PHARMACY ALERT: Express Scripts Offers Pharmacies Another Opportunity to Rejoin TRICARE Network on December 1, 2022

Frier Levitt has been closely monitoring Express Scripts’ (“ESI”) administration of TRICARE, the health care program for uniformed service members and their families.

Earlier this year the Defense Health Agency (“DHA”) awarded ESI a multi-year contract to continue serving as the sole Pharmacy Benefit Manager (“PBM”) to administer and manage the pharmacy benefit offered to TRICARE beneficiaries after a bidding process that involved only two proposals submitted. In late July 2022, in its role as TRICARE’s sole PBM, ESI sent providers across the nation an “Important Notice” containing a TRICARE contract for contract year 2023 via fax. Many pharmacies expressed outrage with the contract’s reimbursement rates, which were below a reasonable provider’s acquisition cost and were otherwise unsustainable for both brand and generic drugs. As a result of these unreasonably low reimbursement rates, many pharmacies and Pharmacy Services Administrative Organizations (“PSAOs”) declined to execute the July TRICARE contract, which ESI required providers to accept within 15 days of receipt or be deemed to have declined participation for the entirety of contract year 2023. For example, Kroger Health—the grocery store chain’s pharmacy business—terminated its relationship with ESI, in part, because of the unsustainable TRICARE reimbursements offered for contract year 2023. ESI forced providers to leave the TRICARE network and restricted patients’ access to their healthcare.

Recently, on or around November 11, 2022, ESI sent pharmacies another “Important Notice” indicating that ESI will be extending another opportunity for providers to participate in its TRICARE network due to Kroger’s decision to terminate its relationship with ESI. Per ESI, this offer will be sent via fax to pharmacies on December 1, 2022 at the address listed on the ESI provider portal. ESI has further indicated that its solicitation period for this new offer to join the TRICARE network will remain open for only 15 days following the date of receipt of the Important Notice. For most pharmacies, this requires a response to the offer to be submitted by December 16, 2022.

How Frier Levitt Can Help

Pharmacies seeking to participate in the TRICARE program in 2023 must be vigilant in their evaluation of ESI’s new TRICARE network contract and its implications on your business. Frier Levitt is well versed in the evaluation and negotiation of reimbursement rates. Regardless of the size of your pharmacy, Frier Levitt is also ready and able to assist in challenging unsustainable reimbursements rates. If you have any questions regarding the TRICARE network reimbursement rates extended by ESI or other aspects of the TRICARE program, contact us to speak to an attorney.

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