Physician Dispensing Oral Drugs Networks Win, for Now, but Don’t Drop Your Guard

Dawn Holcombe, MBA, FACMPE, ACHE
President, DGH Consulting, South Windsor, CT

Oncology practices that dispense oral medications to their patients are celebrating a recent decision by CVS Caremark (CVS Health) to continue to allow physician dispensers into their Medicare Part D networks. This was a momentous decision by CVS Health, but it will not be the end of challenges to physicians dispensing oral drugs. Practices that understand and proactively address these challenges will have an advantage over practices that do not actively engage in these issues in the coming months.

What Happened?

Medicare Part D payments are managed by pharmacy benefit managers (PBMs), which create access to patients through defined networks of pharmacies and dispensing healthcare providers. Currently, only 5 PBMs, including CVS Health, control network access for more than 80% of the covered lives in the United States.1 Decisions by any of those 5 PBMs to restrict the classes of in-network providers will affect patient access to treatments and the ability of dispensing physicians to directly provide coordinated care to their patients who need oral medications.

In the summer of 2016, CVS Health started notifying physicians who dispensed drugs covered by Medicare Part D to patients in their Medicare Advantage network that, effective January 1, 2017, it will terminate dispensing physicians from its Medicare Part D networks, because of a new interpretation of Medicare Part D regulations that had been written 13 years ago.2

This sent shock waves through the oncology community, because the Centers for Medicare & Medicaid Services (CMS) requires that Medicare Part D sponsors comply with Medicare’s “Any Willing Provider” requirements. A Medicare Part D sponsor who refuses to contract with dispensing physicians who are willing to comply with Part D sponsor contractual terms and conditions is violating those federal statutes.2

However, CVS Health has since reconsidered its decision, and, in mid-October, began notifying dispensing physicians that they would be able to continue dispensing oral drugs.

At the end of October, Christine Cramer, Senior Director of Corporate Communications at CVS Health, sent an e-mail to the Community Oncology Alliance, saying, “As you know, through CVS Health’s ongoing regulatory review process, and following an inquiry we had made to CMS earlier this year, we had initially determined that CMS considers physician dispensing facilities that do not have a pharmacy license to be ‘out-of-network’ providers.”

Ms Cramer added, “While we received confirmation from CMS on our interpretation of the rule related to the role of physician dispensers, based on ongoing dialogue with Oncologists as well as CMS, we will not be making this network change. As a result, Oncologists who dispense medications will remain in our Medicare Part D networks pending future dialogue with CMS. We are in the process of communicating this information to affected dispensers and beneficiaries.”

Why Dispensing Physicians Cannot Relax

PBMs and specialty pharmacies show a good deal of interest in oncology drug dispensing, and they seek greater shares of that market. Backing down on its decision does not mean that a PBM such as CVS Health could not use its attempts to block physician dispensers as a marketing tool for its own customers; a clear example of a PBM’s aggressive efforts to manage oncology care.

More PBMs are marketing their services as managers of drug choices under the medical benefit and the pharmacy benefit, which means that PBMs are selling themselves as arbiters of appropriate medical choices for treatment that was rendered in the physician office, and for oral drugs. It is logical to assume that there are going to be continued forays into PBMs’ overseeing of oncology management, similar to the attempts by CVS Health.

What Dispensing Physicians Can Do Now

Physicians dispensing oral drugs have a significant advantage over PBMs in efficiently addressing patient care, monitoring, and adherence issues. However, physician practices do not typically generate reports and monitoring about their advantages, let alone provide reporting of their activities to payers as a routine practice.

Conversely, specialty pharmacies typically collect and report on several patient outcomes, including:

  • Time to prescription fill
  • Medication discontinuation rates and/or reasons
  • Side effects incidence
  • Adjunctive therapy needs
  • Laboratory results
  • Medication switch rates and/or reasons
  • Pain scores
  • Quality-of-life data
  • Remission rates
  • Response rates
  • Tumor progression rates.
Dispensing physicians would be wise to start to monitor and be ready to report on the same outcomes.

Clinical practices have the closest relationship with patients, and the most complete knowledge of their health and disease status.

Oncology practices that leverage that relationship and monitor and report on the details of oral and in-office care will best be able to provide proof of the value and benefit of such a close relationship to payers. Leveraging their relationships with patients will also allow physician practices to address the inevitable future new challenges from PBMs that may affect the relationships between the patient and the physician.


  1. Hiltzik M. Soaring prescription prices cause a nasty divorce in the healthcare market. March 22, 2016. Los Angeles Times. Accessed November 14, 2016.
  2. Frier Levitt. Pharmacy benefit managers’ attack on physician dispensing and impact on patient care: case study of CVS Caremark’s efforts to restrict access to cancer care. White paper. August 2016. Accessed November 14, 2016.

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