Pharmacies across the nation are facing increasingly aggressive enforcement actions from regulators, auditors, and Pharmacy Benefit Managers (PBMs). Few actions strike more directly at the heart of a pharmacy's survival than the revocation of Medicare billing privileges. Without these privileges, pharmacies are unable to serve Medicare beneficiaries and risk devastating financial consequences. Recently, Buchanan Pharmacy Attorneys secured a significant victory on behalf of a Pennsylvania-based pharmacy, successfully overturning a Medicare revocation and ensuring the preservation of the pharmacy's ability to continue serving its community.
The case illustrates both the dangers that independent pharmacies face in today's regulatory environment and the effectiveness of skilled legal advocacy. The revocation had been premised on alleged non-compliance with supplier standards applicable to durable medical equipment (DME). By identifying key exemption issues, presenting detailed evidence, and framing a compelling compliance narrative, Buchanan achieved a favorable determination that reinstated the pharmacy's enrollment and billing privileges.
The Underlying Basis for Revocation
The pharmacy's revocation stemmed from findings made during a CMS-contracted site visit. According to the initial determination, the Pharmacy had not provided adequate proof that it advised beneficiaries of their rights to either rent or purchase inexpensive or routinely purchased equipment, nor had it demonstrated compliance with requirements regarding the capped rental policy. In addition, the site visit alleged that the Pharmacy failed to produce documentation of maintenance, repairs, and exchanges upon request.
On this basis, CMS revoked the pharmacy's Medicare enrollment and billing privileges pursuant to 42 C.F.R. § 424.535(a)(1) and imposed a one-year re-enrollment bar pursuant to § 424.535(c). The impact of such an action cannot be overstated. Revocation of billing privileges effectively bars the Pharmacy from participating in the Medicare program, severely undermining its ability to care for patients and maintain financial stability.
Buchanan's Advocacy on Reconsideration
When faced with these allegations, Buchanan Pharmacy Attorneys carefully analyzed both the regulatory framework and the specific facts of the case. The team recognized immediately that the revocation was not only excessive but also premised on an incorrect application of CMS standards.
First, Buchanan established that the Pharmacy was exempt from the very accreditation requirements that CMS and its contractor sought to apply. CMS itself had already confirmed the Pharmacy's exemption status. This exemption was not a minor technicality; it was central to the analysis of whether the supplier standards at issue even applied to the pharmacy's operations. Buchanan gathered and submitted documentary evidence confirming this exemption, including prior communications from CMS.
Second, Buchanan demonstrated that the Pharmacy did not rent durable medical equipment in any capacity. As a result, the specific requirement to advise beneficiaries about rental versus purchase options was inapplicable. The allegation that the Pharmacy had failed to provide such notices was, therefore, misplaced.
Third, Buchanan addressed the claim regarding maintenance and repair records. By virtue of the exemption status, the Pharmacy was not required to maintain the types of records CMS had requested in the manner alleged. Nonetheless, Buchanan emphasized the Pharmacy's continued commitment to proper recordkeeping and to meeting all standards that legitimately applied to its operations.
Finally, Buchanan presented a broader compliance narrative that framed the Pharmacy not as a negligent provider but as an organization acting in good faith and in reliance on CMS's own guidance. The Pharmacy's commitment to patient care, coupled with its adherence to applicable regulatory standards, underscored the unjust nature of the revocation.
The Favorable Determination
CMS's contractor ultimately issued a favorable determination in response to the reconsideration request. The decision specifically found that the Pharmacy had provided sufficient documentation to demonstrate compliance with the supplier standards that formed the basis of the revocation. The ruling overturned both the revocation and the one-year re-enrollment bar.
As a result, the Pharmacy's Medicare enrollment and billing privileges were reinstated. The determination recognized the validity of the exemption and confirmed that the Pharmacy had not violated the standards cited in the original notice of revocation.
This outcome was not only a vindication for the Pharmacy but also an important reminder that revocation determinations can be successfully challenged when they are unsupported by law or fact.
Broader Implications for Pharmacies
The significance of this case extends beyond one Pennsylvania pharmacy. Pharmacies nationwide should take note of the growing trend of revocations and sanctions based on technical or misapplied standards. CMS contractors often apply a uniform approach to enforcement without fully considering the specific operations or exemptions applicable to a particular pharmacy.
Independent pharmacies must recognize several critical points. Documentation remains essential, even where exemptions apply. Pharmacies should maintain clear records demonstrating compliance or exemption status, including signed notices, patient logs, or letters. Moreover, revocations should never be accepted as final. The reconsideration process exists for a reason, and as this case demonstrates, appeals can be won. Perhaps most importantly, pharmacies should not attempt to navigate these complex regulatory challenges alone. Experienced counsel with both legal and industry expertise can identify the right arguments, marshal the necessary evidence, and present a persuasive case.
Buchanan's Role in Protecting Pharmacies
The reinstatement of the Pharmacy's billing privileges highlights the value of engaging experienced pharmacy attorneys who understand both the regulatory environment and the practical realities of pharmacy operations. Buchanan Pharmacy Attorneys bring a unique combination of legal acumen and industry knowledge to these disputes. The team's ability to recognize the exemption issue, align it with CMS's own prior guidance, and frame a compelling compliance narrative was central to the success of this appeal.
This case also reflects Buchanan's broader commitment to defending pharmacies against regulatory overreach. Whether the threat arises from CMS, PBMs, or state boards of pharmacy, Buchanan's approach is rooted in aggressive advocacy, careful legal analysis, and a deep understanding of the pharmacy industry.
Conclusion
The successful overturning of a Medicare revocation for this Pennsylvania pharmacy underscores both the risks pharmacies face and the opportunities to prevail with the right representation. Revocations and sanctions are not always the final word. With timely and strategic advocacy, pharmacies can protect their rights, preserve their billing privileges, and continue serving patients who depend on them.
At Buchanan, we view these victories as more than just legal outcomes. They are essential to sustaining independent pharmacies, protecting access to care, and ensuring that regulatory enforcement does not overstep its bounds. For pharmacies facing revocations, audits, or network terminations, the lesson is clear: the fight is winnable, but only with the right team in your corner.
This article was co-authored with Kelly Reynolds, Associate.
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