MEDICARE RX BYTES

Medicare Rx Bytes: Facts About Part D Networks

Many pharmacies have likely received communications recently from some prospective Medicare Part D prescription drug plans (PDPs) regarding pharmacy networks. Some of the prospective PDPs claim to reserve the right to close their Part D pharmacy networks after July 1, 2005.

Here are the facts about Medicare Part D pharmacy networks:

• Prospective Part D PDP sponsors must have their pharmacy networks in place by August 1, 2005. These networks must meet TRICARE access standards:
  

  • Urban – 90% of beneficiaries in the plan’s service area, on average, live within 2 miles of a retail pharmacy participating in the plan's network
  • Suburban – 90% of beneficiaries live within 5 miles of a retail pharmacy
  • Rural – 70% of beneficiaries live within 15 miles of a retail pharmacy

• If enough pharmacies do not sign up to participate in the plan’s network and the plan cannot meet access standards in a state, the prospective Part D PDP cannot participate in that state

• If the plan offers two separate reimbursement rates for 30-day and 90-day supply, a pharmacy that accepts one reimbursement rate is considered a network pharmacy.  So, a pharmacy that accepts the terms of a 30-day supply but declines the extended day supply rate is still considered a network pharmacy and counts towards access requirements.

• The “any willing provider” provisions of the Medicare Modernization Act only extend during the initial networking. After August 1, 2005, prospective Part D plans are not obligated to network with retail pharmacies that did not sign up during the initial network “negotiations.”

Consequently, it would be reasonable to assume that the recent communications from some PDPs were likely high pressure tactics to intimidate community pharmacies into accepting terms of one or more contracts to meet legislatively mandated TRICARE access standards.