Sept. 9, 2009

Texas Pharmacy Business Council is an organization of American Pharmacies and the Academy of Independent Pharmacists-Texas.
www.TxRxCouncil.org

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Legislation list

"Unjust enrichment" & "windfall profits?!"

CMS FAQs RE: DMEPOS deadline

New HHSC commissioner

Pharmacy supports Rep. Kolkhorst

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	Texas legislation success list
REGULATION OF Rx DISCOUNT CARDS PBM TRANSPARENCY IN STATE CONTRACTS MAIL ORDER PARITY

"Unjust enrichment" & "windfall profits?!"

What have you been doing with the windfall profits you skimmed off reimbursements based on AWP guidelines? Oh, you say you haven't seen any windfall profits? Well, that's what the First Circuit Court claimed in its ruling last week regarding reduction of AWPs.

The only windfall profits can be found in the last quarter reports of the three major PBMs, not independent pharmacy.

Even as they acknowledged the action will adversely affect pharmacies, the court permits First DataBank and Medi-Span to reduce the markup factor used to calculate AWP for some 1,400 products by national drug code to 1.20 times Wholesale Acquisition Cost from 1.25. FDB and Medi-Span, two publishers of data on the widely used benchmark, also plan to institute the same rollback factor for an additional 20,000 NDCs not part of the settlement. Both actions are scheduled to take effect Sept. 26.

A number of PBMs are renegotiating contracts with pharmacies so that reimbursement is not reduced. Click here for a conversion chart and handy calculator to help determine AWP and WAC equivalents as you review new contracts.

Medicaid reimbursements also are effected by the settlement. NCPA and NACDS are stressing to the Centers for Medicare & Medicaid Services and state Medicaid directors the potentially devastating impact on Medicaid patients and pharmacies if the rollback takes effect. A lawsuit to stop individual state rollbacks is one potential legal avenue open. Talks with First DataBank and Medi-Span on not going beyond the original settlement have not been fruitful, but are continuing.

The court also ruled that several associations, including the National Association of Chain Drug Stores and the Food Marketing Institute, have a right to appeal the AWP reductions. But independent pharmacy was excluded from further legal action!

The most amazing statement from the court is its acknowledgment thatpharmacies "likely do stand to lose revenues, for a limited period, as a result of the rollback" of AWPs. However, the court suggested that "it can hardly be denied" that pharmacies received extra reimbursement in the past when AWPs were increased.

The court noted that one expert estimated that the AWP increases had cost payors $7 billion, whereas the new AWP reductions would cut payments by $1 billion. The court found that "to the extent [the AWP reduction] forces prices below the market level, it will take back some of the windfall profits obtained(even if innocently through another's fraud) and give some compensation for past overcharges."

The court rejected as "dubious" and "intuitively far fetched" the argument by NCPA's expert that the AWP reductions would cause 40 percent of independent pharmacies to go out of business.

One silver lining is that the appeals court rejected the district court's suggestion that pharmacies be held legally liable for unjust enrichment.

This makes it all the more important that pharmacists closely review PBM contracts renewals and make wise business decisions.

Stay tuned!

Richard E. Beck, RPh
Executive Director, Texas Pharmacy Business Council

CMS FAQs RE: DMEPOS deadline

If you can translate the alphabet soup above, you'll be interested in this information from CMS In response to the National Community Pharmacists Association's request for clarification about the DMEPOS deadline.

A supplier can wait until as late as Sept. 28 to get the accreditation certificate. If he/she does not get one by that date, the pharmacy needs to voluntarily terminate participation in the program.
If a supplier gets an accreditation certificate after Oct. 1, it can at that time apply for re-enrollment.
It then might take up to 60 days for the NSC to notify the pharmacy that the pharmacy can once again bill for DMEPOS. However, the pharmacy can retroactively bill back to the date that it received the accreditation certificate.

Click here for the larger Q&A prepared by NCPA that includes new information from CMS relative to the upcoming deadlines for pharmacy DMEPOS accreditation.

New HHSC executive commissioner has state agency and professional association perspectives

Thomas Suehs, 58, who has served as deputy executive commissioner for financial services since 2003, is stepping up to the executive commissioner position. In this role, he will be responsible for overseeing five agencies, 50,000 employees and an annual budget of $30 billion.

Suehs is a former executive director of the Texas Health Care Association and has served as deputy commissioner of the Texas Department of Mental Health and Mental Retardation.

"I think this appointment is very good," said TPBC Executive Director Richard Beck, RPh. "I have known Tom since the middle 80s when I was at TPA and he was the ED of Texas Health Care Association, which represents the state's nursing homes. I have always been able to work with Tom and worked with him on the Medicaid fee increase during the 2007 session. He was the HHSC numbers cruncher & budget guru."

Pharmacy supports Rep. Lois Kolkhorst

TPBC at Kolkorst receptions

Attendees included Patty Korthauer, Brenham; TPBC Executive Director Richard Beck, RPh; Ken Korthauer, RPh, APRx member and owner of Norman's Pharmacy in Brenham; Rep. Kolkhorst; TPBC consultant Gerhardt Schulle; APRx board member Alton Kanak, RPh, Katy and wife Sandra. Not pictured but in attendance were Gary Sonnenburg, RPh, owner of Medical Arts Drug in Brenham, and Kaye Stroud, APRx business development manager/south region.

___________________

American Pharmacies and Texas Pharmacy Business Council were well represented at the recent fundraiser and re-election announcement for Rep. Lois Kolkhorst (R-Brenham) at the historic Washington-on-the-Brazos State Historic Site.

Texas House of Representatives Speaker Joe Strauss (R-San Antonio) was among the 300 attendees. Approximately $170,000 was donated to her re-election campaign, including funds from APRx GPAC and TPA's Pharm PAC, as well as individual contributions from pharmacists.

Rep. Kolkhorst is a Five Star PharmacyPhriend for her work as chairman of the Public Health Committee and sponsor of pro-pharmacy legislation. She was the House sponsor of SB 704 (PBM transparency & mail order parity), which passed and was signed into law by Governor Perry.

Subpoena Update

The on-again, off--again subpoenas issued by attorneys for the Apothecure defendants are on again. The International Academy of Compounding Pharmacists negotiated with the defense attorney, reaching an agreement that IACP would file an amicus brief in lieu of all the individual pharmacists having to respond to subpoenas.

However, in rapid about face, the defense counsel is now saying he will only withdraw some of the subpoenas and not all. IACP's attorney recommends a more formal, direct route of objection to the subpoenas and requests for protective orders from the court in order to seek finality to this matter.

Based on experience, IACP has little confidence that any will be withdrawn, according to IACP CEO Rod Shafer, RPh.

"To protect our constituents, we propose a unified response and have contacted those pharmacists who received subpoenas," he said. "However if you received a subpoena and have not been contacted by IACP, we encourage you to contact IACP immediately."

International Academy of Compounding Pharmacists
4638 Riverstone Blvd.
Missouri City, Texas 77459
(281) 933-8400 Office

Texas Pharmacy Business Council
Ensuring patient access to quality pharmacy care services,
the viability of community pharmacy and the pharmacy profession.
1001 Congress Ave., Suite 250, Austin, TX 78701 512.992.1219
Richard E. Beck, RPh, Executive Director
www.TxRxCouncil.org