By Derek Ishaque
Pharmacy News
December 31, 2012

Summary of CMS Final Ruling on Short Cycle Dispensing

Section 3310 of the Patient Protection and Affordable Care Act requires Medicare Part D Plans to employ utilization management techniques to reduce the per-fill quantity of prescription medications dispensed to beneficiaries residing in LTC facilities. The intent of this “short cycle dispensing” provision is to reduce unused medications by moving from traditional 30-day fills to biweekly, weekly, or daily fills.

The rationale behind this mandate is that shorter fills will result in fewer unconsumed medication units (“waste”) that normally occur due to medication switching, discharges from the facility, death or other causes. In March 2010, the Congressional Budget Office issued an estimate of budgetary impact that included $5.7 billion in Part D program savings from the implementation of short cycle dispensing.

Current Actionable Changes - CMS has mandated an “appropriate day supply” (ADS) of 14 days or less for brand oral solids at long term care (LTC) facilities effective January 1, 2013.

The Regulation Does Not Apply To:

  • Generic drugs
  • Drugs that are difficult to dispense
  • Drugs for acute illness
  • Liquids
  • Drugs that must be dispensed in the original container according to the FDA
  • Ear drops, eye drops, inhalation drugs, nasal sprays, parenteral drugs and topical drugs

Type of Facilities Affected: SNF.  This ruling currently does not affect beneficiaries in ICF-MRs, Assisted Living, Group Homes. 

This ruling will be the first of many in an attempt to provide coverage for more people with the same state & federal financial resources…or less.  While its hard for politicians to fundamentally deny coverage, instead they are and will continue to limit the amount of drugs and services per person for the LTC community. 

Author Description

Derek Ishaque

Derek is the Owner and CEO of SCRx Pharmacy. He has previous experience in Investment Banking at Bear Stearns and private equity at Bridgescale Partners. Derek has a B.S. in Finance from USC.

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