Frier Levitt has been assisting Long-Term Care (“LTC”) Pharmacies on a wide array of legal issues. Our team of professionals include clinician attorneys and nationally recognized thought leaders who have acquired an in-depth understanding of the pharmacy industry and the interplay between LTC Pharmacies and other constituencies including, but not limited to, the government agencies at various levels, pharmaceutical manufacturers, wholesalers/distributors, and Pharmacy Benefit Managers (“PBMs”).
LTC Pharmacies provide healthcare services to vulnerable patient population including seniors in skilled nursing facilities (“SNFs”) and assisted living facilities (“ALFS”). The demographic changes towards aging population have led LTC Pharmacies to become an important part of the healthcare system. However, rising use of generics, generic price inflation, and negotiating and contract administration tactics by PBMs and payors that are vertically integrated with PBMs are exacerbating adverse financial trends, creating significant challenges for LTC Pharmacies. Likewise, heightened requirements implemented by various regulatory bodies have added to challenges faced by LTC Pharmacies. Therefore, it is critical that LTC Pharmacies consult with industry experts. Frier Levitt and its team have well-developed understanding of the pharmacy industry and the governmental agencies that regulate it.
We have extensive experience in resolving reimbursement and recoupment disputes against PBMs including CVS Caremark, Express Scripts, Inc., OptumRx, and Prime Therapeutics as well as public and private payors. The majority of drugs dispensed by LTC pharmacies are generics, and PBMs reimburse for these drugs using Maximum Allowable Cost (“MAC”) pricing under Medicare Part D. PBMs establish MAC pricing lists, with variable processes for setting and updating them. PBMs do not always promptly update MAC prices after a change, which can lead to pharmacies paying the manufacturer more for a drug than the reimbursement provided.
With constant downward trend on reimbursements, it is imperative that LTC Pharmacies challenge unreasonably low reimbursements and recoupment by PBMs and payors. Frier Levitt and its team of experienced attorneys that have successfully challenged reimbursement and recoupment disputes, and saved millions of dollars for pharmacy providers.
Although PBMs and payors seldomly audit LTC Pharmacies compared to independent retail pharmacies, we foresee that frequency of audits will soon increase given the rapidly expanding LTC Pharmacy industry. LTC Pharmacies should be prepared for PBM and payor audits as any substantive audit findings may cause not only financial disruption in the day-to-day business but also have lasting impact upon the pharmacy’s contract with Accountable Care Organizations, hospices, PACE programs, and long-term care facilities. We have successfully defended PBM and payor audits including Medicare Part D prescription drug plan, Medicare Advantage, Medicaid managed care, and commercial plans.
LTC Pharmacies must be cognizant and be compliant with myriad of regulatory requirements affecting their day-to-day operations. In fact, CMS has established detailed regulatory and pharmacy practice requirements that elaborate on each of these services and the degree to which pharmacy services interact with other requirements imposed on SNFs. Our team of clinician-attorneys and industry experts guides LTC Pharmacies with respect to HIPAA, Deficit Reduction Act, the Anti-Kickback law, the False Claims Act, and comparable state laws that present risk for civil or criminal liability. As part of the regulatory and compliance services, we conduct internal investigations/audits as well as vigorously defend our clients in the event of any investigations conducted by Federal and State agencies. Moreover, we have advised clients regarding self-reporting/disclosure to regulatory authorities and have limited client exposure. Not only that, we often assist clients with respect to State Board of Pharmacy regulatory and licensure issues, including responses to Board of Pharmacy enforcement actions.
Frier Levitt routinely assists LTC Pharmacies in matters relating to acquisitions, dispositions, restructuring and reorganizations, financing, development, and construction. It is well documented that the pharmacy industry has advanced beyond traditional “mom-and-pop” stores and has attracted investments from private equity firms and angel investors. In this vein, we also identify sources of funding for our clients and prepare them to maximize long term benefit from the transaction.
Contact us today to speak with one of our attorneys.