Cuts in reimbursements for drugs provided to Arkansas Blue Cross and Blue Shield customers, including Arkansas Works enrollees, are threatening to put drugstores out of business, pharmacists told lawmakers Wednesday.
They spoke at a meeting of the Arkansas Health Insurance Marketplace Oversight Subcommittee before an overflow audience of pharmacists, pharmacy students and others at the Multi-Agency Complex near the state Capitol.
Cissy Clark, owner of Clark's Family Pharmacy in Earle, said about 22 percent of the prescriptions she fills are for Arkansas Works enrollees, and she is "losing money on a large portion of those."
"Anyone who owns a business knows this is a catastrophic event," Clark said.
At issue is a pricing model that took effect Jan. 1 under Arkansas Blue Cross and Blue Shield's contract with its pharmacy benefit manager, CVS Caremark.
Scott Pace, chief executive of the Arkansas Pharmacists Association, said CVS Caremark began paying "dramatically below" pharmacies' costs for generic drugs.
For instance, he said chain pharmacies have been reimbursed an average of $4 per prescription below what they pay wholesalers.
One pharmacy in Blytheville reported that CVS Caremark has reimbursed it below cost for 58 percent of its generic prescriptions in January, compared with 3 percent in December, he said.
At the same time, he said, CVS Caremark in some cases is charging Arkansas Blue Cross and Blue Shield much more than what it pays the pharmacies, Pace said.
That violates a 2009 state law prohibiting pharmacy benefit managers from making a profit, beyond an administrative fee, on the reimbursement provided by state-funded health plans, he said.
Arkansas Works plans offered by St. Louis-based Centene also use CVS Caremark as a pharmacy benefits manager, and Little Rock-based QualChoice, which uses OptumRx, had already been paying pharmacies similarly low reimbursement rates, Pace said.
But he said the cuts in reimbursement for Arkansas Blue Cross and Shield plans have had a larger impact because the plans cover more people.
"This is a crisis, and it's not just a crisis that's affecting independent pharmacies," Pace said. "It's also a crisis that's affecting chains."
Arkansas Blue Cross and Blue Shield spokesman Max Greenwood said the company was responding to pressure from the state to hold down premiums.
Before Jan. 1, the company paid the pharmacy "claims cost" plus an administration fee, which was more than what other insurers were paying, she said.
"Our members had been subsidizing the marketplace, putting us at a disadvantage," she said.
The company has also adopted a new contract with CVS Caremark to hold down costs for employer-sponsored plans.
The insurer doesn't know what CVS Caremark pays pharmacies and is looking into pharmacists' complaints, she said.
Domenico Gugliuzza, vice president of finance and analytics for CVS Caremark, said the company loses money on some prescriptions and makes a profit on others.
Of the claims it has paid to pharmacies in Arkansas so far this year, the company made a profit on 18 percent, lost money on 9 percent and broke even on the rest, he said.
The committee approved a motion by Sen. Bill Sample, R-Hot Springs, to ask CVS Caremark to send representatives "that can answer our questions and are capable of making decisions" to meet with the committee as soon as possible.
Under Arkansas Works, the state uses state and federal funds to pay for coverage in private plans for people who became eligible for Medicaid under the expansion of the program that took effect in 2014.
More than 285,000 people were covered under the expanded Medicaid program as of Jan. 1.
The same plans, with federal subsidies for low-income consumers, are also available through healthcare.gov to people who don't qualify for Medicaid.
Pace suggested transferring the pharmacy benefit for Arkansas Works enrollees from the private plans to the traditional, fee-for-service Medicaid program or using the Medicaid program's rates as a "floor" for the private plans' rates.
Pharmacists also want laws on pharmacy benefit managers to be enforced and for the state to adopt more regulations, he said.
"It's time for Arkansas to lead the nation in comprehensive oversight of the pharmacy benefit managers," Pace said.
Senate President Pro Tempre Jonathan Dismang, R-Searcy, an architect of the program that became Arkansas Works, said he hopes that the pharmacists, insurers and pharmacy benefit managers can resolve the issue without the need for new legislation or rules.
"For everyone involved, it's best for the Legislature to not be involved," he said.
“This is a crisis, and it’s not just a crisis that’s affecting independent pharmacies. It’s also a crisis that’s affecting chains,” Scott Pace, chief executive of the Arkansas Pharmacists Association, told the Arkansas Health Insurance Marketplace Oversight Subcommittee at its meeting Wednesday.
A Section on 02/01/2018
Print Headline: Drug-insurance trims too deep, pharmacies say