September 27, 2022
September 26, 2022
September 25, 2022
Community pharmacists in Ohio continue to fear that the state’s Medicaid program will push them out of business and deprive some communities of access to medications.
After years of complaints about underpayment and possible profiteering from prescription drugs, the 2019 legislature ordered the Department of Medicaid to undertake bold reform.
Instead of dealing with multiple pharmaceutical intermediaries who now manage billions of drug transactions behind the veil of contracts they hold with insurance companies, the law requires only one intermediary to contract directly with the state. That way, it is thought, state officials will have an unobstructed view of what happens to the huge sums of taxpayer money that goes to pay for Medicaid drugs.
But with the new system in place Oct. 1, some community pharmacists across the state worry it won’t solve some of the problems they had hoped for. And they were the ones who sounded the alarm in the first place.
“I keep trying to give them the benefit of the doubt,” Nancy Wharmby, president of Medicine Center Pharmacy, said in an interview Tuesday. “I really believe they started this process with the best of intentions and then it started spiraling out of control and now they have a mess and they don’t know how to get it back under control.”
Medicine Center has four retail pharmacies in northeast Ohio, and like most other pharmacies in the state, much of its business comes from the state’s Medicaid program.
Statewide, 3.39 million people are enrolled in Medicaid, which provides health care to the poor. That’s between a quarter and a third of the state’s 11.85 million people.
One aspect of rolling out the new system that involves the state’s community pharmacists might be at least partly inevitable with any big change: It’s been messy.
Wharmby described how the initial go-live date with a single middleman — or pharmacy benefits manager — was July 1. Even before that, pharmacies were under heavy pressure from the state agency and some of their drug buying groups to sign contracts or risk being pulled from a program that makes up a large part of their activity.
After the Medicaid department pushed back its in-service date, Medicine Center signed its contract. Then, on July 15, he received an email from the Medicaid department saying he had until July 22 to submit reviews.
This seemed unfair to Wharmby.
“We emailed and said ‘What the hell is this?'” she said. same contract. Now we found out that now that we have already submitted our contract, we could have negotiated better terms. »
Wharmby said the department allowed his company to submit revisions and they were accepted. But she later learned that other pharmacies were still making deals that may be better. For her, this raises questions about the transparency of the process and the ability of Gainwell Technologies, the sole pharmacy benefit manager, to administer so many different contracts at the same time.
There are still specific provisions in at least some contracts that cause pharmacies to fear they will continue to lose money serving some Medicaid patients.
Pharmacy Benefit Managers, or PBMs, have enormous influence when it comes to drug transactions. They negotiate discounts with manufacturers, decide which drugs are covered, contract with pharmacies and determine the amount to be reimbursed for the drugs they dispense.
At least as far back as 2016, community pharmacists in Ohio complained that the then-dominant PBM in Medicaid, CVS Caremark, reimbursed them too little for drugs. Meanwhile, the company had an apparent conflict as it determined reimbursements not only for these pharmacies, but also for those owned by its parent company, CVS Health.
There are also numerous complaints that PBMs largely operate in the dark, so it’s unclear how much they really earn.
Amid the outcry, the Medicaid department in 2018 asked CVS Caremark and OptumRx to spit out all of their data from 2017. An analysis determined they were charging taxpayers $224 million more for drugs than they were charging. were paying pharmacies – an amount the analyst concluded was three to six times the going rate.
Today, under the new agreement with a single PBM, community pharmacists in Ohio still fear poor Medicaid terms could prevent them from going bankrupt.
They were concerned when an early draft of the contract gave Gainwell 90 days to reimburse them for drugs, when the Medicaid department had to pay Gainwell weekly. That’s an unreasonable amount of money to allow the state contractor to hold, interest-free, for three months, they said, explaining that many lacked the cash to maintain it.
Two pharmacies told the Capital Journal they were able to negotiate that period up to 30 days, but it’s unclear whether all pharmacies signing contracts did so.
Medicaid spokeswoman Lisa Lawless did not respond directly to questions about this and other matters. Instead, she sent answers to frequently asked questions about pricing under the new system.
“Gainwell’s claims will be paid on a weekly payment cycle,” he said. “While federal law requires payment of claims for clean claims within 90 days, nearly all claims can and will be processed much faster.”
Perhaps the biggest concern for community pharmacies is that under the new system, the dispensing fee will still not cover what they say it costs to fill a given prescription. The dispensing fee is what it costs to pay the overhead, for the bottle and the label, for a pharmacist to consult patients and things like that.
Wharmby said those costs are higher when it comes to Medicaid patients.
“I think on many levels the population has the greatest needs,” she said. “They often need a little more touch. Whether it’s making sure they understand their medications. Whether it’s making sure they have access to their medication, possibly delivering it to them, or packaging it differently. The peculiarity of this population is that they seem to need a little higher touch, but since 2016 and beyond, this reimbursement is decreasing and often (serving these patients is done) at a loss.
Lynne Fruth is president of a pharmacy chain operating in southeast Ohio, an area with a high proportion of Medicaid patients. The share of Medicaid patients at Fruth pharmacies has fallen from 36% in 2019 to 45% now, Fruth said. She added that it costs well over $12 to dispense each prescription at many of these stores.
Meanwhile, under the new system, pharmacies will receive a three-tier Medicaid dispensing fee based on a store’s volume and the percentage of prescriptions destined for Medicaid. They range from $7.64 for the lowest tier to $10.50 for the highest tier — a tier that Fruth said none of his company’s stores are eligible for.
“We’re losing more money on Medicaid because we’re filling more Medicaid prescriptions,” Fruth said last week. “Right now, we’re looking at our stores.”
She said her West Virginia-based company is evaluating whether it can afford to keep some of its Ohio stores open if reimbursements and distribution fees don’t improve. And it’s not just about keeping a small-town business afloat.
Especially for the poor – who are more likely to face challenges like not having a car or not being able to afford gas – having somewhere nearby to get medicine is vital. But a 2019 survey by The Columbus Dispatch found that the number of “pharmaceutical wastelands” in sparsely populated sections of Ohio is growing.
A potential desert is in Albany, 10 miles southwest of Athens, where Fruth is the only pharmacy.
“We’re the only place where you can do some shopping, get your prescriptions and so on,” Fruth said.
If it closes, people there will likely have to drive 15 minutes – if they can – to get their prescriptions filled in Athens.
However, Fruth said, the state senator representing that district seemed less worried when she told him that if Ohio Medicaid did not improve his conditions, she would be forced to close that pharmacy and another in her district.
Sen. Frank Hoagland, R-Mingo Junction, represents a district that stretches along the Ohio River from north of Steubenville to south of Pomeroy, encompassing some of the poorest communities in the state. The 17.4% of residents living in poverty exceeds the state average by 3.4 percentage points and the 16.4% on Medicaid exceeds the already high state average by half a point, according to the Center for Community Solutions.
Still, according to Fruth, Hoagland thinks it’s a bad idea for a company to serve the needs of this part of his constituency.
“I’m on the phone with him and I go through all these things and he doesn’t say much. Maybe he doesn’t believe people need Medicaid,” Fruth said, adding that then, “He said something like, ‘You shouldn’t run your business based on getting paid by Medicaid. That’s not a good business model. And I said, ‘Sen. Hoagland, frankly, that insults me.
Hoagland’s office and a spokesperson for the Senate Republican Caucus did not respond to requests for comment.
“I’ve never met anyone I had less respect for,” Fruth said of Hoagland.
As with reimbursement periods, the Medicaid department did not respond directly when asked why dispensing fees would not reach the levels reported by pharmacies in the department’s investigation.