Issues Confronting Rural Pharmacies after a Decade of Medicare Part D

Date
04/2017
Description

The financial viability of small rural pharmacies became a concern following the advent of Medicare Part D in 2005. Previously receiving payment directly from Medicare based on charges, pharmacies now are reimbursed by private insurance plans per the terms of contracts offered by those plans. There was a significant increase in the number of rural pharmacies that closed following the implementation of Part D, but that rate of closures has moderated in recent years. This brief assess the issues that threaten the sustainability of small rural pharmacies after more than 10 years of experience with Medicare Part D.

Rural independent pharmacies that were the only retail outlet in their Primary Care Service Area were identified (n=643) and an invitation to participate in a brief, electronic survey was sent to those with a known email address (n=430). Responding pharmacies (n=118, 27.4%) indicated four issues in particular that were considered both major and immediate: delays in updates to maximum allowable costs (MACS), charges for direct and indirect remuneration fees, competition from mail order pharmacies; and, status as a "non-preferred pharmacy" for Medicare Part D plans.

Center
RUPRI Center for Rural Health Policy Analysis
Authors
Fred Ullrich, Abiodun Salako, Keith Mueller