As Medicare open enrollment begins, the NCPA is urging CMS to facilitate appropriate PBM contracting for pharmacies in the upcoming plan year.
With Medicare open enrollment fast approaching for the 2025 plan year, the National Community Pharmacists Association (NCPA) addressed the Centers for Medicare & Medicaid Services (CMS), urging them to create guardrails for independent pharmacies to stay protected against predatory pharmacy benefit manager (PBM) contracts. With Medicare Part D plans constituting a significant portion of community pharmacies’ businesses, NCPA prompted CMS to establish fair protections for the upcoming year, preventing PBMs from locking independent pharmacies into unfair, long-lasting contracts.
“To alleviate the crisis that pharmacies are facing in Medicare Part D, NCPA asks CMS to provide regulations outlining Part D pharmacy contracting guardrails to ensure fair and common-sense contracting between Part D plans/PBMs and pharmacies. This is essential to eliminate abuses in contracting practices and processes from Part D plans and PBMs, and to ensure patient access to accurate information to select their pharmacy of choice,” wrote B. Douglas Hoey, RPh, MBA, CEO of NCPA, in a letter to CMS Administrator Chiquita Brooks-LaSure and Meena Seshamani, MD, PhD, CMS deputy administrator and director of the Center for Medicare.1
On average, 36% of a community pharmacy’s revenue consists of Medicare Part D plans.2 With such a high proportion of independent pharmacy businesses relying on Part D reimbursements, NCPA’s goal is to convince CMS to mediate the relationships between PBMs and independents. Since declining reimbursements and unfair contracting are 2 significant issues in the fight between PBMs and community pharmacies, CMS has an important role to play regarding Medicare benefits come the start of the 2025 plan year this coming January.
On average, 36% of a community pharmacy’s revenue consists of Medicare Part D plans. | image credit: Yurii Kibalnik / stock.adobe.com
Medicare open enrollment—officially known as the Medicare Annual Enrollment Period (AEP)—starts on October 15 and ends on December 7, with benefits going into effect on January 1 the following year. Before AEP begins on the 15th, insurers update their Medicare coverage plans on October 1 every year. Beneficiaries then have until December 7 to reassess their Medicare coverage prior to being locked into the next year’s coverage plan.3
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Ahead of AEP starting next month, NCPA has attempted to garner the attention of CMS in multiple areas of Part D plans. While there is not much time for all opinions to be considered, NCPA is simply proposing a better-leveled playing field between PBMs, insurers, pharmacies, and the millions of plan beneficiaries across the US.
But most importantly, in the eyes of NCPA, their recent letter to CMS is urging Medicare Part D to prioritize independent pharmacies, their contracts with PBMs, and their much-needed Part D profits.
“Among other things, NCPA is urging CMS to require Part D plans/PBMs to notify pharmacies or their contracting entities about the pharmacies’ network status for the upcoming plan year, and that the contracts themselves must be opt-in, signed, and finalized prior to October 1 each year; require plans/PBMs to make their standard contracts available upon request from interested pharmacies no later than the first week of June of each year when Part D bids are due to give pharmacies and their contracting entities enough time to adequately analyze and negotiate a PBM contract; require that contracts be offered anew every year, with payments and networks that cannot be changed without further negotiation and consent of all parties to the contracts; and require that plans/PBMs cannot ‘bundle’ or ‘tie’ participation in one network to another non-Medicare Part D network,” wrote NCPA in a recent news release.2
With a specific focus on PBM contracts and how they are distributed to participating pharmacies, NCPA’s requests are all regarding contract terms and are designed to create more transparency between independents and PBMs for the upcoming Medicare plan year. One specific highlight among these requests is the suggested regulation to have contracts be offered anew each year, giving pharmacies more leverage to negotiate their contracts with PBMs as well as opportunities to seek out other options for Medicare Part D coverage.
While CMS has yet to make an official statement regarding NCPA’s letter, information regarding Medicare Part D plans and AEP for 2025 is expected to be released in the next few weeks as important enrollment dates approach.
“If contracts are for more than 1 year, pharmacies find themselves in a relationship with plans/PBMs similar to the Eagles’ ‘Hotel California,’ which they can never leave. We believe that plans/PBMs are attempting to lock our members into multiple-year contracts to game CMS’ pharmacy access standards in Medicare Part D,” concluded Hoey.2
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