Pharmacy Services Agreements Dimitry Gotlinsky Western University Managed Care Clerkship ProPharma Pharmaceutical Consultants, Inc. 5/08/06

Pharmacy Networks Each pharmacy has a set of rules and responsilities to follow according to contract Each pharmacy has a set of rules and responsilities to follow according to contract Breach of contract can result in lawsuits and additional fees Breach of contract can result in lawsuits and additional fees

Pharmacy Responsibilities 1)Covered Prescription Drugs 2)Eligibility 3)Charges and Billing 4)Quality Management 5)Obligations of Participating Pharmacy 6)Drug Review Program 7)Maintenance of Records 8)Electronic Data

Covered Rx Drugs & Eligibility A participating pharmacy agrees to provide covered Rx drugs to members entitled to Rx drug coverage A participating pharmacy agrees to provide covered Rx drugs to members entitled to Rx drug coverage If generic is available, the pharmacy shall dispense the lowest cost drug in stock If generic is available, the pharmacy shall dispense the lowest cost drug in stock Prior to rendering services, a pharmacy shall verify that each member is eligible Prior to rendering services, a pharmacy shall verify that each member is eligible

Charges & Billing Submit all claims for each covered Rx drug within 30 days, but no later than 90 days Submit all claims for each covered Rx drug within 30 days, but no later than 90 days Must utilize the real time processing Must utilize the real time processing Collect applicable copayments at the time of service Collect applicable copayments at the time of service Charge members less then the copayment if the usual charges are less than copay charges Charge members less then the copayment if the usual charges are less than copay charges

Quality Managment Provide clean facilities and equipment Provide clean facilities and equipment Maintain current state and federal licensure Maintain current state and federal licensure Customer-oriented Customer-oriented Properly qualified and credentialed staff Properly qualified and credentialed staff Maintain orderly and efficient systems for filling and dispensing prescriptions Maintain orderly and efficient systems for filling and dispensing prescriptions Provide adequate Rx counseling Provide adequate Rx counseling

Obligation of Pharmacy Have a licensed pharmacist on duty and available during business hours Have a licensed pharmacist on duty and available during business hours Provide proper training to its employees Provide proper training to its employees Maintain accurate and updated member profiles Maintain accurate and updated member profiles Provide orientation time for in-service training Provide orientation time for in-service training Stock and dispense bio-equivalent generic drugs if authorized by the prescribing physician Stock and dispense bio-equivalent generic drugs if authorized by the prescribing physician

Drug Review Maintain, review, & evaluate drug profiles Maintain, review, & evaluate drug profiles Therapeutic Interchange Therapeutic Interchange Medication Adherence Medication Adherence Therapy Management Therapy Management

Maintenance of Records Treat all medical records as confidential document Treat all medical records as confidential document Must abide by federal and state laws regarding disclosure of medical and Rx information Must abide by federal and state laws regarding disclosure of medical and Rx information Maintain, preserve and make available for inspection any Rx records, patient profiles etc. Maintain, preserve and make available for inspection any Rx records, patient profiles etc.

Electronic Data Transfer Participating Pharmacy must comply with electronic data interface for: Participating Pharmacy must comply with electronic data interface for: a) claims submission a) claims submission b) claims payment b) claims payment c) member eligibility reporting c) member eligibility reporting d) prior authorizations d) prior authorizations

PBMs Responsibilities PBMs Responsibilities Issue Member Identification Cards Issue Member Identification Cards Member List Verification of eligibility Administrative Procedures (record keeping, reporting, PA procedures etc.) Orientation and Training Assistance Reimbursement for each claim within a certain time frame

Term&Termination Term of Agreement Term of Agreement Termination Upon Insolvency Termination Upon Insolvency Termination by Default Termination by Default Normal Termination Normal Termination Immediate Termintion Immediate Termintion

Issues with PBMs Price Spreads Price Spreads Failure to Pass on Savings Failure to Pass on Savings Drug Switching Drug Switching Mail-Order Abuses Mail-Order Abuses Absence of Transparency Absence of Transparency

NCPA Issues Limiting formularies that restrict a patients treatment options Limiting formularies that restrict a patients treatment options Lack of info of members cards Lack of info of members cards Denial of the right to dispense a 90 day supply Denial of the right to dispense a 90 day supply Switching patients based on PBMs financial interests Switching patients based on PBMs financial interests Independent pharmacies are at disadvantage when competing with larger chains Independent pharmacies are at disadvantage when competing with larger chains Clean claims filed electronically be paid within 15 days Clean claims filed electronically be paid within 15 days