The House and Senate will decide in the next few weeks how military pharmacy fees will be raised in 2013 — arguably the most significant step to date to slow growth in military health care budgets.

Out-of-pocket costs for military families and retirees who have prescriptions filled in the Tricare network of retail pharmacies depend on final language in the fiscal 2013 Defense Authorization Act. Congress intends to pass a final bill by mid-December.

The House-passed plan for pharmacy fees could win over Senate colleagues during final negotiations on the bill. It already is more palatable with military associations.

It calls for more modest copay hikes than proposed by the Obama administration. But it would achieve the same first-year savings by requiring beneficiaries 65 and older to use the Tricare mail order pharmacy program for refills of all “maintenance drugs,” those that control chronic conditions like high blood pressure and diabetes.

Any brand-name prescription filled by mail rather than in drug stores or supermarkets saves the department 27 percent, on average, said Rear Adm. Thomas J. McGinnis, chief of pharmaceutical operations for Tricare.

Officially, the administration continues to back the pharmacy fee increases it unveiled last spring. Prescriptions would remain free on base, and the co-pay for generic drugs would stay at $5 at retail outlets.

But the administration plans to raise the $12 co-pay at retail to $26 for brand names on the military formulary. The formulary is the department’s list of approved drugs.

The administration also wants to ban retail outlets from filling prescriptions for nonformulary drugs, forcing beneficiaries to use mail order for the most costly brand-name medicines.

Also, the new higher copays would climb $2 more per year until reaching $34 in 2016. After that, they would be adjusted yearly based on overall medical inflation.

Co-pays for brand-name drugs at mail order also would jump, to $26 from $9, for a 90-day supply, then climb slowly to $34 by October 2016, under the administration’s plan.

Tricare already has authority to make these changes. The question is will Congress step in and modify the plan.

The Senate Armed Services Committee, in marking up its version of the 2013 National Defense Authorization Act, stayed silent on the issue.

So unless the bill is amended on the floor next week to interfere with the plan, the Senate will signal Tricare to proceed with planned fee changes.

It withdrew the proposed regulation when the House passed in its version of the defense bill with an alternative pharmacy fee plan.

The House proposes bumping the co-pay for formulary brand names at retail only to $17, versus $26 proposed by the administration. It also would continue to allow prescriptions for nonformulary drugs to be filled at retail, but raises the co-pay for these drugs to $44 versus $25 now.

More significantly, the House plan would limit future co-pay increases to the annual percentage cost-of-living adjustments to military retired pay.

Given actions to date, some retail pharmacy fee increases are a certainty. The battle ahead is in details.

McGinnis suggested the House plan could take longer to implement, delaying new fees perhaps until April 1, given the requirement that beneficiaries 65 and older use mail order for maintenance drugs.

“We would have to do a contract modification with Express Scripts,” he said, referring to the company that administers Tricare pharmacy programs.

Also there would have to be an aggressive information program to explain to senior beneficiaries that prescription refills must be filled by mail order.

The House bill would set this requirement for at least a year. But McGinnis said once beneficiaries try mail order, 98 percent of them like it and continue to use mail over their local pharmacies.

If the House plan prevails, elderly beneficiaries will have time to absorb details. One of those details is certain to be a “fail safe” provision that would allow a patient to get a 30-day supply of any maintenance drug at retail if there’s a hitch in the mail order.

Tricare estimates it pays an average of $324 every three months for a brand-name medication filled at retail, but $233 to $239 via mail order or if filled on base. If beneficiaries ask for a generic substitute for any brand-name drug, the department threemonth cost falls to about $60.

Beneficiaries also save money with mail order because, for the same co-pay, prescriptions typically are filled for 90 days versus 30 days at retail. Generic drugs are provided at no charge through mail order.

Given the incentives and convenience of mail order, McGinnis said usage has popped within the military community over the past year.

In June 2011, 1 million prescriptions a month were filled by mail. That monthly total has climbed since then to about 1.5 million.

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