Final Rule Effective in 2022 for Medicare Part D and What It Means for Pharmacies

Effective on January 1, 2022, the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS) will implement the Final Rule for Medicare and Medicaid Programs. The Final Rule establishes pharmacy performance measures reporting requirements for Medicare Part D plan sponsors.  This rule is the first time that plan sponsors will be required to disclose to CMS the exact measures used to evaluate pharmacies in their pharmacy performance network programs.  By way of background, many plan sponsors began implementing performance network programs through pharmacy benefit managers (PBMs) in the year 2016.  Under these performance network programs, PBMs have clawed back post point-of-sale fees, or direct and indirect remuneration (DIR) fees, from pharmacies throughout the country. 

By reviewing CMS’s responses to comments to the proposed rule, we can discern CMS’s position on the impact of the Final Rule.  While many comments to CMS expressed that pharmacy performance measurements were either flawed, opaque, or both, the Final Rule does not mandate any requirements of performance metrics at this time, and rather only requires that these metrics be reported to CMS. The Final Rule reveals that CMS ultimately believes a uniform rating system leveraging the reporting of the plan sponsors could provide beneficiaries more information about pharmacies in their networks.  For example, in response to one comment, CMS stated that “it is not premature to discuss potential Star Ratings as there would be a natural outgrowth to the development of standardized pharmacy measures.” 

In short, through the new reporting requirements, CMS will be able to report pharmacy performance measures publicly to increase transparency and inform the industry in its new efforts to develop a standard set of pharmacy performance measures, though they have not yet been implemented.  CMS hopes it will be able to “understand how the [performance] measures are applied, whether uniformly or specific to pharmacy type.”  CMS also hopes to “confirm or dispel the idea that many of the measures may not provide appropriate metrics across all types of pharmacies.”  For independent pharmacies that participate in networks with performance programs, the reporting requirements in the Final Rule are just one step in the right direction as an increase of transparency of pharmacy performance metrics should lead to these metrics’ compliance with the requirement that the terms and conditions for participation in Medicare Part D networks be both reasonable and relevant.  As the last Justice Brandeis once said, “sunlight is said to be the best disinfectants.” While CMS is not creating standardized quality metrics, it is making efforts to promote transparency with a view toward utilizing the information it receives from the plan sponsors’ disclosures. 

How Frier Levitt Can Help

In the meantime, PBMs continue to recoup post point-of-sale fees from pharmacies based on performance measures.  Frier Levitt works on behalf of its clients to challenge the unlawful recoupment of monies due to performance network programs.  If you would like to schedule a complimentary call to discuss performance network programs and its impact on you, contact us today to speak to an attorney.

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