Mastering short-cycle dispensing rules is crucial but often challenging. They can be confusing and prone to pitfalls like improper coding that leads to under-reimbursements. To understand why these rules exist and how they impact long-term care (LTC) pharmacies, let's explore their origins.
On April 15, 2012, a final rule by the Centers for Medicare & Medicaid Services (CMS) appeared in the Federal Register implementing a provision of the Affordable Care Act requiring sponsors of Medicare Part D and Part C programs to implement dispensing techniques in long-term care settings to reduce prescription drug waste. This marked the last step in a months-long effort working with CMS to arrive at an outcome that achieved the objective of the law and spared the LTC pharmacy industry from an expensive and unwieldy solution.
Before we get into the details, let’s review how the regulatory process works, at least in issues involving CMS. Once Congress gives the agency the authority to write regulations, CMS generally reaches out to stakeholders, both public and private, to get their perspectives and provide informal suggestions. Then, the agency normally issues a proposed rule, published in the Federal Register, and invites anyone to provide comments. The comment period remains open for 60 days. The agency then goes to work to craft a final rule.
At the time, I was the VP of Public Affairs at Omnicare. We collaborated with other members of our trade association, the Long-Term Care Pharmacy Alliance (LTCPA), and several other LTC pharmacies, as well as the American Society of Consultant Pharmacists (ASCP). We then arranged a meeting with CMS staff to get details on their thinking.
CMS’ initial position was to apply a short-cycle requirement to LTC residents where pharmacies would be required to dispense nearly all drugs in 7-day increments, rather than the customary 31-day supplies. They had no exceptions for liquid medications, topical preparations, inhaled medications, parenteral products, or parenteral nutrition products. Industry representatives explained including these preparations in a short-cycle requirement would be impractical, and the CMS professionals agreed.
CMS staff pressed us for details concerning the amount and value of drugs that went unused by residents of LTC facilities. We weren’t aware of any pharmacies that tracked this data, beyond those doses that could be returned for credit and re-stocked.
We had made substantial progress but decided that getting some data might improve our chances, so the LTCPA Board agreed to fund a study to try to determine the number of branded drugs that were not consumed and the potential savings resulting from dispensing in 7-day cycles.
Managed Solutions LLC performed the study, which concluded that 2.9% of oral solid doses of branded drugs returned unused represented 6.1% of all prescriptions dispensed and represented 2.9% of the value of all drugs dispensed (see paper).
We sent the document to CMS and had more conversations with CMS staff. On November 22, 2010, CMS released a proposed rule in the Federal Register*. CMS had proposed limiting the short-cycle requirement to oral solid doses of branded drugs, but held firm on the 7-day cycle limitation.
Final comments were due by January 21, 2012, so we began organizing industry and individual company comments. ASCP also got working on their comments. The American Association of Homes and Services for the Aging (Now Leading Age) also submitted comments, which echoed pharmacy concerns.
After the comment window closed, we spent time speaking with staff and members of the House and Senate about our concerns and asked them to weigh in with CMS on the importance of not moving before they could determine whether the potential disruption would minimize any potential savings. Members of both the House and Senate sent letters to CMS to that effect.
CMS published the final rule** on April 15, 2012. We were relieved that CMS had agreed to increase the cycle from 7 to 14 days and kept the provision limited to oral solid doses of branded drugs.
We were fortunate to be working with CMS, an agency which puts the Medicare program and its beneficiaries first. They didn’t have an axe to grind with the industry, but were interested in carrying out the mandate in the law.
The industry came together and quickly agreed on the objective of our engagement with CMS in the rulemaking process. When it became clear that we needed data to improve our position, the board of the industry trade association approved the work in short order. Work to educate members of Congress continued parallel to our response to questions from CMS.
The outcome was generally positive for LTC pharmacy and CMS felt as though they had fulfilled the intent of the law. A job well done by many participants.
*Note: the discussion of short cycle begins on page 16, and the final regulatory language is found on page 99.
**Note: the discussion of short cycle begins on page 29, and the final regulatory language is found on page 142.
