Medicare anti-fraud efforts re-ignite indy feud
WASHINGTON —A new push to crack down on the massive and costly fraud and abuse that plagues Medicare and Medicaid is drawing praise from the pharmacy benefit management industry. But it also drew another volley against PBM practices by the independent pharmacy lobby.
Both Congress and the White House are targeting fraud, waste and improper billing in federal healthcare outlays. The Centers for Medicare and Medicaid Services has proposed new regulations to help prevent what the agency said is $55 billion in annual improper payments to providers and health plans. In a related development, the House Energy and Commerce Subcommittee on Health is looking at ways to attack the problem, and held a hearing Sept. 22 titled, “Cutting Fraud, Waste and Abuse in Medicare and Medicaid.”
The National Community Pharmacists Association quickly weighed in on the issue. Speaking on behalf of independent pharmacy owners, the NCPA submitted a statement at the hearing that accused the pharmacy benefit management industry of responsibility, directly or indirectly, for much of the abuse and unnecessary outlays by Medicare and Medicaid.
Reform of the Medicare and Medicaid payment system, NCPA told the congressional panel, should include “targeting PBMs by examining their past record of alleged systematic chicanery. From 2004 to 2008, the three major PBMs…faced six major federal or multidistrict cases over allegations of fraud; misrepresentation to plans, patients and providers; improper therapeutic solutions; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards,” the pharmacy group asserted. What’s more, the NCPA charged in its testimony, “PBMs are virtually unregulated at the state or federal level, even though they manage numerous prescription drug plans funded by billions of taxpayer dollars.”
The group urged Congress to pass legislation “to rein in the waste being generated by the business practices of pharmacy benefit managers under Medicare and Medicaid” and to increase the transparency of PBM audit practices. In its strongly worded statement, the NCPA also asked the panel to “address through oversight or legislation CMS’ failure, in certain circumstances, to assert its authority to fight fraud, waste and abuse.”
Not surprisingly, the PBM industry has a very different take on payment-reform efforts. Responding to new proposed regulations from CMS to combat fraud and abuse, Pharmaceutical Care Management Association president and CEO Mark Merritt said the government’s focus should be on preventing abuse rather than on pursuing wrongdoers after the fact for fraudulent billing practices.
“Pharmacy benefit managers agree that prevention, not ‘pay and chase,’ is the key to fighting fraud,” Merritt noted. “That’s why PBMs use a variety of state-of-the-art techniques to detect and prevent fraud, waste and abuse before it happens. Unfortunately, some public policies undermine the fight against fraud by requiring payers to include pharmacies in their networks that have been banned from federal programs [known as ‘any-willing pharmacy’ policies],” Merritt added. The potential for abuse, he went on, also is exacerbated by other policies that “grant pharmacies that commit fraud a long waiting period before removing them from networks, [and] grant pharmacies an advanced-notice ‘heads up’ before performing audits.”
Merritt also took the opportunity to reiterate the PBM industry’s intense opposition to the “promptpay” requirements long sought by chain and independent pharmacies, which historically have been plagued with slow reimbursements for drugs dispensed to public and private third-party payers. Policies that require payers to “accelerate payments,” PCMA’s leader charged, leave “less time to detect and prevent fraudulent Medicare claims before payments are made”—so-called “prompt pay.”
CVS’ future rests on front-end, private-label evolution
NEW YORK CVS Caremark has no doubt been a trailblazer in the healthcare arena, positioning itself along the front lines to leverage its various points of care to improve outcomes and lower healthcare costs. But with all that CVS Caremark has done and will continue to do in the healthcare space — and it is no doubt a lot — it still has more than 7,000 retail locations, and the front of the store continues to be a critical part of its business and a major growth driver for the company.
(THE NEWS: At his last analyst day, Ryan sets out course for future CVS Caremark. For the full story, click here)
The front end is an $18 billion business for CVS and to be sure the company continues to look for ways to drive even more productivity out of its stores. It comes as no surprise that one area it will target for additional growth is private label. Private-label penetration currently stands at 17%, and over the next two to three years, company executives expect that number to grow to more than 20%.
"Private-label brands continue to grow and evolve. In this economy, consumers have shown that they are much more willing to try private-label products," Mike Bloom, EVP merchandising and supply chain, told analysts during Friday’s 2010 analyst meeting in New York. He noted that by the end of 2010, CVS/pharmacy will have nearly 5,100 private-label items storewide, which is an increase of 900 items versus last year. Each year, the company adds about 900 new private-label items and leverages ExtraCare to encourage trials among cardholders.
What is news, particularly to suppliers, is that a key component of CVS’ private-label program is an entirely new line that the company plans to introduce in February 2011, called Just The Basics — named to clearly communicate its functional, value-priced, smart, simplicity positioning. What is significant is that the new line is not a national-brand-equivalent type execution, but rather, more of a basic entry-point, low-price alternative.
"Now, while many retailers are stuck in the brand-follower mode of the 1980s, we have evolved to a leadership role," Bloom said.
The company also is increasingly turning to "treasure hunt" items and is using its circulars to drive front-end sales. For example, it recently promoted a WiFi-capable Netbook for $99.99 on the front page of its circular. While a Netbook isn’t your traditional drug store product offering, it has proven to be a hit among shoppers. CVS sold $3 million worth of Netbooks in three weeks, and it will be a $15 million item at CVS, the company said.
Then there’s beauty. As the article states, CVS is piloting a mini format of its Healthy Skincare Centers (in 120 stores) and will launch in January an ExtraCare Beauty Club.
Clearly the front end continues to be a significant growth driver for CVS and that will continue to be the case for a long time to come.
Natural rodent repellant Fresh Cab available at retail
BISMARCK, N.D. An all-natural rodent repellant continues to gain a stronger retail presence with more than 3 million pouches sold, which come in convenient four-pack boxes.
Earth-Kind’s Fresh Cab, created by gardener and environmentalist Warberg Block, uses ground corn cobs soaked in essential botanical oils and packaged in small biodegradable pouches.
Fresh Cab is sold at 15,000 home, garden, hardware and farm and ranch stores throughout the nation.