If you are a compound pharmacy that services a substantial number of Tricare beneficiaries, you may have recently received an “Exhibit A – Compound DoD” Network Supplement contract (“New DoD Contract”) from Express Scripts, Inc. (ESI), which manages the pharmacy benefits for DoD/Tricare beneficiaries. The New DoD Contract substantially reduces (by approximately 70% or more) the reimbursement for numerous compound ingredients. According to the terms of the New DoD Contract, if the compound pharmacy wants to continue to service Tricare beneficiaries it must execute and return the New DoD Contract to ESI by a date certain, or else it will no longer be permitted to fill compound scripts for Tricare beneficiaries. According to ESI, the New DoD Contract is being rolled out in waves to compounders, with the first wave of contracts being sent to those compounders that were adjudicating the highest volume of compound claims for Tricare beneficiaries.
Effective on May 1, however, many of the compound pharmacies that dutifully signed and returned the New DoD Contract to ESI have nonetheless found themselves locked-out of the new Tricare network. The compounders are receiving incoherent and mixed explanations from both ESI and the DHA as to why they have been prohibited from continuing to service their Tricare patients. For example, many of these pharmacies are being told by ESI that “[d]ue to an administrative error” they were “inadvertently” offered the New DoD Contract and that ESI is now retracting the offer to allow those pharmacies to participate in the new Tricare network. In addition, other compound pharmacies are receiving letters directly from the DHA advising that the DHA is suspending payment for present and future claims that the pharmacy dispensed to Tricare beneficiaries because of prescriptions written by a physician whom the DHA has concluded may not have established a physician-patient relationship with the Tricare beneficiary. While these pharmacies have no knowledge of who this physician may be or whether the scripts were invalid, the DHA’s vague explanation, coupled with ESI’s admitted error, have effectively terminated the pharmacy’s ability to continue to service its Tricare patients.
Frier Levitt is at the forefront of this issue dealing with both ESI and the DHA in trying to remedy this unfair result. If your compound pharmacy has found itself locked-out of the new Tricare network, contact us for help.
