Reprieve: Retail Rx dodges NCB bullet

Thursday, May 31, 2007

WASHINGTON - Most diabetes providers dodged a bullet in the first round of competitive bidding when CMS announced that only mail order supplies are subject to the bidding process.
"I think it's the right choice for patient access," said John Keegan, owner of Terrace Heights Pharmacy in Hazelton, Pa.
Diabetes stakeholders have long said that the distribution model for diabetes products--often sold through retail pharmacies--differs from traditional DME businesses, and that NCB would restrict access for beneficiaries and lead to higher health care costs down the road.
"We're pleased that CMS understands the need for community pharmacy to provide access to medical supplies," said Bill Popomaronis, vice president of long term and home health care pharmacy for the National Community Pharmacists Association (NCPA). "Not only are you providing the diabetic testing strip, you are providing education, foot care and medication. With NCB, you deny beneficiaries access to comprehensive care that is provided in pharmacies."
But Tim Cady, president of Carlsbad, Calif.-based Advanced Diabetes Supply, who plans to bid "responsibly" in the first round, said mail order offers patients good service.
"We provide service, and we're available to talk to them about their meters," said Cady. "Some of these seniors don't have the ability to go into pharmacies."
CMS estimates that 60% of beneficiaries already receive their diabetes supplies through mail order--a number that industry leaders speculate CMS would like to increase, by encouraging mail order.
"Perhaps this is a way for CMS to dip its toe into those waters," said Karen Kaczmarek, chair of AAHomecare's Medical Supplies Council.
For providers like Mark Gielniak, vice president of Diabetes Plus in Warren, Mich., which is not in the first 10 MSAs, the decision to include only mail order raises questions.
"We do a bit of both," said Gielniak, who estimates that 35% of his business is mail order. "Where do we fit in?"
Providers who offer both mail order and retail could continue to bill the non-mail order supplies at the higher fee schedule rate, said Seth Lundy, a partner with Washington-based law firm Fulbright & Jaworski.
In order to differentiate between mail order and walk-in business, CMS may create modifiers to claims.
Industry leaders also criticized the lack of a clear definition on what exactly constitutes mail order.
"I think CMS means through the U.S. Postal Service or other common carriers, but they haven't exactly made that clear," said Lundy. "There is some commentary to indicate that one of the things that is definitely not mail order is local delivery using an employee and a company-owned truck. Where between your own employee and your own truck and the U.S. Postal Service mail order begins and ends is not entirely clear."