Already hurt by other recent changes to federal health policies, pharmacists in Denver said they could be forced out of business if a new Bush administration plan is approved to change how Medicaid pays for drugs.
Bush administration officials want to lower the payments made to pharmacies across the country as a way to save an estimated $8.4 billion in the next five years on Medicaid, a federal health program for more than 50 million low-income patients across the country.
The new law is subject to a 60-day comment period. The Medicaid law is expected to affect costs and reimbursements to pharmacists on about 600 drugs.
“We’re already ready to close down the pharmacy. We can’t afford to fill these prescriptions,” said Joanne Thon, pharmacist- owner of Iliff Healthcare Pharmacy in Aurora. “We’re losing money. They don’t even pay us the cost of the drugs.”
Even before the new Medicaid plan was announced Monday, Thon had started sending some Medicaid customers to other pharmacies based on a separate federal health policy change that went into effect in November. Under that rule, which converted elderly Medicaid recipients to a Medicare drug plan, Thon’s pharmacy gets back only 75 percent of the cost of certain drugs it dispenses.
“They’re making all of these little independent pharmacies go away. Even big corporations – I don’t know how long they can last losing money like that,” Thon said.
Even if independent pharmacies manage to stay in business, they’ll probably stop taking Medicaid patients as customers, said Robin Hyman, the pharmacist owner of Aurora Community Pharmacy.
“Welcome to the politics of insurance companies ruling the world,” Hyman said.
The proposed change aims to force drug companies to provide the same price discounts to Medicaid as they provide to large customers in the private market. The Washington Post reported that congressional investigators discovered that Medicaid pays 35 percent more for some commonly used brand-name drugs than the lowest price available to private companies.
Right now, the federal reimbursement rate is pretty much in line with insurance companies, said John Urrutia, pharmacist and owner at Union Square Pharmacy in Lakewood. He estimates about 20 percent of his business comes from Medicaid patients, many of them children referred by a nearby pediatrician. The changes could include a cut in a $3-to-$4 dispensing fee, which is where Urrutia said he could get squeezed.
The National Community Pharmacists Association wants to make sure the dispensing fee doesn’t go away under the new proposal, said Carol Cooke, a spokeswoman for the group, which has more than 24,000 members nationwide, including scores in Colorado.
“About 30 percent of our members said they would consider going out of business because of this,” Cooke said.
The trade group predicts the new plan could end up costing the government more money, because it means Medicaid patients will be more likely to make visits to the emergency room and to doctors if they can’t get the medications they need.
State officials are not sure whether the new plan would save money or cost money, said Ginny Brown, a spokeswoman for the state Department of Health Care Policy and Financing.
Officials certainly don’t want to put independent pharmacies out of business, she said. “We still need to do a lot more analysis. It’s all up in the air right now.”
