NCPA Offers Recommendations for Cutting Fraud, Waste and Abuse Problems in Medicare and Medicaid

Alexandria, VA - Sept. 22, 2010

Today, the National Community Pharmacists Association (NCPA) submitted a statement for the U.S. House Energy and Commerce Subcommittee on Health's "Hearing on Cutting Fraud, Waste and Abuse in Medicare and Medicaid", which offered three legislative recommendations:

  • Pass legislation designed to rein in the waste being generated by the business practices of pharmacy benefit managers (PBMs) under Medicare and Medicaid;
  • Pass legislation increasing the transparency of PBM audit practices and prohibiting the most abusive aspects of those practices; and
  • Address through oversight or legislation CMS' failure, in certain circumstances, to assert its authority to fight fraud, waste and abuse.

NCPA has successfully led previous legislative efforts demonstrating the integrity of independent pharmacists in their participation in Medicare and Medicaid. For example, when the Medicare Improvements for Patients and Providers Act became law in 2008, it included a provision requiring PBMs to pay clean claims in a much more timely fashion. Before MIPPA, the PBMs were holding on to reimbursements to earn interest off of the float. This year, the Patient Protection and Affordable Care Act included a provision to exempt independent community pharmacies from an onerous Medicare Part B durable medical equipment accreditation requirement because NCPA, among others, demonstrated that sufficient safeguards were already in place and the available evidence points to non-pharmacists as being the overwhelming perpetrators of this kind of fraud.

In its statement, NCPA supports targeting PBMs by examining their past record of alleged systematic chicanery. For instance, "from 2004—2008, the three major PBMs (Medco, CVS Caremark, and Express Scripts) faced six major federal or multi-district cases over allegations of fraud; misrepresentation to plans, patients and providers; improper therapeutic solutions; unjust enrichment through secret kickback schemes, and failure to meet ethical and safety standards." As NCPA also notes, "PBMs are virtually unregulated at the state or federal level−even though they manage numerous prescription drug plans funded by billions of taxpayer dollars.

Not only do PBM business practices create waste, fraud and abuse, but their auditing practices create a bureaucratic, resource-draining nightmare for community pharmacists who then have less time to focus on providing patient care. NCPA points out that "in most cases money recouped from a pharmacy as a result of an audit is not returned to the plan sponsor—but is simply pocketed by the PBM. Many times, PBM audits of pharmacies—operating under the guise of combating fraud, waste and abuse—are simply an additional revenue stream for PBMs." Many of NCPA's recommendations in this area are covered in H.R. 5234, the PBM Audit Reform and Transparency Act of 2010, which was introduced by Reps. Anthony Weiner (D-NY) and Jerry Moran (R-KS).

The National Community Pharmacists Association (NCPA®) represents America's community pharmacists, including the owners of more than 22,700 independent community pharmacies, pharmacy franchises, and chains. Together they represent an $88 billion health-care marketplace, employ over 65,000 pharmacists, and dispense over 40% of all retail prescriptions. To learn more go to or read NCPA's blog, The Dose, at

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