ALEXANDRIA, VA – The Fox Insurance Co. has agreed to wire $13.6 million in overdue payments for Medicare Part D prescription drug claims to ProCare Pharmacy Benefit Management, Inc., as a result of pressure from the Centers for Medicare & Medicaid, the National Community Pharmacists Assoc. and Senators Max Baucus (D-Mont.) and Charles Grassley (R-Iowa).

The payments come more than four months after CMS terminated its contract with Fox for the Medicare Part D drug plan after a review revealed multiple policy violations. CMS officials said it was the first termination of a contract for Part D since the program was created. As a result, more than 123,000 people who were enrolled in the Fox Insurance plan were transferred to coverage by other companies.

As part of the agreement, ProCare is closing claims and processing payments for claims from Feb. 16-28, 2010, in order to provide reimbursements to independent community pharmacies which provided prescription drugs to seniors.

The agreement represents only a portion of the money Fox Insurance still owes. According to the NCPA, Fox still owes tens of millions of dollars in unpaid claims from March. For its part, Fox has promised to clarify a few lingering issues to fulfill its remaining obligations.

Efforts to resolve the non-payments by Fox for prescription medications covered by Medicare have been ongoing. On May 9, NCPA officials sent a letter on behalf of independent community pharmacies to CMS asking the agency to instruct Fox to make the delinquent payments. In reply, on May 17, CMS sent Fox a letter urging the insurer to honor its obligations.

During this period, Fox executives tried unsuccessfully through the courts to have ther CMS contract reinstated. Movement toward a settlement came as a result of a June 30 letter sent to Kary Shankar, Fox Insurance's CEO, by Baucus, chairman of the Senate Finance Committee, and Grassley, its ranking committee member.

In the letter, Baucus and Grassley said Fox received payments in February and March from CMS totaling more than $63.9 million and that Fox, in turn, had not paid any of that money for the associated claims.

“We find it particularly troubling that Fox is arguing in district court to have its contract reinstated while, according to CMS, the company continues to ignore its original fiduciary obligations for the period when the contract was in force,” the senators said. “Failure to pay these claims is in direct violation of the original contract and prompt-pay requirements.”

Douglas Hoey, the NCPA's acting executive vice president and CEO, said, "We want to thank Senators Max Baucus and Charles Grassley for their strong leadership in resolving the issue of the withholding of payments for rightful Medicare Part D prescription drug claims from independent community pharmacies that contracted with Fox Insurance. Community pharmacies and ProCare, the PBM administrator, were left holding the bag, which is now being rectified with the first wave of payments being sent out."

"We appreciate Fox Insurance's recent efforts to set things right," he added. "It is a first step, but only a step, in solving the problem. We will be watching to make sure every penny owed is paid, and hope no Part D plan sponsors will require this amount of attention in the future."