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NACDS SEEKING STANDARDIZED SYSTEM FOR COMPUTER VERIFICATION OF THIRD-PARTY Rx CLAIMS IN ADVANCE OF CATASTROPHIC CARE BILL's PHARMACY REQUIREMENTS

Executive Summary

A national, standardized computer system for automated verification of prescription drug claims is a "major" goal of the National Association of Chain Drug Stores (NACDS), outgoing chairman Jack Robinson (Perry Drug) noted at an April 17 session of the NACDS annual meeting in Palm Beach, Florida. The association wants to develop "a computer system for verification of third-party prescription information," Robinson said. Chain pharmacies need "just one magnetic strip reader which could verify all third-party prescription plans," he explained. "This system would be similar to the one used to verify credit cards -- they are simply run through a scanning terminal." Robinson suggested that pharmacists will require "a similar unified system for all the varied third-party prescription programs, a system which would contribute immensely to increased productivity, efficiency and cash flow." The association is working with other pharmacy associations to find a single, national electronic data system, Robinson reported. "With an effective coalition and a unified voice, we can convince third-party organizations to work together to develop one system." Robinson noted that NACDS has "attempted to involve every third-party carrier we have out there, and just as important, manufacturers of equipment." The association is working with the National Council of Prescription Drug Programs. He said NACDS hopes to "capture a lot of the experience" of the bank card industry with electronic data processing, magnetic strips, and scanning devices. NACDS President Ronald Ziegler explained that the association is looking to NCPDP to help choose a standard for electronic point-of-sale data processing. "Without standardization you have a proliferation of various black boxes," Ziegler said. "The standardization is the key." Ziegler suggested that the issue is one of the most important operations questions now facing NACDS with the impending passage of Medicare catastrophic care legislation. If standardization of data processing "does not take place fairly soon," pharmacists nationwide will face "a paper grid-lock" caused by the recordkeeping requirements of the bill, Ziegler said. Noting that NACDS supports the House version of the catastrophic care bill, Ziegler maintained that the association must educate Congress about pharmacy to eliminate proposals like reduction of reimbursement to high-volume pharmacies. "What we don't favor are some of these misconceptions on the part of the legislators about the fact that pharmacies and pharmacists are increasing prices; we're not increasing prices," Ziegler said. "I believe that the Senate version with some of the Heinz [proposals] is simply a lack of education on his part. I'd like to see him study the industry a little bit, and look at our side instead of just the pharmaceutical manufacturers." New Chairman Stewart Turley (Jack Eckerd) announced that NACDS is forming a committee to consider the association's options with regard to health maintenance organizations and managed care systems. At an April 20 press conference during the annual meeting, Turley reported that NACDS is discussing internally the issue of exclusive pharmacy services contracts, which are usually awarded by HMOs and managed care programs to large chains. These contracts, Turley pointed out, can restrict the patients' ability to use smaller chains or independent pharmacies. "We're appointing a small committee to study this [issue] in more depth," Turley said. "From the NACDS viewpoint, there are some tricky areas that we have to consider, including potential antitrust areas . . . as we look at this program. We will be doing this right away." Outgoing Chairman Jack Robinson commented to an April 17 press conference that mail-order pharmacy "is here to stay." Noting that "some chain drugstore members have gotten involved in mail order, some haven't," Robinson said: "Some are asking us, 'Can't we put a stop to it?'" But, "I think it's inevitable," he said (see related T&G, this issue). Mail-service pharmacy "is a form of cost containment," Robinson continued. "All of the providers out there spend big dollars on it to cut down their costs. Mail order is a way" to cut costs. NACDS President Ronald Ziegler said his job is to prevent issues like mail-service pharmacy from dividing the industry. "I'm going to do everything I can to prevent these discussions from becoming politicized," Ziegler remarked. "My effort is to listen, to form coalitions, and to have respect for the points of view of others." The challenge for NACDS is "to be on the cutting edge of the trend; we have to be aware of these trends," he maintained. When it was pointed out that other pharmacy associations have vigorously opposed mail-order pharmacy, Ziegler emphasized that "NACDS is not promoting it." However, Ziegler said, "in a free marketplace, mail order is a cost-containment question." He noted that large corporations "are shifting their forms for providing benefits to HMOs and so forth." Turley, who was elected for the second time, having served as chairman in 1978-1979, was one of three new officers announced by NACDS for the 1988-1989 term. Tulsa, Oklahoma-based May's Drug Stores President Gerald Heller was named vice chairman of the association, and Thrifty Corporation President & CO Richard Eils was elected NACDS treasurer. In addition, former NACDS President Robert Bolger received the 1988 NACDS/Robert Begley Award, honoring "the qualities of gentleness, humility, and service to colleagues."

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