Many pharmacy owners wonder if contracting with Medicare directly (as a Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (“DMEPOS”) provider) adds value to a pharmacy business. The answer depends on whether the sale of the pharmacy is structured as an asset or a stock purchase.

Asset purchase

To become a DMEPOS provider under Medicare Part

In 2016, CMS published its Final Rule regarding Medicaid drug reimbursements for covered outpatient drugs. Under the Rule, each state Medicaid agency was required to adopt an actual acquisition cost (AAC) methodology for outpatient prescription drug reimbursement. To satisfy this requirement, California adopted CMS’s National Average Drug Acquisition Cost (NADAC) as the basis for AAC

During recent audits, several PBMs required pharmacies to have policies and procedures addressing CMS form 10147. Most pharmacies do not have written policies regarding CMS-10147 because it is not required by state or federal regulations or PBM manuals. Nevertheless, drafting a policy addressing when and how CMS-10147 is distributed is a good idea (especially considering

   In 2018, CMS proposed a Medicare rule that would eliminate retroactive DIR fees. One of the rationales for the rule was a colossal growth of DIRs between 2010 and 2017. During this period of time, DIRs grew by 45,000%.

As a result of this aggressive “performance enforcement” by PBMs, many pharmacies are reimbursed below cost

Below is the announcement directly from the California Department of Health Care Services (DHCS):

The DHCS will not extend the moratorium on the enrollment of pharmacy providers in Los Angeles (LA) County after the moratorium expires on October 28, 2018. This bulletin provides information for pharmacy applicants in LA County applying for enrollment in the

Last year, the California Department of Health Care Services (DHCS) announced changes in its drug reimbursement methodology by using the two-tier Professional Dispensing Fee and National Average Drug Acquisition Cost (NADAC) to calculate the new drug ingredient cost reimbursement. When NADAC does not exist, Wholesaler Acquisition Cost (WAC) + 0% would be used. (Related