Health Industry Washington Watch : Washington DC Healthcare Industry Law Firm : Reed Smith : Health Industry Washington Watch : Regulations, Medicare/Medicaid, Governmental Organizations

In response to a request from Rep. Henry Waxman, Ranking Member of the House Committee on Energy and Commerce, the GAO has issued a report examining Pharmacy Services Administrative Organizations (PSAOs), which are used primarily by independent pharmacies to interact with drug wholesalers, third-party payers, and other entities. The report includes data from 2011 and 2012 regarding:

1. the number of PSAOs (at least 22) and the number of pharmacies that contract with PSAOs (between 20,275 and 28,343);
2. the services PSAOs offer (including contract negotiation, communication, and help-desk services, among others) and how they are paid for these services (usually a monthly fee for a bundle of services paid by a member pharmacy); and 
3. the entities that own PSAOs (the majority are owned by drug wholesalers and independent pharmacy cooperatives) and the relationships between owners and the pharmacies they represent (which vary).

• Print
• Comments
• Trackbacks
• Share Link

On December 19, 2012, the FDA is hosting a public meeting entitled “Framework for Pharmacy Compounding: State and Federal Roles” (the meeting also will be webcast). While the FDA acknowledges that “the States play a critical role in the oversight of traditional pharmacy compounding,” the FDA observes that “a category of “non-traditional” compounding has evolved in the last decade that FDA believes requires additional oversight.” According to the notice, the FDA is working with Congress to consider new authorities regarding these “non-traditional” compounding pharmacies. In addition to holding the public meeting, the FDA is soliciting comments on several specific questions related to federal and state roles in the regulation of pharmacy compounding, such as (1) whether the states currently are able to provide oversight of pharmacy compounding and consumer protection; (2) what the federal role should be in regulating higher risk pharmacy compounding such as compounding high-volumes of drugs for interstate distribution; and (3) whether or not there is a role for the states in enforcing a federal standard for "nontraditional" compounding. Comments are due by January 18, 2013.

• Print
• Comments
• Trackbacks
• Share Link

The OIG has issued a report on Medicaid pharmacy reimbursement that compares FUL amounts based on published prices to FUL amounts based on AMP and pharmacy acquisition costs. According to the OIG, FUL amounts based on published prices (from the fourth-quarter 2011 Redbook file) were more than four times greater than sampled pharmacy acquisition costs. Moreover, FUL amounts based on AMPs were 61 percent lower than FUL amounts based on published prices, at the median, but still exceeded sampled pharmacy acquisition costs by 43 percent in the aggregate. Notably, however, the study was subject to a number of limitations, including use of AMP-based FULs that have not been published by CMS (data for November 2010 was used, whereas CMS began releasing draft FULs in September 2011). While CMS has been issuing draft AMP-based FUL amounts for review and comment, the OIG recommends that CMS complete implementation of AMP-based FUL amounts, in conformance with the ACA. CMS concurred, and stated that it plans to implement FUL amounts based on AMPs “in the near future.”

• Print
• Comments
• Trackbacks
• Share Link

On May 10, 2012, the HHS Office of Inspector General (OIG) issued a report entitled “Retail Pharmacies with Questionable Part D Billing.”  The OIG identified more than 2,600 retail pharmacies in 2009 that had what the OIG characterizes as “questionable billing” for Part D drugs (e.g., extremely high dollar amounts or numbers of prescriptions per beneficiary or per prescriber, or high percentage of prescriptions for Schedule II or III drugs, brand-name drugs, or refills). While the OIG acknowledges that “some of this billing may be legitimate,” the OIG believes that these pharmacies warrant further scrutiny. The OIG also observes that the Miami, Los Angeles, and Detroit areas were the most likely to have pharmacies with questionable billing. The OIG makes a number of recommendations to CMS, including strengthening the Medicare Drug Integrity Contractor’s monitoring of pharmacies, requiring Part D plan sponsors to refer potential fraud and abuse incidents that may warrant further investigation, developing risk scores for pharmacies, strengthening CMS compliance plan audits, and following up on pharmacies identified by the OIG as having questionable billing.

• Print
• Comments
• Trackbacks
• Share Link