VIA Electronic Submission to http://www.regulations.gov

August 13, 2010

Office of Health Plan Standards and Compliance Assistance

Employee Benefits Security Administration

Room N-5653

United States Department of Labor

200 Constitution Avenue, N.W.

Washington, DC 20210

Attention: RIN 1210-AB42

Office of Consumer Information and Insurance Oversight

Department of Health and Human Services

Attention: OCIIO-9991-IFC

P.O. Box 8016

Baltimore, MD 21244

CC:PA:LPD:PR [REG-118412-10]

Room 5205

Internal Revenue Service

P.O. Box 7604

Ben Franklin Station

Washington, DC 20044

Re: RIN 1210-AB42, OCIIO-9991-IFC, and REG-118412-10; Interim Final Rules for 

Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered 

Health Plan Under the Patient Protection and Affordable Care Act.

Dear Sir or Madam:

Thank you for the opportunity to submit our comments on the IRS, EBSA and HHS interim final 

rules with comment period (IFC) regarding the requirements for health care plans to follow in 

order to claim grandfathered health plan (GHP) status and clarifying the provisions of the Patient 

Protection and Affordable Care Act (PPACA) that apply to GHPs and how they apply. As the 

three agencies consider issues pertinent to determining GHP status and what statutory and 

regulatory provisions apply to GHPs, the National Community Pharmacists Association (NCPA) 

appreciates the opportunity to share our perspectives.
8/13/2010

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NCPA represents America’s community pharmacists, including the owners of more than 23,000 

community pharmacies, pharmacy franchises, and chains. Together these represent an $84 billion 

healthcare marketplace, employ nearly 60,000 licensed pharmacists, employ over 300,000 

fulltime employees, and dispense nearly half of the nation's retail prescription medicines. NCPA 

members are the primary providers of pharmaceutical drugs and supplies to millions of 

Americans and are concerned about the impact of the GHP rule as it applies to prescription drug 

plans. 

NCPA requests that the three agencies make two changes to the IFC. First, NCPA requests that 

the agencies promulgate rules mandating that health plans lose their GHP status if they change a 

GHP to either mandate or incentivize beneficiaries to use mail order pharmacies instead of 

community-based retail pharmacies. Second, NCPA requests that the agencies allow PDPs to 

maintain GHP status when they make changes to their drug formularies, which promote the use 

of generic drugs. NCPA believes that the suggested changes further promote the goals of the 

PPACA of preserving the ability to maintain existing coverage, while expanding access to and 

improving the quality of coverage.

GHP Status Should Cease When a Health Plan Makes a Change to Incentivize or Mandate 

Beneficiary Use of Mail Order Pharmacies 

The PPACA seeks to balance the goal of beneficiaries maintaining existing coverage, if they 

choose to, with the goal of expanding beneficiary access to coverage and improving the quality 

of coverage. The IFC aims to accomplish this goal by allowing health plans to make some 

adjustments while maintaining GHP status without allowing those same plans to make 

unreasonable changes. The latter would undermine the whole legislative purpose of a GHP and 

the concept of maintaining existing coverage. More specifically, the IFC discusses the agencies’ 

intent to allow reasonable routine changes by health plans without those plans risking the loss of 

GHP status.

If the agencies were to allow a health plan to maintain GHP status while making changes to 

incentivize or mandate beneficiary use of mail order pharmacies, they would then be allowing 

fundamental core changes to the nature of the plan. Beneficiaries would lose access to 

community pharmacists, who provide valuable face-to-face advice and counseling to 

beneficiaries on medication management and related issues. Studies have demonstrated that 

community pharmacists’ face-to-face patient interactions have a positive impact on patient 

behavior that is not seen in other contexts, such as when patients receive their medications 

through mail order.1 In other words, any change that encourages or mandates patients to refrain 

from engaging in such interactions restricts patient access to a valuable service and changes the 

structure of the health plan.

 

1

Journal of the American Pharmacists Association. “Patients’ needs and interest in a self‐pay medication therapy 

management service.” Jan/Feb 2010, pgs 72‐77. 2 Journal of the American Pharmacists Association. “Impact of 

drug cost and use of Medicare Part D of medication therapy management services, delivered in 2007.” Nov/Dec 

2009, pgs 813‐820. 
8/13/2010

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Some groups may submit comments claiming that mail order saves beneficiaries money, but the 

cost-saving claims of mail order are illusory. Mandatory mail order drug plans create 3.3 times 

more waste than prescription drug plans that allow patients the freedom to obtain their 

prescription drugs and pharmacy services at a community pharmacy.2 This high rate of waste 

implies that patients using mail order pharmacies are receiving in bulk more than what they 

intend to consume, creating the increased potential risk of overuse and abuse in the future due to 

the stockpiling of outdated prescription drugs. 

Given the lack of true cost savings from mandatory or incentivized mail order, along with the 

concomitant restriction on patient access to valuable face-to-face pharmacy counseling and 

advice, the agencies should not allow health plans to maintain GHP status when they make plan 

changes to incentivize or mandate beneficiary use of mail order pharmacies. 

Changes to Drug Formularies That Encourage the Use of Generics Should Not Trigger a 

Loss of GHP Status

The IFC implies that reasonable, routine plan changes should not trigger the loss of GHP status. 

One such routine change is for a health plan to charge a higher co-pay for a brand drug when a 

generic drug becomes available. When a generic drug becomes available the re-assignment of 

the brand drug to a higher cost-sharing tier is routine, often occurring automatically. 

Accordingly, such changes within formulary tiers of a health plan are not benefit changes and, 

therefore, NCPA requests that the agencies not view such formulary changes as triggering a loss 

of GHP status. The use of a generic instead of a brand is not a change in coverage, because the 

drug is still available to the patient. 

We also are concerned with the potential that plans will change their formulary designs by 

creating or expanding a list of “specialty medications” in order to shift patients to their own mail 

order pharmacy, or only allow medications to be distributed through certain pharmacies. We 

believe that this reduces beneficiary access and is a change in coverage that should result in loss 

of GHP status. 

Conclusion

The IFC regarding the requirements to maintain GHP status should recognize the accessibility to 

high quality services that community pharmacies provide to beneficiaries. The IFC changes 

requested by NCPA serve the legislative and regulatory goals of allowing flexibility to decrease 

beneficiary drug costs and increase beneficiary drug access, while remaining true to the concept 

that beneficiaries should be allowed to keep their existing coverage if they so choose. In 

conclusion, NCPA respectfully requests that: 1) GHP status cease when health plans make 

changes to existing plans to mandate or incentivize beneficiaries to use mail order pharmacies 

and 2) Health plans be allowed to change drug formulary tier composition in order to promote 

beneficiary access to generic medications without risking loss of their GHP status, but not create 

specialty tiers for the sole purpose of shifting patents to their own mail order pharmacies.

 

2 Daniel Halberg, Erin Smith, and Kevin Sedlacek. “Effect of Mail-Order Pharmacy Incentives on Prescription Plan 

Costs”, University of Arkansas for Medical Sciences College of Pharmacy, October 2000. 
8/13/2010

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NCPA appreciates the opportunity to comment on RIN 1210-AB42, OCIIO-9991-IFC, and 

REG-118412-10. Please do not hesitate to contact Christopher R. Smith at 

chris.smith@ncpanet.org, (703) 683-8200 if you have any questions.

Sincerely,

Ronna B. Hauser, PharmD

Vice President, Policy and Regulatory Affairs

National Community Pharmacists Association (NCPA)