Community pharmacists remained upset Monday about Medicaid reimbursement changes, which they claim that even in an altered form would lead to financial losses and jeopardize their ability to remain open.
The state’s health chief said last week that revisions made in response to pharmacies’ complaints should quell the backlash.
But it didn’t happen, with Louisiana Independent Pharmacies Association President Randal Johnson dubbing as “horrible” the amended plan that begins Thursday. 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.
State Department of Health and Hospitals Secretary Bruce Greenstein disputed the pharmacies’ claim 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 a 3 percent,” Greenstein said.
Greenstein said 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.
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.
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.
Johnson said the community pharmacies want to work with DHH but “we have got to question this untested, untried average acquisition cost methodology ... It’s like building a house on a bad foundation.”
“We have got to continue to plead with the department to recognize the actual numbers” for purchase of prescription drugs, Johnson said.