CMS ditches daily dispensing fees for Medicare Part D

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule prohibiting prorated or “daily dispensing fees” for Medicare Part D drugs. The previous fee structure, which paid long-term care (LTC) and community pharmacies less for Medicare Part D drugs that were to be used for less than 30 days, has been hotly contested by the major LTC pharmacy associations for several years.

"The intent of this rule is to prohibit dispensing fees that penalize the offering and adoption of more efficient LTC dispensing techniques by prorating dispensing fees based on days' supply or quantity dispensed," notes the CMS rule. "This rule also adds a requirement to ensure that any difference in payment methodology among long-term care pharmacies incentivizes more efficient dispensing techniques."

The Senior Care Pharmacy Coalition (SCPC) applauds the decision: "By prohibiting the use of DDFs and incentivizing more efficient drug dispensing techniques, CMS ensures that LTC pharmacies will receive the professional fee that appropriately recognizes all of the unique activities related to filling a LTC prescription and the value of those services to quality care—regardless  of the quantity of medication dispensed," said Alan Rosenbloom, president and CEO of SCPC, in a release about the decision.

The National Community Pharmacists Association (NCPA) also approves of the CMS action, noting that it would reduce current pay disparities for pharmacies that dealt primarily with LTC and rehabilitation clients, and which therefore often dispense Medicare Part D drugs used for short periods of time, or "short-cycle" scripts.

"Medicare has done the right thing for patients, for LTC pharmacists and to reduce medication waste," said NCPA CEO B. Douglas Hoey, RPh, MBA, in a release about the decision. "Community pharmacists play a critical role to promote the proper use of medication, whether for seven days or 90, and they should be compensated adequately for it."

The former fee structure also unfairly penalized LTC pharmacies who adopted more efficient dispensing practices, the NCPA added. "While short-cycle dispensing is considered as a means to reduce wastage of expensive medications, this survey is a reminder that consecutive 14-day prescriptions may result in higher dispensing costs that must be factored into pharmacy reimbursement models," Hoey had noted in a 2013 release referencing the 2013 NCPA Long-Term Care Division study showing that LTC pharmacies often encounter 25 percent more cost per patient in serving their clients compared to retail pharmacies.

The CMS action officially ends a two-year battle to have the former daily dispensing fee system removed under Medicare Part D. The new rule will take effect Jan. 1, 2016.   

Pamela Tabar

Pamela Tabar was editor-in-chief of I Advance Senior Care from 2013-2018. She has worked as a writer and editor for healthcare business media since 1998, including as News Editor of Healthcare Informatics. She has a master’s degree in journalism from Kent State University and a master’s degree in English from the University of York, England.