Pharmacist Carl Savoie said his business stands to lose about $20,000 a week under new Medicaid reimbursement rules that began this week.
“I cannot stay open,” said Savoie, who owns Carl’s Thrifty Way Pharmacy, of Opelousas.
About half of his prescription drug business is through Medicaid — the government health insurance program for the poor, which largely serves children, the elderly and disabled.
Over in the rural southwest Louisiana town of Iowa, pharmacist Ricky Guidry’s computation shows he’ll get a 13 percent reduction in payments.
“Other people around the state are telling me it’s 30 to 35 percent for them,” said Guidry, whose Guidry’s Pharmacy business is 22 percent Medicaid. “We are going to have to make a decision whether we will fill Medicaid prescriptions.”
Not filling prescriptions will force people to travel to other locations or forego getting their medicine and get sick, Guidry said.
Savoie and Guidry are two of the state’s 559 independent pharmacists trying to get the Jindal administration to back off the new reimbursement methodology, developed as part of budget-cutting efforts. Guidry said a last resort would be seeking a court injunction to stop enforcement.
State Department of Health and Hospitals Secretary Bruce Greenstein said he met with representatives of the community pharmacies on Thursday after getting complaints.
“Right now we are running additional analysis,” Greenstein said Thursday. “Our goal is not to have pharmacies lose money doing business with we Medicaid. At the same time we don’t have a goal of being the richest paying of states.”
Greenstein said the changes represent a 3.5 reduction in pharmacy program spending that translates into a $32.5 million Medicaid budget savings. However, he said what type of cut individual pharmacies are exposed to depends on how they are operated. Some will experience a deeper cut and others less, he said.
Under the new policy, DHH is 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 in setting the policy and did not take into account special circumstances that exist with independent or community pharmacies.
And they are upset that they weren’t consulted on the finished product.
“We think as pharmacists we can come up with savings way more than what they want if they will listen to us,” Savoie said.
Greenstein said DHH is looking at ways to recognize higher costs to community pharmacies and taking into account that some are in critical health care access areas of the state. He said community pharmacists need to start working together to purchase drugs to keep costs down.
Louisiana Independent Pharmacies Association president Randal Johnson said the problem is now on DHH’s radar. “We finally sat down today and had a lengthy meeting. We suggested some things. They suggested some things. They need to work the math,” Johnson said.
“The economic impact of this must be considered,” Johnson said. “Some will close, but all pharmacies are going to be laying off employees.”
Savoie said Texas’ Medicaid program adopted similar changes and 40 independent pharmacies have closed since January.
The independent pharmacies did not know the impact of new emergency rules until late Tuesday, when DHH sent them a report with the average acquisition cost drug-by-drug for which they would be reimbursed. The rules became effective Wednesday.
Guidry said independent pharmacies are the hardest hit because pharmacy can be a “loss leader” for chain stores that offer a variety of other merchandise to make up for the financial hit.
One of the problems is with state participation in a pharmaceutical company rebate program which requires inclusion of expensive name-brand drugs in the Medicaid program, Guidry said. “We have to keep them in stock” and don’t get paid for the expense, he said.
“The problem is not the pharmacists. It’s the drug companies,” Savoie said.
Guidry said DHH relied on actuaries and accountants to come up with pharmacist cost in filling prescriptions which “skewed the numbers. They do not use standard accounting. I would like to see them do a true survey.”