Medicaid drug reforms have been underway for months. But as pharmacists await contracts for the coming year, some see signs that reimbursements will get even smaller, putting more small-town drugstores in jeopardy.
After nearly a year of promises of reform by Medicaid officials, some Ohio pharmacists fear that they’re headed into contracts that will make their situation worse, not better. That’s a development that could force even more pharmacies to close and further restrict Ohioans’ ability to quickly see a health professional.
The Ohio Department of Medicaid and its largest managed-care provider, Dayton-based CareSource, have been promising a new contract to pharmacies that would not only at least maintain the reimbursements they’ve been receiving but also pay them extra for services such as consulting with patients.
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“Reinventing a system is not easy work, and there is a lot of misinformation out there,” Stephen Ringel, CareSource’s Ohio market president, said in an email Wednesday. “CareSource continues to work to ensure our pharmacy partners understand their new contracts.”
But with a new contract year only a month away, most Ohio pharmacists have yet to see the new deal and their reimbursement levels that start in January — and at least one pharmacy chain has been told it won’t.
“There is no new contract,” said Andy Becker, director of administration for Fruth Pharmacy, which owns 10 pharmacies in southeastern Ohio plus 19 in West Virginia and one in Kentucky. “They told us they’re rolling us into a network. There is no new agreement or network.”
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Becker was referring to Express Scripts, the pharmacy middleman that CareSource announced in April it was hiring to help implement the sweeping changes it envisioned. The revamp was announced after a state-commissioned report showed that in one year, CareSource’s existing middleman — CVS Caremark — billed taxpayers $114 million more for drugs than it paid the pharmacists who dispensed them.
Express Scripts, which determines pharmacy reimbursements, sent out a proposed contract in June that had tiny dispensing fees for pharmacists, only to withdraw it days later after loud protests from Ohio pharmacists. In November, Becker said, the company told him it was simply rolling pharmacies that serve CareSource patients into an existing pharmacy network — one that pays even less than the previous CareSource network did, Becker said.
Express Scripts didn’t respond to a request to comment for this story.
In an interview Wednesday, Ohio Medicaid Director Maureen Corcoran said pharmacies serving CareSource’s 1.2 million Ohio clients eventually will be offered new contracts, as the managed-care plan had promised. But she couldn’t say when pharmacies can expect to see them.
“CareSource can go through the specific timeline with you,” she said.
However, the managed-care outfit did not.
Becker estimated that Fruth’s Ohio pharmacies already are losing between $150,000 and $200,000 a month serving Medicaid patients, and under the new deal, he said, that would get worse. Fruth has shut down a pharmacy in Nelsonville due to financial struggles.
Many other small-chain and independent pharmacies have joined in complaining that inadequate reimbursements from Medicaid have made it difficult to hang on. Some have closed, leaving transportation-challenged beneficiaries facing long drives to the nearest pharmacy.
The state budget passed in the summer included $100 million to help stabilize pharmacies that have a large Medicaid clientele. The appropriation came with a goal of starting distribution of the money on Jan. 1, but Corcoran said the Medicaid department is still figuring out how to disburse the money, and she couldn’t say when that will happen.
The Medicaid department implemented a pass-through pricing model last year that was intended to bring transparency to pharmacy reimbursements. The new method requires pharmacy benefit managers to bill the state the same amount they pay pharmacies, and it pays them a fixed administrative fee.
A state-funded analysis this fall showed that reimbursements had improved somewhat, but other problems remained. And Medicaid officials acknowledged that they didn’t know whether reimbursement rates are sufficient because they don’t know how much pharmacies pay for the medications.
When the pass-through system was developed during the Kasich administration, a department spokesman said it was aimed at creating “fair and sustainable pricing for the providers, including pharmacists.” But on Wednesday, Corcoran said: “It doesn’t solve every problem.”
There is broad agreement that the CareSource idea of paying pharmacists to spend time consulting with patients and checking their medicines will benefit patients’ health and save taxpayers money. Making sure that someone who is, say, diabetic, is stable and taking the right medicine can keep that person out of an emergency room or hospital and save the state money in the long run.
In fact, medication-related problems in 2016 cost $528 billion, or 16 percent of U.S. health expenses, Vassilios Papadopoulos, dean of the School of Pharmacy at the University of Southern California, wrote in a Morning Consult column in November.
But Ohio pharmacists say that unless Ohio’s Medicaid reimbursements improve, many of them won’t be able to see patients at all.
“Nothing’s gotten better,” Becker said. “In fact, it’s getting worse.”
mschladen@dispatch.com
@martyschladen