Alterations to the DHH’s changes have been made, and still, pharmacies can only scratch their heads and try to figure out what they can do to make sure they do not suffer huge financial losses and keep their doors open.
“It’s almost like ‘What can we do’,” said Brandy Freed, owner of The Medicine Shoppe in Crowley. “We have to roll with the punches.
“All you can do right now is try to increase business to try and make up for it. That’s what we’re doing.”
The state’s health chief said last week that revisions made in response to pharmacies’ complaints should quell the backlash.
They didn’t. Instead, it seems the changes themselves are “horrible” as Louisiana Independent Pharmacies Association President Randal Johnson dubbed the amended plan that began Thursday, Nov. 1. The roughly 500 members of the association are not affiliated with the big chain store pharmacies.
“What we are seeing is where it was a 19 percent cut, it’s rolled back to about a 16.5 percent cut,” Johnson said.
The average net income of community pharmacies is 2.9 percent, he said.
Johnson said the Medicaid cut creates a deep financial hole for the pharmacies, threatening their ability to stay open to serve all customers, not just those on Medicaid.
But the DHH disputes Johnson and the pharmacies’ claims of the extent of the cut.
“We don’t see that in our data. We think it is overstated. We are looking at in the ballpark of 3 percent,” said State Department of Health and Hospitals Secretary Bruce Greenstein.
He added that the agency will continue to monitor claims payments to see if the impact is greater than anticipated. The extent of the cut will depend on each pharmacy’s volume of Medicaid business, he said.
That isn’t news to Freed and The Medicine Shoppe, which estimates that 40 percent of its customers are Medicaid, but she knows the effects will be more than a 3 percent change.
“It’s definitely going to keep affecting us,” said Freed. “For a pharmacy that is like 15 to 20 percent Medicaid, its one thing, but for us sitting at about 40 percent, it really hurts.”
The community pharmacists strongly opposed new reimbursement rules that went into effect in early September that changed the basis on which they would be reimbursed for prescription drugs they purchase. Now, the group is opposing altered rules aimed at quieting the opposition.
The pharmacists and their legislative allies claimed that cuts associated with the changes would yield far more than the $32.5 million Medicaid budget savings projected.
For the past two months, DHH has been reimbursing for the average acquisition cost plus $10.13 per prescription. The independent pharmacists said they have to pay far more than the average cost that DHH has affixed to the drugs included in the program.
The pharmacists said officials relied on bad information from their financial advisers in setting the policy as well as average acquisition costs of drugs.
In response, DHH altered the new reimbursement rules effective Thursday providing for a markup of 10 percent on the average acquisition cost for generic drugs and 1 percent markup for brand name generics.
The dispensing fee paid will increase from $10.13 to $10.51 per prescription to cover more costs, but that 38 cent change is not enough according to the pharmacies.
In addition, certain classes of specialty drugs which are more expensive and complex to stock and dispense than mass-market prescription drugs will be reimbursed on the higher average wholesale cost price plus 5 percent.
Since the beginning, community pharmacies have urged cooperation with the DHH in the changes, wanting to work with them to make sure changes were in the best interest of both parties, but according to Johnson the questions remain.
“We have got to question this untested, untried average acquisition cost methodology ... It’s like building a house on a bad foundation,” he said.