What is Net Promoter Score and Why Should Your Pharmacy Care?
Pharmacies and physicians that dispense should be aware of Net Promoter Scores (“NPS”). A NPS is a survey metric used by PBMs purportedly to evaluate customer or patient satisfaction. The score is calculated from responses to the question, such as: “How likely is it that you would recommend [pharmacy x] to a friend or colleague?” Patients are asked to answer the question on a scale from 0 to 10. Responses are then grouped into three categories. Those who responded with a score of 0-6 are labeled “Detractors”; those who respond with a score of 7 or 8 are labeled “Passives”; and those who respond with a score of 9 or 10 are labeled “Promoters.” The Net Promoter Score is calculated by subtracting the percentage of patients in the survey who are Detractors from the percentage of patients who are Promoters. “Passives” are not directly utilized to calculate the NPS, but do impact the score by lowering the possible percentage of either “Detractors” or “Promoters.” For example, if 100 patients respond to the survey with 20 Detractors, 50 Passives and 30 Promoters, the NPS would be (30% – 20%) = 10%. The intention of this post is to make Providers aware of how PBMs misuse NPS.
PBM Misuse of NPS
Pharmacies in particular should care about their NPS because PBMs are starting to evaluate individual pharmacy’s and utilize their NPS in DIR Fee calculations. Those pharmacies with a higher NPS may see lower DIR fees than those pharmacies with a lower NPS. Overall, addressing the issue of how PBMs utilize NPS has the potential to improve a pharmacy’s net margin by more than 4%.
Frier Levitt strongly believes that utilization of NPS in DIR Fee calculations is unreasonable, often in violation of the law and certainly subject to manipulation and abuse by PBMs. PBMs often conduct NPS surveys on their own, as opposed to retaining an independent third party, with little or no transparency. The Federal Any Willing Provider Law requires Part D plan sponsors and their PBMs must agree to have “a standard contract with reasonable and relevant terms and conditions of participation whereby any willing pharmacy may access the standard contract and participate as a network pharmacy.” 42 C.F.R. §423.505(b)(18). There are strong legal arguments that NPS are neither “reasonable” nor “relevant” to pharmacy terms and conditions for network participation and may not be used to calculate total reimbursement rates.
How Frier Levitt Can Help
If you would like to learn more about your PBM contracts that utilize NPS to calculate DIR fees and total reimbursement rates, contact Frier Levitt to speak with an attorney.