Multiple Factors Spur Big Increases in TRICARE Mail Order Pharmacy Usage

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By Sandra Basu

WASHINGTON — Last year, a “perfect storm” seemed to result in more prescriptions filled by TRICARE’s mail-order pharmacy, and Chief of Pharmaceutical Operations Rear Adm. Thomas McGinnis said he hopes the trend will continue in 2012.


Rear Adm. Thomas McGinnis

TRICARE Pharmacy Home Delivery is the least-expensive point of service to fill prescriptions when beneficiaries are not using their local military pharmacy. Throughout 2011, the mail-order pharmacy filled slightly more than 1 million prescriptions a month. In October, however, that number jumped to 1.15 million prescriptions and continued its increase to about 1.2 million in November and to almost 1.25 million prescriptions in December.

What caused an increase in maintenance prescription drugs filled through mail order?

McGinnis said several factors may have played a role, including:

  • A public-relations campaign began last summer to encourage and make beneficiaries aware of the savings when they use mail order;
  • A highly publicized contract dispute erupted between Walgreens and TRICARE’s prescription-drug management company might have led beneficiaries to start using mail-order pharmacy; and,
  • Pharmacy copay changes in October reduced generic-formulary drugs purchased through Home Delivery from $3 for a 90-day supply to zero cost.

Pharmacy Initiatives Tackle Convenience, Medical Adherence
The military-pharmacy program fills prescriptions not only stateside: TRICARE in 2005 began delivering refill medications in theater through its mail-order pharmacy.
“We started this up in 2005. Then, in 2009 and 2010, we were hitting a peak of 42,000 prescriptions per year going to deployed troops in theater,” said Rear Adm. Thomas McGinnis, chief of Pharmaceutical Operations. “Even in 2011, with a lot of troop withdrawals, we were still providing 27,305 prescriptions to deployed servicemembers in FY 2011.”
In the past, when TRICARE did not have mail order available for deployed troops,
maintenance medications were stocked in theater and sometimes wasted, McGinnis said.
“Inventories in theater have decreased, saving the department quite a bit of money, and servicemembers get their refills very promptly in theater,” he said.
That is only one innovation that has changed the way TRICARE beneficiaries receive and use medications.
TRICARE also is working to expand electronic prescribing. E-prescribing among civilian providers gained momentum with its inclusion in the Medicare Modernization Act of 2003. An
incentive program for successful e-prescribers was established by the Medicare Improvements for Patients and Providers Act of 2008 and, this year, a penalty
will begin for Medicare physicians
who are not e-prescribing. TRICARE officials say they believe patient safety will be enhanced by e-prescribing because it eliminates potential errors due to misread handwriting. Efforts are under way to allow
civilian providers to electronically transmit prescriptions to all pharmacy dispensing points of service.
“What we saw in 2006 was that there were only 16,000 electronic prescribers, and that grew to 234,000 prescribers in 2010,” McGinnis said.
McGinnis said TRICARE also is participating in an important initiative to improve medication adherence with the National Consumers League.
“What they found — and this probably applies to our beneficiaries as it does those
who are using commercial pharmacies — is that beneficiaries do not take their medications as prescribed,” said McGinnis. “That causes problems. If you don’t take your blood-pressure medications as prescribed, your blood pressure will go up. And, if you go back to the doctor and don’t tell them you are not taking it as prescribed, they will prescribe a higher strength … We really want to work on a campaign where we educate beneficiaries that it is really important to adhere to prescribed therapy.”

“It was almost like the perfect storm: The copays changed on Oct. 1, and all of a sudden generics were free at the mail-order pharmacy for a 90-day supply, so we saw a lot of the [beneficiaries] leaving the Walgreens stores and moving their maintenance medications to the mail-order pharmacy,” McGinnis explained. “We need to continue to urge beneficiaries to help control the pharmacy budget by using mail-order pharmacy for their maintenance medications.”

Pharmacy Costs

Controlling costs is especially important for DoD’s pharmacy program, which dispensed nearly 2.8 million prescriptions each week at a cost of $6.7 billion in 2011. That represents about 14% of DoD’s total healthcare expenses.

Encouraging beneficiaries to use the mail-order pharmacy and educating them about the program’s convenience has been one way in which TRICARE is trying to control costs. While the retail network has been the more popular venue for beneficiaries to pick up their medications, TRICARE has been getting the word out to beneficiaries that, if they take the same medication every month for chronic conditions, it makes sense for them and for TRICARE if they use mail order. Prescriptions obtained through military treatment facility (MTF) pharmacies and mail order cost less to DoD than those obtained through retail pharmacies.

Adjusting pharmacy copays is another way TRICARE has sought to incentivize beneficiaries to use the mail-order pharmacy. DoD has urged Congress to support increased copays in the retail network, a move that members of Congress had been reluctant to take until recently.

In 2010, Congress blocked DoD from increasing TRICARE fees through Sept. 30, 2011, but DoD was free to raise copays when the moratorium expired. On Oct. 1, an increase was put into place, upping charges at retail pharmacies from $3 to $5 for generic-formulary drugs, from $9 to $12 for brand-name formulary drugs and from $22 to $25 for nonformulary medications. The nonformulary-medication increase also applied to mail-order drugs.

Generic-formulary drugs purchased through mail order, on the other hand, were reduced from $3 to zero copay. The copayments for prescriptions filled through the mail-order pharmacy cover a 90-day supply, while coverage is limited to a 30-day supply when purchased at a retail pharmacy.


Patients at Carl R. Darnall Army Medical Center in Texas wait in line to pick up prescriptions. TRICARE is promoting mail-order prescriptions as a way to avoid waits (Photo by Brandy Gill, CRDAMC Public Affairs)

In September 2011, President Obama signaled his administration’s desire to adjust TRICARE pharmacy copays further by shifting retail copays from a dollar amount to a percentage copay, a change that would apply to beneficiaries and retirees but not active-duty military.

Military advocacy groups opposed that change, protesting that it went too far. When the proposal came out, the Military Officers Association of America encouraged beneficiaries to send House and Senate members a suggested message that the healthcare proposals “show a shocking insensitivity to — and devaluation of — the extraordinary demands and sacrifices inherent in a military career.”

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