A change to Tricare's compounded medication coverage policy May 1 slashed costs for these medications by more than 74 percent in less than a month.
But for some patients, the switch has been anything but easy.
The Defense Health Agency saw reimbursements for approved compounds drop from nearly $1 billion in the first four months of 2015 to just $4 million in May.
The precipitous decline is largely attributable to a policy change that requires all ingredients in compounded medications to be approved by the Food and Drug Administration.
The rule had been on the books for years, but a new screening process lets Tricare's pharmacy benefits manager, Express Scripts, screen all ingredients, allowing DHA to determine whether prescriptions meet the coverage criteria.
The sharp rise in orders for compounded medications in the months leading up to the new policy, Tricare officials say, resulted in large part from aggressive marketing campaigns by some compounding pharmacy companies that cold-called Tricare beneficiaries or contacted them directly to sell them specialty prescriptions for ailments like pain, skin disorders and erectile dysfunction.
DHA spokesman Kevin Dwyer said in the first week of May these compounded medications continued to affect the bottom line and "warranted the implementation of additional administrative controls," to include enhanced screening techniques starting May 11.
"Some compound pharmacies appeared to adjust their activities and claims to elude the newly implemented controls and work around the screening process," Dwyer said.
But starting May 11, the Express Scripts screening process included using the company's "commercial reject list," a compilation of ingredients that Express Scripts does not cover for its private-sector customers.
The change, Dwyer said, should ensure that Tricare pays only for compounds that are proven safe and effective.
Tricare has set up a way for beneficiaries whose compounded medications are rejected by the system to request prior authorization or, if they are denied, appeal the decision.
But for some beneficiaries, the transition has been a challenge. Faith, an Air Force spouse who asked that her last name not be used to protect her son's privacy, contacted Military Times as her child's supply of needed medications ran out and said she had not received approval to refill them.
Her 7-year-old, who suffers from a complex medical condition that includes a mitochondrial disorder, takes two compounded medications to function and prevent seizures.
He went without one medication for days while she, her son's pharmacist and her doctors frantically called Express Scripts, Tricare and DHA to solve the problem.
"We had no idea these medications would be denied until they were almost out and we called in the refill request. We received a call from the pharmacy the next day telling us there was a problem," she said.
Meanwhile, her son's health deteriorated. "He has black circles under his eyes, he is sleeping a lot —14 hours a night — and is taking naps. He told me he doesn't feel right," Faith said.
A DHA official intervened and approved the medications just days after the mother contacted Military Times. She said she hopes it won't happen again.
"Tricare's new policy on compounded medications is essentially designed to save money at any cost, denying medications even medically fragile children can't get elsewhere," she said.
In April, Tricare filled 105,200 compound prescriptions. By May, that number had dropped to 41,800.
Dwyer said Tricare customer service has received 20 questions or complaints about the policy change, while Express Scripts has received 330 requests for prior authorization reviews.
At least 20 of those were approved, according to DHA.
But complaints also have reached the halls of Congress. Two Republican lawmakers, Reps. Austin Scott of Georgia and Walter Jones of North Carolina, wrote Dr. Jonathan Woodson, assistant secretary of defense for health affairs, on June 10 asking him to investigate after hearing from constituents on the matter.
"We appreciate how difficult a task it is to run an efficient but most importantly, high-quality health care system for our personnel," the lawmakers wrote. "We respectfully ask that, in addition to your important efforts to eliminate deceptive marketing practices, you investigate the problems we are hearing about."
Pentagon spokesman Air Force Maj. Benjamin Sakrisson said DoD has received the letter and plans to respond promptly.
"We appreciate their concerns regarding this issue," he said.
Pharmacy advocacy groups say they understand the need to crack down on products coming from what they describe as "outlier companies that bill the program at questionably high rates."
But the new policy has done more than simply "scrutinize a few bad apples," Douglas Hoey, National Community Pharmacists Association chief executive officer, said.
NCPA believes that Tricare and Express Scripts can "strike a better balance," Hoey said.
"Unfortunately and surprisingly, DoD did an unannounced about-face and has rejected many claims from these pharmacists trying to help TRICARE patients," Hoey wrote in an editorial published online June 5 in the Morning Consult.
"The clear answer is to scrutinize the few bad apples and those high-dollar claims. DOD initially told NCPA it would take this approach and continue to cover standard compound medications."