Inmar Intelligence | April 7, 2012

With ever-changing regulations and legislation, pharmacies face constant challenges to stay ahead of the issues and to run a profitable business. Two of the major issues facing pharmacies today are increased audits and the changes in the rate basis for reimbursements.

Audits have increased from Pharmacy Benefit Managers (PBM), insurance companies, and the government or Centers for Medicare and Medicaid Services (CMS), and have led to increased penalties and slipping margins. Penalties and loss of reimbursements are financial burdens to pharmacies as well negative publicity from inappropriate handling.

In 2011, the National Community Pharmacist Association (NCPA) conducted a survey of its members to identify problems with pharmacy audits and generic drug reimbursement limits (maximum allowable costs or MAC) affecting independent community pharmacists. The findings pointed to excessive audits decreasing time pharmacists can devote patients and that audits often focus on trivial issues (physician misspellings of patient names or writing incorrect dates) instead of focusing on true fraud.

In 2012, Inmar is developing an audit solution to provide real information about audits. Pharmacies can access when errors occurred and pinpoint the cause to keep from repeating issues. Tracing audits to their root cause will enable pharmacies to save time and avoid negative financial impact.

Another issue facing pharmacies is change in rate basis for reimbursements. In September 2011, First Databank decided to stop using its Average Wholesale Price (AWP) for prescription drugs. As a result, PBMs are using different metrics to calculate rates for drugs - leaving pharmacies without historical data on which to base negotiations with PBMs and putting them at a disadvantage.

Again, in the 2011 NCPA survey, a major issue identified was that pharmacies do not have access to basic reimbursement (MAC) methodology prior to signing contracts with health plans. This leaves retail pharmacies at a huge disadvantage with no recourse for limits that are set too low.

To help retailers, Inmar is completing a new feature within our contract management web tool to take the current pricing from PBMs and apply it to historical payment information to give them the view of new PBM pricing compared with AWP that had been used. Pharmacies are able to partake in much stronger negotiations with PBMs with this historical view.

Inmar is staying involved in industry leadership organizations and watching developing trends to make sure we understand the needs of our clients.


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    Holly Pavlika
    SVP, Corporate Marketing
    (336) 770-3596