Pharmacists’ Perceptions of Drug Reimbursement Rates and Processing Times Among Managed Care Plans

The Medicare Part D program introduced in 2006 was expected to increase business and operational processing time for pharmacies because it provided prescription drug coverage to millions of elderly beneficiaries.¹ According to the US Department of Health and Human Services, 26.7 million elderly and disabled beneficiaries have prescription drug coverage, accounting for a significant proportion (approximately 27%) of the total prescriptions filled by independent pharmacies.^1,2 However, soon after the introduction of Medicare Part D, several studies indicated that the plans were associated with lower reimbursement rates and delayed prescription processing time, which severely impaired the profitability and financial stability of independent pharmacies across the nation.^3,4

A study by Carroll⁴ reported that implementation of Medicare Part D resulted in a 22% mean decrease in the profitability of independent pharmacies, primarily because of lower reimbursement rates. The National Community Pharmacists Association (NCPA), which represents independent community pharmacies, wrote in its annual report that before the implementation of the Medicare Part D program, an average of 12.4% of its pharmacies were operating at a loss, and after implementation, 22.9% operated at a loss in 2006.⁵

The results of a national study that analyzed Medicare Part D reimbursement processing time indicated that approximately 40% of the prescription drug claims were not reimbursed within 40 days.⁶ Because pharmacies are required to make payments to the wholesalers every 2 weeks, such delays were argued to be forcing independent pharmacies to take short-term loans to manage their operating expenses.⁵

In 2006, 1153 independent pharmacies were run out of business, which the NCPA attributed mainly to the financial instability caused by Medicare Part D reimbursement–related issues. However, the Centers for Medicare & Medicaid Services (CMS) denied the delay in claims reimbursement, stating that 18 of the top 20 Medicare Part D plans that cover more than 90% of beneficiaries reimbursed pharmacies twice monthly.⁷ The Pharmaceutical Care Management Association supported the CMS statement by reporting that PBMs are paying pharmacies within a 30-day period.⁸

In the past 3 years, there have been many discussions and arguments about reimbursement problems associated with Medicare Part D plans. A few studies have compared Medicare Part D with Medicaid payment sources⁹ and looked at the reimbursement disparities between chain and independent pharmacies.^10,11 But to our knowledge, no study has attempted to directly evaluate and compare the magnitude of the situation across the 3 major payers: Medicare Part D, Medicaid, and commercial managed care plans.

The objective of our study was to gain a better understanding of the pharmacist’s perspective and compare reimbursement rates from these payment sources, thus providing a clearer picture of the situation. Using a survey, pharmacists were asked to compare prescription drug reimbursement rates and claim processing time in Medicare Part D, Medicaid, and commercial managed care plans.

Methods
The study used a cross-sectional survey design, and it included full-time pharmacists involved with daily reimbursement-related activities in independent community pharmacies in the Houston metropolitan area. A database of independent pharmacies in Houston was developed using the Houston Yellow Pages Web site. The sampling area was restricted to pharmacies within a 10-mile radius of the Texas Medical Center, which allowed for exhaustive sampling and eliminated any possibility of selection bias.

A pharmacy was considered to be independent if it belonged to any of these 3 categories: independent, independent franchise, or independent chain pharmacy. Mail-order, compounding, and specialty pharmacies were excluded because their dealings with prescription drugs and respective reimbursement were likely to differ.

Area-wide telephone calls were made to all selected pharmacies in the database. We verified the independent status and provided a brief overview of the survey to the eligible pharmacists using a communiqu. Pharmacists who agreed to participate were approached at a convenient time and provided with the consent form and the questionnaire. Pharmacists had the option to complete the survey and give it to a data collection assistant or fax it at a later time. Data were collected from May to August 2009 after approval from the Committee for the Protection of Human Subjects at the institution.

A questionnaire was developed and pilot-tested for validation. On the basis of the feedback during the pilot study, changes were made in the definitions and terminologies used in the questionnaire. The reimbursement rate was defined as the actual percentage of total claimed amount received from insurance payers. Reimbursement processing time was defined as the number of days taken to receive reimbursement after a claim was adjudicated.

The survey consisted of 2 sections. The first section measured pharmacists’ perceptions of the adequacy of current reimbursement rates and processing times across 3 insurance payers using a 5-point Likert scale (1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree, 5 = strongly agree). Each pharmacist’s perception of satisfactory reimbursement rates and sufficient processing times to meet the pharmacies’ operational requirements was noted. Pharmacists were then asked whether they believed that the reimbursement rate and processing time are improving across 3 insurance payers and whether they have encountered cash flow problems because of reimbursement issues. The second section requested demographic and practice information.

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