Insurers sponsoring drug plans under the Medicare prescription drug benefit will not be allowed to "co-brand" with other organizations for 2007 and future plan years, CMS Deputy Administrator Leslie Norwalk said on Tuesday at a House Energy and Commerce Subcommittee on Health hearing, CQ HealthBeat reports. For 2006, insurers were permitted to co-brand with chain drug stores, state pharmaceutical assistance programs and seniors' groups such as AARP. For such plans, both the name of the drug plan and the co-brand are listed on a beneficiary's Medicare card. Norwalk said the practice confused some beneficiaries who mistakenly thought they could fill prescriptions only at the pharmacies listed on their cards. Prohibiting co-branding "should alleviate any potential for beneficiary confusion over which pharmacies they can use," Norwalk said. Rep. Frank Pallone (D-N.J.) said, "The co-branding issue is just outrageous." Pallone and other panel members said beneficiaries were confused by co-branding.

Pharmacies and PBMs
The hearing also included testimony from pharmacists on their experiences with the drug benefit. Witnesses from groups representing independent pharmacy owners said pharmacy benefit managers are delaying payments by up to 45 days under the drug benefit. Norwalk said that CMS is not authorized to interfere with contracts between PBMs and pharmacies but that the agency does investigate complaints about pharmacies not receiving payments. A recent CMS survey finds that as many as 18 of the leading 20 prescription drug plans, which account for 90% of beneficiaries' drug coverage, pay pharmacy claims on a 15-day billing cycle. Buddy Harden, executive vice president and CEO of the Georgia Pharmacy Association, said, "There are no negotiations" between pharmacies and PBMs. "They are 'take it or leave it,'" he said. Mark Merritt -- president of the Pharmaceutical Care Management Association, which represents PBMs -- said members of his group have promised to pay all "clean" electronic claims within 30 days. He said 30 days is the "industry standard" for electronic claims submitted by doctors, hospitals and other Medicare providers. Rep. Sherrod Brown (D-Ohio), ranking member of the panel, said, "When pharmacies are underpaid, they can't properly serve Medicare beneficiaries." Rep. Charlie Norwood (R-Ga.), said, "The single pharmacist out there doesn't have any option. The big plan has all the options" (Carey, CQ HealthBeat, 5/23).