NCPA Offers Solutions to Help Ensure Medicare PECOS Program Doesn't Disrupt Community Pharmacies Ability to Serve Patients

Alexandria, VA - July 08, 2010


The National Community Pharmacists Association (NCPA) has submitted comments to the Centers for Medicare and Medicaid Services (CMS) regarding its interim final rule for the Internet-based Provider Enrollment, Chain and Ownership System (PECOS) program, an electronic system that can be used in lieu of the Medicare paper enrollment application. Community pharmacies that sell Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS), like diabetes testing strips, are required to verify provider/referrer enrollment prior to receiving Medicare reimbursement. NCPA's comments detail the PECOS program's current shortcomings and offer constructive solutions to ensure that the PECOS transition does not disrupt patients' access to DMEPOS products at their community pharmacies.

"Community pharmacies appreciate and support the PECOS program's effort to reduce waste, fraud and abuse in Medicare," said Douglas Hoey, RPh, NCPA Acting Executive Vice President and CEO. "However, the slow pace of enrollment and database updates, along with other deficiencies, creates headaches for community pharmacies and could limit access to Medicare Part B medical supplies for seniors, especially in underserved areas. That's why NCPA offered five recommendations that could strengthen the implementation process."

A passage at the end of NCPA's submitted comments briefly summarizes the recommendations:

"If enacted in its current form and on the date proposed, July 6, 2010, (PECOS) will result in confusion and disruption in the ability of Part B beneficiaries to obtain access to their Part B services and supplies, as well as expose Part B suppliers to the risk of administrative review and potential recoupment of ultimately rejected Part B claims for reimbursement. The Phase 2 edits to PECOS are not ready for implementation and, therefore, existing PECOS deficiencies could result in delays in filling validly reimbursable Part B prescriptions. Given these PECOS deficiencies, NCPA respectfully requests that CMS implement the following changes: 1) Delay the implementation of the Phase 2 PECOS edits and administrative review and recoupment of PECOS-based claim rejections until at least January 3, 2011; 2) Require pharmacy access to nightly provider/referrer enrollment updates to PECOS; 3) Develop more granular CEDI error codes for pharmacists to identify and resolve Part B claims denials; 4)Allow one year for Part B suppliers to re-bill claims denied due to PECOS edits; and 5) Remove requirements to include the teaching physician as the ordering or referring supplier and the legal name of the physician or eligible provider on the claim."

There are several reasons for these recommendations. The PECOS system is supposed to be operational this month, but it is lagging in terms of enrolling providers, leaving community pharmacies vulnerable to possible administrative review and recoupment efforts through no fault of their own. At a minimum, a six month delay is the prudent course of action. In addition, the PECOS system is only updated periodically and not on a nightly basis, which means all of the relevant information is available when community pharmacies prepare to submit claims. Also, the common electronic data interchange (CEDI) is not informative enough to help community pharmacies ascertain the reason why PECOS has labeled a claim deficient.

Hoey added, "We believe if CMS adopts our recommendations that developing, but unnecessary, problems with the PECOS program can be nipped in the bud."

On June 30, shortly before the comments deadline, CMS issued a press release providing additional clarification that it will not begin automatically rejecting claims based on PECOS edits, starting July 6. In its submitted comments, NCPA recognized and welcomed CMS' change, but remains concerned that the agency may still engage in administrative review and recoupment of submitted claims, which are ultimately rejected based on PECOS edits.


The National Community Pharmacists Association (NCPA®) represents America's community pharmacists, including the owners of more than 22,700 independent community pharmacies, pharmacy franchises, and chains. Together they represent an $88 billion health-care marketplace, employ over 65,000 pharmacists, and dispense over 40% of all retail prescriptions. To learn more go to or read NCPA's blog, The Dose, at
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