Fiscal Cliff Disaster Looms for Diabetes Testing Supplies

From: Diabetes Health

B. Douglas Hoey, RPh, MBA, CEO National Community Pharmacists Association

The short-term legislation enacted to avoid the “fiscal cliff” at the start of 2013 has long-term consequences for Medicare beneficiaries’ access to diabetes testing supplies (DTS). The legislation drastically cuts independent community pharmacy reimbursement for DTS and will likely decrease beneficiary access. Decreased beneficiary access to DTS could result in less patient adherence and increased long-term costs due to avoidable complications in the management of diabetes.

The National Community Pharmacists Association has repeatedly outlined the shortcomings in such an approach. Round 1 of the competitive bid program has validated NCPA’s concerns, including identifying rampant waste in mail order and the strong patient preference for a face-to-face health care experience with local health care providers such as independent community pharmacists.

The solution is simple. NCPA is asking the U.S. Congress to put a stop to these drastic cuts to reimbursement to independent community pharmacies for DST. These small businesses often are in underserved rural and inner-city locations, and preserving access to these essential medical products and the consultation on their proper use for some of the most vulnerable patients is a must.

A number of reports have identified problems with the Competitive Bidding Program and the use of mail order.  The Office of Inspector General of the U.S. Department of Health and Human Services conducted a study for officials at HHS’ Centers for Medicare and Medicaid Services in 2012. They noticed a trend of seniors switching from mail order to non-mail providers, like community pharmacies, soon after Round 1 of CMS’ competitive bidding program took effect in certain segments of the country.

According to OIG, the use of non-mail order DST increased by 33 percent, while mail order DST decreased by 71 percent. To figure out why patients switched away from mail, OIG interviewed beneficiaries. Ten percent of beneficiaries made the switch from mail due to either unsatisfactory service or because they were unsatisfied with mail. The remaining beneficiaries stated they switched because either their previous provider didn’t win the competitive bid or didn’t offer the product they used. Presumably most, if not all, of these seniors had the option to choose a mail order provider but decided against it.

The OIG report further validates concerns by NCPA member pharmacists and previous statements by CMS of witnessing mail order oversupplying and wasted health care dollars that can occur through “auto-shipping” of DTS. Five percent of beneficiaries received unsolicited DTS. Beneficiaries reported receiving an average of five unsolicited boxes of DTS.

NCPA also conducted a survey in 2012 of 400 community pharmacy owners where 92 percent of independent community pharmacies stated they would likely leave the Medicare Part B program and cease supplying DTS if forced to suffer a sharp reduction in reimbursements. Over 50 percent of community pharmacies said that the average Medicare diabetic patient comes to them at least three times per month for diabetic supplies and/or counseling. In addition, 83 percent of community pharmacists said that the impact on patients if they had to obtain diabetes supplies from mail order would be significant; and 45 percent of community pharmacies deliver diabetes testing supplies to assisted living facilities.

In addition to these drastic cuts, due to changes in definitions of “mail order” and “non-mail order,” CMS will prohibit independent community pharmacists from delivering DTS to homebound beneficiaries and assisted living facilities beginning July 1, 2013. The ban was included in CMS’ competitive bidding policy for DTS. NCPA encourages Congress to address CMS’ oversight and ensure some of the frailest Medicare beneficiaries are not faced with the harsh reality of  having no other way to receive the supplies they need to stay alive.