Pharmacy Services Agreements

1. Pharmacy Services Agreements Dimitry Gotlinsky Western University Managed Care Clerkship ProPharma Pharmaceutical Consultants, Inc. 5/08/06

2. Pharmacy Networks • Each pharmacy has a set of rules and responsilities to follow according to contract • Breach of contract can result in lawsuits and additional fees

3. Pharmacy Responsibilities 1)Covered Prescription Drugs 2)Eligibility 3)Charges and Billing 4)Quality Management 5)Obligations of Participating Pharmacy 6)Drug Review Program 7)Maintenance of Records 8)Electronic Data

4. Covered Rx Drugs & Eligibility • A participating pharmacy agrees to provide covered Rx drugs to members entitled to Rx drug coverage • If generic is available, the pharmacy shall dispense the lowest cost drug in stock • Prior to rendering services, a pharmacy shall verify that each member is eligible

5. Charges & Billing • Submit all claims for each covered Rx drug within 30 days, but no later than 90 days • Must utilize the real time processing • Collect applicable copayments at the time of service • Charge members less then the copayment if the usual charges are less than copay charges

6. Quality Managment • Provide clean facilities and equipment • Maintain current state and federal licensure • Customer-oriented • Properly qualified and credentialed staff • Maintain orderly and efficient systems for filling and dispensing prescriptions • Provide adequate Rx counseling

7. Obligation of Pharmacy • Have a licensed pharmacist on duty and available during business hours • Provide proper training to its employees • Maintain accurate and updated member profiles • Provide orientation time for in-service training • Stock and dispense bio-equivalent generic drugs if authorized by the prescribing physician

8. Drug Review • Maintain, review, & evaluate drug profiles • Therapeutic Interchange • Medication Adherence • Therapy Management

9. Maintenance of Records • Treat all medical records as confidential document • Must abide by federal and state laws regarding disclosure of medical and Rx information • Maintain, preserve and make available for inspection any Rx records, patient profiles etc.

10. Electronic Data Transfer • Participating Pharmacy must comply with electronic data interface for: a) claims submission b) claims payment c) member eligibility reporting d) prior authorizations

11. PBM’s Responsibilities ■ Issue Member Identification Cards ■Member List ■Verification of eligibility ■Administrative Procedures (record keeping, reporting, PA procedures etc.) ■Orientation and Training Assistance ■Reimbursement for each claim within a certain time frame

12. Term&Termination • Term of Agreement • Termination Upon Insolvency • Termination by Default • Normal Termination • Immediate Termintion

13. Issues with PBMs • Price Spreads • Failure to Pass on Savings • Drug Switching • Mail-Order Abuses • Absence of Transparency

14. NCPA Issues • Limiting formularies that restrict a patient’s treatment options • Lack of info of member’s cards • Denial of the right to dispense a 90 day supply • Switching patients based on PBM’s financial interests • Independent pharmacies are at disadvantage when competing with larger chains • Clean claims filed electronically be paid within 15 days