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IRS adjusts rules on health insurance debit cards

December 27, 2010 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Accounting Today, a SourceMedia publication – 12.27.2010

The Internal Revenue Service issued new guidance allowing the continued use of flexible spending arrangement and health reimbursement arrangement debit cards for the purchase of prescribed over-the-counter medicines and drugs.

The new guidance modifies previous guidance to permit taxpayers to continue using FSA and HRA debit cards to purchase over-the-counter medications for which the taxpayer has a prescription.

Effective after Jan. 15, 2011, in accordance with the new guidance, this use of debit cards must comply with procedures reflecting those that pharmacies currently follow when selling prescribed medicines or drugs.

The procedures include requirements that a prescription for the medication be presented to the pharmacy or the mail-order or web-based vendor that dispenses the medication and that proper records be retained.

In accordance with the Affordable Care Act, the cost of over-the-counter medicines or drugs can be reimbursed from a health FSA or HRA if a prescription has been obtained. The requirement to obtain a prescription does not apply to insulin.

The prescription requirement applies to purchases made on or after Jan. 1, 2011, and not to purchases made in 2010 even if reimbursed after Dec. 31, 2010. Because the requirement applies only to over-the-counter medications, it does not apply to other health care expenses such as medical devices, eye glasses or contact lenses.

The new guidance, IRS Notice 2011-5, as well as answers to frequently asked questions on IRS.gov, also contain further details on health FSA and HRA debit card purchases, including purchases from health care providers other than pharmacies and mail order and web-based vendors.

For guidance on health FSA and HRA debit card purchases at “90 percent pharmacies,” see IRS Notice 2010-59. More information on health care reform provisions can be found on the Affordable Care Act page on IRS.gov.

Local pharmacies leery of Caterpillar Rx policy

July 09, 2010 By: Nadia Category: Free Prescriptions, HealthCare, Medtipster, Prescription News

www.Medtipster.com Source: Winston-Salem Journal, 7.9.2010

A group of independent local pharmacies supports Caterpillar Inc. opening a plant in Winston-Salem, but not if it costs them customers.

That’s why they are appealing to city and county officials to make equal prescription-drug access to potential Caterpillar employees a part of any incentive package with the company.

The pharmacies are concerned about a preferred prescription-drug agreement that Caterpillar has with Walgreens and Wal-Mart.

The agreement, which runs through 2011, provides for lower or no co-pays for Caterpillar employees who fill their prescriptions with Walgreens and Wal-Mart. Employees pay more if they fill their prescriptions through an online or mail-order pharmacy, other chains or independent pharmacies.

“With Caterpillar’s policy, if one of our customers gets hired by Caterpillar, we could lose them,” said Dave Marley, the president and chief executive of Marley Drug in Winston-Salem.

“This, combined with the fact that our own tax dollars were used to entice Caterpillar, and it becomes wholly unacceptable.”

Caterpillar has named Winston-Salem as one of three finalists, along with Montgomery, Ala., and Spartanburg, S.C., for a proposed $426 million manufacturing plant with 510 company and contract employees.

Last week, Winston-Salem and Forsyth County offered Caterpillar a combined $23.4 million in incentives. Caterpillar plans to make a decision in August.

Marley said that the pharmacies are “willing to accept the exact same reimbursement terms given by Walgreens and Wal-Mart.”

“We feel there is no way this would be negotiated after the fact, so if there is going to be a change in Caterpillar’s policy, it has to be raised now and discussed now,” Marley said.

Also making the request are Andrews Pharmacy, East Winston Pharmacy, Gateway Pharmacy, Jonestown Pharmacy, Lewisville Drug, Medicap Pharmacy on Liberty Street and Medicap Pharmacy on Reynolda Road.

Mayor Allen Joines said the city “will bring this concern to the company’s attention if we are lucky enough to be negotiating a contract.”

At cathealthbenefits.cat.com, Caterpillar said the “direct contracts with Wal-Mart and Walgreens use a transparent cost-plus pricing methodology that is intended to eliminate unnecessary and hidden costs in the prescription-drug supply chain.”

Caterpillar did amend its policy to allow independent pharmacies to participate at the Walgreens and Wal-Mart tier in rural areas that don’t have easy access to those stores.

A small percentage of employers have adopted similar policies regarding prescription drugs, said Steve Graybill, a senior consultant for Mercer, a human-resources consulting company.

David Howard, a spokesman for R.J. Reynolds Tobacco Co., said that in 2009, the manufacturer opened up its health-care plan to give employees access to more than 59,000 pharmacies, including national chains and many local pharmacies. Before that, Reynolds provided most medical care for its employees through company-sponsored clinics such as Winston-Salem Health Care.

The bulk of local Reynolds employees have still chosen to use Winston-Salem Health Care and its pharmacy for years, Howard said. “Employees have the option to go outside of network for health care and prescriptions, but they will have higher out-of-pocket costs,” Howard said.

Media General Inc., the parent company of the Winston-Salem Journal, has a contract with Medco, a mail-order pharmacy that provides discounts for employees, but employees can fill prescriptions elsewhere, as well.

Discount Cards Offer Little To No Benefit

June 23, 2010 By: Nadia Category: HealthCare, Medtipster, Prescription News, Prescription Savings

Search the internet and you will find hundreds of companies offering pharmacy discounts cards. We looked at several and found alarming results.

All of the pharmacy discount cards we investigated boasted agressive pharmacy discounts.  Let’s define “agressive”:

Half of the discount cards offered an average 12% brand drug discount. The other half cost more than the pharmacy’s cash price.

Nearly 90% of the discount cards had a generic drug price that was higher than the pharmacy’s cash price.

The 10% that had value offered pennys in savings at best.

One of the better cards was offered by the National Association of Counties.  The example below highlights the NACO’s discounted price for frequently utilized Simvastatin 40mg (Generic Zocor).

Comparing NACO’s mail order price to the prices found on www.Medtipster.com were amusing for us, but will most likely be upsetting to anyone whom has one of these NACO discount cards.

Bottom-line: Make sure you pay nothing for these cards and perhaps consider even using them at all.

See example below:

Price Chopper pharmacies are giving away diabetes drugs

May 21, 2010 By: Nadia Category: Free Prescriptions, HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com source: www.timesunion.com – Cathleen F. Crowley, 5.19.2010

First, pharmacies slashed the cost of generic drugs. Then grocery stores such as Stop & Shop and Wegmans shot back with free antibiotics. Now Price Chopper is offering free drugs to people living with diabetes.
Competition for customers is fierce in the world of retail pharmacy, which is up against mail-order powerhouses.Price Chopper is the first grocery store pharmacy to provide free diabetic medications in the Northeast, according to Golub Corp., Price Chopper’s owner. Florida-based Publix Super Markets has a similar program.

“It’s a pretty business-savvy move,” said Craig Burridge, executive director of Pharmacists Society of the State of New York. “When you are dealing with a disease state that has other products that are not drug-related, you can make some money off of it.”

Price Chopper launched the program this week. Mona Golub, vice president of public relations and consumer services for the Schenectady-based supermarket chain, said it will build customer loyalty and address a major health problem in the community.

“From a business standpoint, Price Chopper’s interest is in establishing and solidifying a stronger relationship with our customers and becoming more of a comprehensive resource to consumers,” Golub said. “From a health perspective, the new Diabetes AdvantEdge program offers a comprehensive menu of resources and tools to those who are managing diabetes.”

Price Chopper, which has 70 pharmacies in six states, has already tailored programs for people with celiac disease by stocking more gluten-free products and providing gluten-free cooking classes. Golub said the store will continue to target niche groups.

For its diabetes program, Price Chopper will provide metformin, glipizide and glyburide free of charge to customers who have a doctor’s prescription for the drugs. The oral pills are generic drugs for controlling Type 1 and 2 diabetes, and are among the most commonly prescribed medications to diabetes patients. They are also relatively inexpensive.

Burridge said customers who use the program are likely to move all of their prescriptions to the grocery store’s pharmacy and buy accessories, such as blood testing supplies for controlling the disease, there also.

Consumers should review the cost of filling all their scripts before making a decision, said Burridge, who says consumers use one pharmacy for all their prescriptions.

“You don’t buy a car because you get free floor mats,” he said.

Price Chopper also will offer free one-on-one consultations with pharmacists and nutrition education for diabetic patients. Unlike a standalone pharmacy, the supermarket pharmacy has the advantage of offering a full range of products that diabetic patients need: sugar substitutes and low-calorie foods in addition to the blood testing supplies.

Golub said, “We will continue to look to connect meaningfully with groups of consumers that have unique needs that we can serve.”

Find a Price Chopper Pharmacy near you on www.medtipster.com.

Pharmacy Benefit Manager Fees Must Be Reported on Schedule C

February 22, 2010 By: Nadia Category: Medtipster, Prescription News

Source: U.S. Department of Labor, 2/2010

The Department of Labor published FAQs to supplement FAQs published in July 2008, and to provide further guidance in response to additional questions from plans and service providers on the requirements for reporting service provider fees and other compensation on the Schedule C of the 2009 Form 5500 Annual Return/Report of Employee Benefit Plan. Inquiries regarding these supplemental FAQs may be directed to EBSA’s Office of Regulations and Interpretations at 202.693.8523.

The new FAQs — numbers 26 and 27 — note that PBMs perform many services for which they are compensated, including services as a third-party administrator, claims processor, and developer of the plan’s formulary and pharmacy network. The FAQs make clear that fees for these services would be reportable as direct compensation on Schedule C.

Q26: Pharmacy Benefit Managers (PBMs) provide services to plans and are compensated for these services in various ways. How should this compensation be reported?

PBMs often act as third party administrators for ERISA plan prescription drug programs and perform many activities to manage their clients’ prescription drug insurance coverage. They are generally engaged to be responsible for processing and paying prescription drug claims. They can also be engaged to develop and maintain the plan’s formulary and assemble networks of retail pharmacies that a plan sponsor’s members can use to fill prescriptions. PBMs receive fees for these services that are reportable compensation for Schedule C purposes. For example, dispensing fees charged by the PBM for each prescription filled by its mail-order pharmacy, specialty pharmacy, or a pharmacy that is a member of the PBM’s retail network and paid with plan assets would be reportable as direct compensation. Likewise, administrative fees paid with plan assets, whether or not reflected as part of the dispensing fee, would be reportable direct compensation on the Schedule C. Payments by the plan or payments by the plan sponsor that are reimbursed by the plan for ancillary administrative services such as recordkeeping, data management and information reporting, formulary management, participant health desk service, benefit education, utilization review, claims adjudication, participant communications, reporting services, website services, prior authorization, clinical programs, pharmacy audits, and other services would also be reportable direct compensation.

Q27: PBMs may receive rebates or discounts from the pharmaceutical manufacturers based on the amount of drugs a PBM purchases or other factors. Do such rebates and discounts need to be reported as indirect compensation on Schedule C?

Because formulary listings will affect a drug’s sales, pharmaceutical manufacturers compete to ensure that their products are included on PBM formularies. For example, PBMs often negotiate discounts and rebates with drug manufacturers based on the drugs bought and sold by PBMs or dispensed under ERISA plans administered by a PBM. These discounts and rebates go under various names, for example, “formulary payments” to obtain formulary status and “market-share payments” to encourage PBMs to dispense particular drugs. The Department is currently considering the extent to which PBM discount and rebate revenue attributable to a PBM’s business with ERISA plans may properly be classified as compensation related to services provided to the plans. Thus, in the absence of further guidance from the Department, discount and rebate revenue received by PBMs from pharmaceutical companies generally do not need to be treated as reportable indirect compensation for Schedule C purposes, even if the discount or rebate may be based in part of the quantity of drugs dispensed under ERISA plans administered by the PBM. If, however, the plan and the PBM agree that such rebates or discounts (or earnings on rebates and discounts held by the PBM) would be used to compensate the PBM for managing the plan’s prescription drug coverage, dispensing prescriptions or other administrative and ancillary services, that revenue would be reportable indirect compensation notwithstanding that the funds were derived from rebates or discounts.

More information to follow via our blog at www.medtipster.com

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