If your pharmacist doesn’t look happy to see you the next time you visit, it’s probably because she’s losing money filling your prescription.
The problems are occurring with two groups of patients. The largest are those covered by Arkansas Works, which uses Medicaid dollars to purchase private health insurance for 285,000 low-income Arkansans. The other problem patients are the 68,100 Arkansans who purchase their health insurance through the online Arkansas Health Insurance Marketplace. Like Arkansas Works, the Marketplace was created by the Affordable Care Act, otherwise known as Obamacare.
Pharmacists say that, in those plans, they aren’t being fairly reimbursed by their pharmacy benefit managers. Those PBMs act as middlemen between pharmacists and insurance companies, which in Arkansas are Blue Cross, Ambetter and QualChoice.
If you’re thinking that insurance companies are supposed to be the middlemen, well, so did I. But as big as the insurers are, they’re not as big as the three PBMs that control the pharmaceutical market nationwide. The insurance companies pay the PBMs, and the PBMs reimburse the pharmacists while subtracting what’s supposed to be an administrative fee. That’s how your pharmacist gets paid.
The PBM that contracts with Blue Cross and Ambetter is CVS Caremark – the same CVS that owns your local drugstore and is buying Aetna, one of the nation’s largest insurers. A spokesperson released a statement saying it reimburses pharmacies at “competitive rates that balance the need to fairly compensate pharmacies while providing a cost-effective benefit for our clients.”
More than 300 pharmacists attended a legislative subcommittee meeting last week to voice their disagreement with that assertion. Earle pharmacist Cissy Clark said more than 22 percent of her prescriptions are for Arkansas Works patients, and she’s losing money on a “large portion.” She said one pregnant mother and her two sick children came into her pharmacy with three prescriptions for generic Tamiflu, which costs Clark $87 wholesale. The children were covered by traditional Medicaid with a reasonable reimbursement. For the mother, Clark was going to be reimbursed $36.23 by CVS Caremark. When Clark called Ambetter, she was told the insurer had paid $132.61 to the PBM, “which means that CVS made almost $100 while I lost 50,” Clark said. She eventually managed to work it out by filling a liquid version of the prescription and received a fair reimbursement.
In one sense, the system did its job by moving the mother to a lower cost drug. But that was an awful lot of running around to do for any business transaction – particularly a pharmacist trying to serve a family with sick kids. And there should be no situation in a market economy where the middleman takes that big of a cut.
State law does require the PBMs to allow pharmacists to appeal their reimbursements and ultimately have their costs covered. But of course, that means your busy, white-coated pharmacist has to go to war with a giant bureaucracy. Clark said she filed 65 appeals in the first week of this year alone and had not received any responses.
Arkansas Works and the Health Insurance Marketplace both were created by Obamacare, but the problems run much deeper. In America, health care is a profit-making enterprise, but it’s based on perverse incentives where the sellers make more money managing our illness than they do if they make us well. The payment system is a complex web of insurance companies, PBMs, big government agencies and other faceless middlemen. Their job is to shield us from the cost of our transactions. For that, they take a huge piece of the pie. Then there’s the fact that Americans have fundamentally unhealthy lifestyles. Being unhealthy is expensive.
Repeal the law, and the underlying issues will remain.
So what now? Pharmacy reimbursements will continue to be an issue in Arkansas politics. Nationally, Congress will continue to talk about health care but do little about it.
Last week, Amazon, Berkshire Hathaway and JPMorgan Chase announced they were jointly forming a new health care company to serve their employees. They didn’t offer many details because they don’t know what the company will look like. But it will be different.
Can these big businesses fix the big business of health care? At least, they can disrupt it. CVS’ stock fell 4.9 percent after the announcement.
Regardless, it’s going to take a while, and pharmacists are losing money now – or at least waiting on appeals.
Steve Brawner is a syndicated columnist in Arkansas. Email him at email@example.com. Follow him on Twitter at @stevebrawner.