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Tricare Summit on Compounding Pharmacy – Changes In Store
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On Friday, March 20, more than 50 representatives from the compounding and pharmaceutical industry met with officials from Tricare, the federally funded medical program that supports members of the military and their families, to discuss the growing costs of the compounding component of the prescription plan. Since the beginning of 2015, average compounded prescription billed to Tricare was more than $3,300 with more than $240 million in reimbursements paid in February 2015. That compares to $45 million a year ago. At the current rate, Tricare expects to spend more than 2 billion dollars for compounds in 2015 even though the number of prescriptions billed has not substantially increased.

In order to balance the need for cost-containment and the ability of beneficiaries to access compounds, Tricare is implementing a series of controls including prior-authorization, limitations on reimbursement for certain preparations, and an assessment of whether or not to cover certain APIs (active pharmaceutical ingredients).

On or about April 1, 2015, Express Scripts will issue a contract addendum to existing Tricare network providers.  That addendum will include a pricing schedule for commonly used compounded ingredients. Network pharmacies will be required to sign and adhere to the pricing scheduled when submitting claims. This strategy is necessary to address the escalating costs of the program.

 

Beginning on May 1, 2015, Tricare plans the following changes:

•    Implementation of the pricing schedule through Express Scripts.

 

•    Institution of an electronic screening process for compounded preparation billings that will identify those that require prior authorization. That prior authorization process will center on three specific areas: is the medication lawfully marketed in the United States, is it considered safe and effective, and is it appropriate for the patient based upon their clinical need and the cost-effectiveness of the therapy. This is similar to the process currently used in prescriptions meet TRICARE’s coverage standards.

 

•    Establishment of a process for an appeal of a denied claim or prior authorization using the current Tricare standards for appeals.

 

Tricare officials emphasized how important it is to them and their beneficiaries that the use of compounded preparations remain available. Additionally, the compounding pharmacy community is responsible for working with Tricare to demonstrate the safety and efficacy of those preparations by identifying and providing published studies in the peer reviewed literature to support the continued coverage.

 

IACP Vice-President and Chairman of the Reimbursement and Third Party Committee Baylor Rice, RPh, FIACP, attended and spoke at the Tricare summit on behalf of the Academy. 

 

“Tricare wants to continue coverage for compounds rather than taking the ill-advised and draconian approach of terminating that needed benefit that we’ve seen taken by other payors, says, Rice. "We believe this collaboration between the program and our industry is a positive step in helping both manage the medical need for beneficiaries and the costs to the taxpayers.”

 

As more information becomes available on the planned program addendum and the proposed pricing schedule, IACP will provide that to our membership.  

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