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President gives pharmacies a delay as Medicare DME requirements loom

BY Jim Frederick

ALEXANDRIA, Va. The White House and Congress have given community pharmacies a little breathing room in their fight to overturn new and burdensome requirements on the sale of durable medical equipment and diabetic supplies under Medicare Part B. Now, pharmacy leaders are turning their attention to a permanent end to the DME challenge.

On Tuesday, President Obama signed into law a bill to delay until Jan. 1, 2010, a requirement that retail pharmacies obtain accreditation from the U.S. Centers for Medicare and Medicaid Services to continue selling DME and other health supplies to patients covered by Medicare Part B. Passage and enactment of the bill, H.R. 3663, drew strong praise today from both the chain and independent pharmacy lobby.

“We applaud President Obama for signing into law legislation that will extend the accreditation requirement for pharmacies to provide durable medical equipment in the Medicare Part B program until January 1, 2010,” noted Steven Anderson, president and CEO of the National Association of Chain Drug Stores. “The legislation will help ensure that Medicare beneficiaries can continue to obtain diabetic supplies, other DME products, and counseling from their trusted pharmacies and pharmacists.”

The new law, added the chain pharmacy leader, “will help avert serious disruptions in Medicare beneficiaries’ accessing critical medical supplies from their neighborhood pharmacy.”

Anderson sent a letter Thursday to Rep. Zach Space, D-Ohio, the author and lead sponsor of the bill, thanking him and pledging NACDS’ support for a permanent pharmacy exemption from the DME requirements.

Also weighing in Thursday was Bruce Roberts, EVP and CEO of the National Community Pharmacists Association. “Congress now has a three-month window to add pharmacists to all the other health care providers exempt from the time-consuming, costly, and redundant Medicare Part B DME accreditation requirement,” Roberts pointed out. “We remain hopeful for that outcome because both the House and Senate have included pharmacy exemption provisions in the healthcare reform proposals working their way through Congress.

“When this permanent solution is added to this temporary solution of a delay, seniors will be the ones who truly benefit,” added Roberts. “They will be able to continue getting these critical medical supplies, like diabetes testing strips, from their local pharmacy where many of their health care needs are being met. That allows seniors to can continue working with clinically trained pharmacists to get the best health outcomes possible.”

However, added the independent pharmacy advocate, “Without additional action, thousands of independent community pharmacies will be forced out of the program.”

Of particular concern to both NACDS and NCPA is an additional hurdle contained in new federal guidelines for the sale of DME and diabetic supplies. In addition to accreditation, new CMS rules also call for pharmacies to post additional insurance with Medicare – in the form of a $50,000 surety bond for each outlet – to continue supplying those products to Medicare Part B beneficiaries. Rep. Space also addressed that issue by introducing another piece of legislation, the Preserve Patient Access to Reputable DMEPOS Providers Act, which “would provide a conditional exemption for pharmacies from the surety bond requirement,” noted Anderson in his letter. However, he reminded the lawmaker, “While the House version of the healthcare reform bill includes a provision that waives the surety bond requirement for pharmacies enrolled as a supplier in Medicare Part B for the last five years that have never had an adverse action, the Senate Finance Committee bill only includes an exemption for pharmacies from the accreditation requirement.”

Anderson said chain pharmacy operators had several concerns about the new insurance requirement. Among them: that “the required bonded amount is on average several times greater than a pharmacy’s annual total DME sales,” that “the amount of bonding required would require pharmacies to exceed their bond capacity,” and that “Medicare Part B billing is a very burdensome process for pharmacies” even without the new insurance mandate. In addition, Anderson told Space, “DME is an extremely low-profit business for pharmacies and is a service they provide to their patients to help ensure that their diabetic patients are monitoring blood sugar levels properly.”

Last week, NACDS pointed out that 54 members of Congress have already co-signed a letter to acting CMS administrator Charlene Frizzera, requesting an immediate delay of the DME accreditation and $50,000 surety bond requirements for community pharmacies.

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Costco reports drop in Q4, fiscal-year earnings

BY Alaric DeArment

ISSAQUAH, Wash. A combination of the recession and foreign exchange rates have hit mass merchandiser Costco hard over the past year.

The Issaquah, Wash.-based mass merchandiser reported net sales of $21.89 billion during the 16-week period ended Aug. 30, a 3% decrease from $22.63 billion in net sales that the company had in fourth quarter 2008. Net sales for fiscal year 2009 were $69.89 billion, a 2% decrease from $70.98 billion in fiscal year 2008. Nevertheless, the five-week period ending Oct. 4 saw net sales of $6.85 billion, an increase over the $6.67 billion during the same five-week period last year.

Net income during the fourth quarter was $374 million, compared with $398 million in fourth quarter 2008. Net income for the entire fiscal year was $1.09 billion, compared with $1.28 billion in fiscal year 2008.

“Fiscal 2009 results, including those of the fourth quarter, were negatively impacted by these previously reported factors: ongoing softness in U.S. sales, primarily the result of a weak economic environment; higher employee benefit costs, mainly consisting of higher healthcare eligibility and usage; and lower U.S. dollar amounts of international profits as a result of weaker foreign currencies,” Costco CFO Richard Galanti said in a statement.

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‘Fright Aid’ coupons help shoppers save

BY Allison Cerra

CAMP HILL, Pa. To help customers get their spook on for less this year, Rite Aid is offering in-store “Fright Aid” coupons worth more than $30 off select merchandise including Halloween and fall seasonal goodies.

Smart shoppers can also use their Halloween receipts dated Oct. 17 or earlier to earn additional savings of $5, $10 and $20 gift certificates through Rite Aid’s Rake in the Savings program. Details are available at www.riteaid.com.

“We know many Americans are a bit spooked this year by all the gloomy economic news,” said Bryan Shirtliff, SVP category management at Rite Aid. “But we also know that Halloween is a fun time for many to bury their worries and dress up as someone – or something – else.”

In the past, Saturday holidays such as this year’s have meant increased interest in attending or hosting Halloween parties, Shirtliff adds. The National Retail Federation predicts the average Halloween shopper will spend $56.31 with total holiday spending reaching $4.75 billion.

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