Fox Insurance Pays $13.6M Medicare Part D Claims

Author: National Community Pharmacists Association
Published: 2010/07/19 - Updated: 2026/02/04
Publication Type: Announcement
Category Topic: Insurance - Related Publications

Page Content: Synopsis - Introduction - Main - Insights, Updates

Synopsis: This report documents a significant Medicare Part D payment dispute involving Fox Insurance Company and independent community pharmacies serving seniors. The information, issued by the National Community Pharmacists Association (NCPA), details how Fox Insurance withheld $13.6 million in prescription drug claim payments after the Centers for Medicare and Medicaid Services terminated their contract due to operational deficiencies. This account proves particularly valuable to healthcare providers, Medicare beneficiaries, and disability advocates because it reveals the critical role of government oversight in protecting pharmacy reimbursements that directly affect medication access for seniors and disabled individuals who depend on Part D coverage. The case illustrates systemic vulnerabilities in prescription benefit programs and demonstrates how advocacy organizations can work with federal legislators to resolve payment disputes that threaten healthcare delivery in underserved communities - Disabled World (DW).

Introduction

Fox Insurance Agrees to Pay Delinquent Medicare Part D Claims

Fox Insurance Company agreed July 9 to wire $13.6 million in overdue payments for Medicare Part D prescription drug claims to the administrators of its plan - ProCare Pharmacy Benefit Management, Inc. - which is currently closing claims and beginning to process payments for claims from the period of Feb. 16-28, 2010 in order to provide long-awaited reimbursements to independent community pharmacies for providing prescription drugs to seniors.

Fox Insurance still owes tens of millions of dollars in unpaid Fox insurance claims from March, and is promising to clarify a few lingering issues to fulfill its remaining obligations. This entire ordeal began when the Centers for Medicare and Medicaid Services (CMS) terminated Fox Insurance's Part D contract as a result of "significant deficiencies" in its operations on March 9, and Fox proceeded to withhold outstanding claims around that time period.

Main Content

The effort to resolve this issue began in earnest when the National Community Pharmacists Association (NCPA) sent a May 9 letter on behalf of independent community pharmacies to CMS asking the agency to instruct Fox Insurance to make these delinquent payments. That effort led CMS to send Fox Insurance a letter urging the insurer to honor its obligations on May 17. However, it apparently took the interventions of the chairman and ranking member of the U.S. Senate Finance Committee, Sens. Max Baucus (D-MT) and Charles Grassley (R-IA), who sent a letter to Fox Insurance on July 6, to prompt action from Fox Insurance. In response Douglas Hoey, RPh, NCPA acting executive vice president and CEO, issued the following statement:

"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. Even though CMS terminated its Part D contract, Fox had a responsibility to honor these claims. Surprisingly, the foot dragging continued despite CMS' admonition to Fox. 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."

"Medicare Part D is relied upon by seniors to access the medications they need. Independent community pharmacies comprise 40 percent of the retail pharmacy industry, and are often located in underserved rural and urban areas. For the program to work all of the participants need to work as a team, and that includes fulfilling their financial obligations. That's why it was incumbent on Fox Insurance to stop with the delays and legal wrangling."

"Finally, independent community pharmacies that serve seniors through the Fox Insurance plan, and operate off of thin profit margins, can get paid for their honest services. We appreciate Fox Insurance's recent efforts to set things right. 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. That's the only way for the Medicare Part D program to be truly successful."

The National Community Pharmacists Association (NCPA) represents America's community pharmacists, including the owners of more than 22,700 independent community pharmacies, pharmacy franchises, and chains. Together they represent an $88 billion health-care marketplace, employ over 65,000 pharmacists, and dispense over 40% of all retail prescriptions.

Insights, Analysis, and Developments

Editorial Note: The Fox Insurance payment dispute highlights a rarely discussed vulnerability in Medicare Part D - the financial stability of participating insurers and their obligation to honor claims even after contract termination. While this 2010 case ended with payment recovery, it raises enduring questions about adequate safeguards for pharmacies that serve vulnerable populations on thin margins. Independent pharmacies, which dispense over 40 percent of retail prescriptions and often operate as the sole providers in rural and underserved areas, face existential threats when insurers delay or withhold legitimate reimbursements. The intervention by Senate Finance Committee leaders ultimately resolved this situation, but the months-long delay created cash flow crises for small businesses that had already dispensed medications to seniors in good faith. This case serves as a reminder that Medicare Part D's success depends not just on benefit design, but on the financial reliability of every participant in the payment chain - a lesson that remains relevant as the program continues to evolve - Disabled World (DW).