PCMA: The Drugstore Lobby (Again) Looks to Avoid Fraud and Abuse Detection

Legislative Proposals Backed by Drugstores Undermine the Bipartisan National Fight against Fraud and Abuse

WASHINGTON, Feb. 27, 2013 /PRNewswire-USNewswire/ -- As the U.S. House of Representatives Energy and Commerce Subcommittee on Health examines preventing waste, fraud, and abuse in the health care system during a Congressional hearing today, the independent drugstore lobby is continuing to promote an agenda that seeks to ban tools that detect pharmacy fraud, waste, and abuse. This special interest agenda runs counter to the goals of payers, unions, and a bipartisan chorus of policymakers who want to reduce wasteful spending by demanding more accountability in the health care system.

Independent Drugstores vs. the Anti-Fraud Community. In the last Congress, independent drugstores were the driving force behind legislation (H.R. 1971/S. 1058 and H.R. 4125) which would have limited the use of audits and other tools used to uncover fraud in the pharmacy setting.

Fraud and abuse costs Americans up to $234 billion a year, according to the National Health Care Anti-Fraud Association (NHCAA). A recent report examined how recent Congressional hearings and government investigations have raised serious questions about opaque business practices and pricing strategies within the independent drugstore industry, which now generates $93 billion in annual sales from 23,000 stores nationwide and ranks among America's most profitable small business sectors.

At independent drugstores, the owner, cashier, and book keeper are often one and the same. These factors make independent drugstores more susceptible to irregularities and make oversight more challenging. The report highlighted three basic questions policymakers are asking of independent drugstores:

    --  Why are independent drugstores eight times more likely than other
        pharmacies to submit questionable bills to Medicare?
    --  Are independent drugstores exploiting the drug shortage crisis?
    --  Why are independent drugstores fighting bipartisan efforts to reduce
        drug diversion?

A white paper published by NHCAA also raised serious questions about the kind of legislative proposals promoted by the independent drugstore lobby. The policies and specific NHCAA concerns include:

    --  Policies that undermine payers' ability to audit independent pharmacies
        suspected of fraud ("Audit Reform" policies).  NHCAA supports measures
        that would "protect the integrity of health care audits by giving
        auditors more discretion and flexibility to perform their duties" and
        notes that "on-site audits have revealed indications of fraud such as
        nonexistent pharmacies, unexplained stockpiles of controlled substances,
        mismatches between inventories and prescriptions and other
        discrepancies."  NHCAA also warns that "proposed federal and state
        legislation that would require payers to provide providers advance
        warning of an audit - even in cases when fraud is suspected - would give
        suspects time to tamper with evidence and evade authorities altogether."
    --  Policies that undermine authority across Medicare to suspend payments
        when there is suspicion of fraud. The ability to stop fraud before
        paying a claim is more effective and more efficient than relying on
        paying first and then chasing after claims that are later found to be
        fraudulent. Congress should extend to Medicare Part D the recently
        enacted statutory authority Congress provided in Medicare Parts A and B
        to suspend payment to health care providers upon a credible allegation
        of fraud, waste, or abuse.
    --  Policies that reduce payers' time to verify pharmacy claims before
        payment ("Prompt Pay" policies). NHCAA states: 'if claims are not rushed
        through the payment process, auditors and investigators will have more
        opportunities to detect attempts at fraud before they come to fruition."
        So-called "prompt pay" laws in Medicare Part D that mandate rapid
        payment to independent pharmacies reduce the time available to detect
        pharmacy fraud, waste, and abuse.
    --  Policies that make payers partner with pharmacies that are banned from
        federal programs ("Any Willing Pharmacy" policies). Legislation that
        would force plans to include in their networks pharmacies that have been
        banned from federal programs "runs counter" to preventing fraud,
        according to NHCAA. This "low standard of admission could allow for the
        participation in employer networks of pharmacists who have been
        suspended from government programs.  Even if they have records of
        harmful prescription errors or a high number of consumer complaints,
        they would still be potentially eligible in the absence of a criminal
        conviction."

PCMA represents the nation's pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 215 million Americans.

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SOURCE Pharmaceutical Care Management Association