Pharmacies cannot directly bill medicare for compounded drugs sent to physicians.

The FDA isn’t the only federal agency under fi re for its policies on compounding pharmacies. A little-discussed fi nal rule, issued in November by the Centers for Medicare and Medicaid Services (CMS), concerns policies for physician payments starting January 1, 2013. The rule prohibits pharmacies from billing Medicare directly for compounded drugs that they supply to physicians’ offi ces for administration to patients via implantable intrathecal pumps. Almost all of these drugs are compounded Schedule II controlled substances (e.g., morphine, hydromorphone, fentanyl, bupivacaine, clonidine, and baclofen). Some Medicare contractors have been paying pharmacies for compounded drugs that they supply to physicians, and some have not. Both the pharmacies that have been billing Medicare directly and the physicians who have been handling them claim that the CMS decision will force physicians to stop administering compounded cancer and pain medications because they don’t have the fi nancial resources to carry the costs of the drugs. Andrew Holt, DPh, Executive Director of the Tennessee Board of Pharmacy, says that the CMS policy, as outlined in the fi nal rule, is not allowable under Tennessee law and, in fact, might create a confl ict with federal laws regarding controlled substances. He said individualized, compounded drugs cannot be sold to a physician, only to a patient or the patient’s agent. Logan E. Davis, PharmD, Director of Franchise Development at Vital Care, Inc., says that the Medicare decision will make the fungal meningitis outbreak stemming from the New England Compounding Center in Framingham, Mass., even worse. Vital Care grants franchises to independently owned and operated infusion pharmacies in 19 states. Some of these pharmacies do compound medications. The Vital Care pharmacies that have so far been able to bill Medicare directly for drugs that they supply to physicians must be accredited in order to receive payment from Medicare. Accrediting agencies include The Joint Commission and the Accreditation Commission for Health Care. Logan Davis explains: