Northeast Pharmacy Service Corporation

NPSC Story

The Beginning 

Northeast Pharmacy Service Corporation began at a luncheon meeting of four Massachusetts pharmacists who were independent owners.  They met to prepare for an appointment with principals at John Hancock.  Their purpose was to propose that they could organize the independent Massachusetts pharmacies under a single contract to provide prescription services in Hancock’s plans. They expected their proposal to be warmly welcomed, which it was.  Access to third party prescription programs remains a high priority at NPSC today.After its successes in Massachusetts, NPSC intended to become a regional organization in New England.  Some 250 Connecticut pharmacies came on board by the end of 1992.  In mid-1993, BCBS-CT awarded NPSC the contract to administer its restricted pharmacy network.

Programs through the 90s 

Through the mid-90s, NPSC managed a dozen or more clients’ prescription programs including the Merit program, an early-day discount card in CT.  Closed pharmacy networks were the “cost saving rave” of the mid 90’s but eventually, “any willing provider” legislation was enacted in Massachusetts.In mid-1995, NPSC was preparing to operate the pharmacy benefit for Health Right in Connecticut.  The federal rules mandated comprehensive pharmacy and pharmacist credentialing.  NPSC vigorously pursued the credentials of participating pharmacies in Connecticut and later also in Massachusetts.  Credentialing is now an ongoing activity of the company.Along with credentialing, NPSC has been fiscal intermediary for its network for many pharmacy benefit plans; carving the monies into payments for individual pharmacies.  Today, the majority of the NPSC network stores receive ACH payments for these plans.

Third Party Contracting

The combination of fiduciary capacity and credentialing proves to be a valuable asset for participating pharmacies.  From a payer’s perspective, NPSC is a very efficient mechanism for contracting with participating pharmacies.  Most Pharmacy Benefit Managers (PBMs) will avoid contracting at the individual pharmacy level, if they possibly can.  As an example, even though each participating pharmacy must have an individual contract with Caremark, NPSC is appointed as administrator by each participating pharmacy, an arrangement preferred by Caremark.  Our relationships with local pharmacists are highly valued by PBMs.

Governance

Though NPSC behaves as if it were a not-for-profit, it is incorporated as a for-profit corporation.   Today, there are 13 Directors:  8-10 owners, as many as 2 pharmacist non-owners, and three who are neither directly or indirectly involved in the business of operating pharmacies.  Each director owns a share of stock, which is surrendered whenever a Director leaves their office.  The stock has a nominal value of ten dollars. All profit remains within the company for reinvestment.

Today

The power of NPSC and its relationships with other pharmacy organizations can be seen today.  In Connecticut, Medicaid cuts have been modest even though the battle has raged for over 10 years.  Medicare recovery projects have been beaten back.  The $1.30 per prescription tax in Massachusetts was ruled in pharmacy’s favor with NPSC working in combination with the state association and multiple pharmacy chain headquarters.The company developed a step-by-step plan to guide the network to compliance with HIPAA; first the Privacy Rule in 2003 and then in 2005 the Security Rule.  While this was an aggressive project for the corporation, the savings of time and money to network pharmacies is many times the cost and effort.

Programs and Services 

NPSC has its own discount card program, The Loyalty Card.  NPSC created Medication Error Quality Assurance Program for Connecticut Pharmacies when the state mandated that each pharmacy establish such a program in 2003.  The company guided Participating Pharmacies through the maze of Medicare discount cards in 2004.  In 2005, we provided Continuous Quality Improvement Program to Massachusetts pharmacies to meet the state’s mandate. Northeast actively secured contracts for Medicare D plans on behalf of its network.  In 2006, we plunged into supporting the implementation of Medicare D with all of our energies and resources. NPSC is planning for the future.  We have assembled valuable materials and contacts in a guide book for individuals who want to open a new pharmacy; this is in response to a renewed interest in opening new pharmacies.  Today, we are actively working on an audit support program and we recently completed a technician training manual for the network. 

Accreditation for DMEPOS

In May 2005, NPSC began to encourage Medicare Part B providers to consider accreditation in order to continue as providers beyond September 30, 2009.  NPSC has been providing information, trained field staff support, access to consultants, website links, and other resources to assist in this arduous task. We are pleased that a number of participating pharmacies have pursued this option.

The Future

NPSC has approximately 250 participating pharmacies in its network, with growth coming from other areas of New England, new store openings, and recruitment activities in the field.  We currently have wholesale supply arrangements with McKesson, HD Smith, and Kinray.

NPSC, with its staff of 9 employees, is actively working to expand the services it provides to its network and to make those services available to a larger service area.