Contracting with Medicare Plans PDF Print E-mail

Since Medicare Part D is administered through private insurance companies, Congress intended for pharmacy reimbursement and price concessions to be negotiated. While 44% of all independent pharmacies accept all Part D contracts, the majority of independents are choosy about the contracts they accept. 

Contract Warning

If you receive unfavorable contract offers from one or more PDPs, NCPA wants you to know that you have a choice. (Some of these contracts from prospective PDPs may be "opt-outs." You could find yourself in a network you don’t want to be in if you don’t decline to participate in writing.) 

You have a choice to reject unfair agreements. The Medicare enrollment process empowers you to keep your customer base without accepting unfair contracts.

Before signing any contracts:
  1. Read the contract! 

    Although pharmacies are inundated with Part D contracts, it is important to read each contract carefully to uncover any hidden provisions. Some key provisions are detailed below.
     
  2. Does the reimbursement rate and dispensing fee cover your cost to dispense?

    A recent Grant Thornton study found that the average pharmacy cost to dispense is $10.50 in chain and independent pharmacies. This figure is just an estimate and varied widely based on location.

  3. Does it have a “most favored nations” provision?

    Most favored nations clauses hold the pharmacy accountable so that the prospective PDP is receiving the lowest price that the pharmacy is accepting. So, if the pharmacy ever accepts a lower reimbursement from any prospective PDP, the pharmacy must extend that same reimbursement rate to the "most favored" payer.

  4. Is the contract “opt out”?

    Many Medicare Part D contracts have an “opt out” clause in the contract. This means that unless you proactively decline that contract, you will be considered a part of their network and subject to the terms and conditions of the contract. Simply not signing the contract does not preclude the prospective PDP from including you in their network.

  5. When does extended day supply begin?

    Some prospective PDPs have elected to define extended day supply as 34-90 days. Others have defined extended day supply as 84-90 days. Some allow pharmacies to elect participating in extended day supply. Remember, 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 toward the prospective PDPs’ TRICARE access requirements.