Medicare enrollment periods and for helping them better understand the issues related to the many Medicare Part D prescription drug plans. 

Medicare Advantage A Medicare-approved private health care plan, such as a health maintenance network or preferred provider organization, that serves as an alternative to a fee-for-service plan for Medicare participants and partially or totally covers prescription drug costs. 

Medicare Part D The component of Medicare that covers prescription drugs through voluntary enrollment in one of several plans and saves members money on drug purchases. 

Two clauses seen occasionally in pharmacy contracts are the most favored nation clause and the allproducts clause. The most favored nation clause requires pharmacies to extend their lowest price or reimbursement rate to that third party. It is customary for third parties to require that the pharmacy charge the third party its U C price if it is lower than the third party s reimbursement formula price. However, having to give the third party the lowest reimbursement rate of all the other third-party rates is not customary The allproducts clause requires pharmacies to participate in all the third party s plans if it wants to participate in one plan. A pharmacy may want to choose only some of a third party s plans depending on the reimbursement rate and number of customers affected. Some states prohibit all-products clauses. These clauses became especially problematic with the advent of discount cards and more recently with the implementation of Medicare Part D. Discount cards are given or sold to people who do not have insurance coverage for prescription drugs. People who have a discount card pay a price that is determined by a reimbursement formula rather than the U C pharmacy price. As noted earlier, the reimbursement price usually is less than the pharmacy s U C price, so pharmacies receive less revenue. Some of the discount cards are administered by PBMs and other third parties, and pharmacies may prefer not to accept a third party s discount card even if they accept patients with insurance from that third party. Pharmacies... 

Shepherd MD, Richards KM, Winegar AL. 2007. Prescription drug payment times by Medicare Part D plans Results of a national study. J Am Pharm Assoc 47(6) e20. 

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