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Medicare urges payers to keep cash flowing to pharmacies

Medicare officials are urging health plans and other payers not to put pharmacies in a cash squeeze when a new policy kicks in that may reduce how much they're paid upfront for dispensing drugs.

  • The Centers for Medicare and Medicaid Services wrote to pharmacy benefit managers and insurers Thursday suggesting they make special payment arrangements with pharmacies before the policy takes effect on Jan. 1.

Catch up quick: The change is aimed at lowering patients' drug costs by keeping Medicare prescription drug plans and PBMs from retroactively recouping performance-based adjustment fees from pharmacies.

  • Payers will still be able to adjust pharmacy reimbursement for quality performance at the point of sale.

  • Medicare originally planned to start the policy in 2023 but delayed it a year after pharmacies raised concerns that the change would slash their cash on hand at its outset.

  • Medicare officials have reason to be concerned: Hundreds of pharmacies have closed this year, and research shows that nearly a quarter of U.S. neighborhoods are in "pharmacy deserts."

  • Ronna Hauser, senior vice president at the National Community Pharmacists Association, said she's not aware of any PBMs or insurers offering special payment terms to pharmacies for the first half of 2024.

The other side: PBMs oppose the policy change and have "raised countless times our concerns about the likely consequences of the new rule," Greg Lopes, vice president of public affairs and communications at the Pharmaceutical Care Management Association, told Axios.

  • PBMs "recognize the vital role pharmacies of all sizes and in all geographic locations play in creating access to prescription drugs for patients," Lopes said in an email.

Thursday's letter also served as a general warning to PBMs and insurers against bad behavior of all kinds.

  • Medicare officials noted that they're investigating concerns that insurers curb access to medically necessary contraceptives and don't adequately reimburse pharmacies for vaccines.

  • Additionally, officials wrote that they are "closely monitoring" plan compliance with pharmacy network requirements as vertical integration in health care continues.

  • "We urge plans and PBMs to engage in sustainable and fair practices with all pharmacies — not just pharmacies owned by PBMs," the letter added.

Reporter: Maya Goldman, author of Axios Vitals

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