Local pharmacy owners say a dramatic decrease in reimbursements from Medicaid managed care plans is threatening to put them out of business.
At Sidney Hometown Pharmacy — where the technicians wish customers “Happy Birthday” and photos of employees’ families are on display next to diabetic supplies and cold medicine — owner Bob Curlis said he may have to stop accepting Medicaid customers as early as next year if the reimbursements don’t turn around.
Medicaid customers make up about 14 percent of his business, but he’s currently taking a loss on many of those prescriptions because the managed care plans are reimbursing him less than the cost of the drug, he says. In other cases, the cost of the drug is just barely covered but with no additional dispensing fee to cover his administrative or packaging costs.
So far in August he’s lost money on nearly 100 transactions with CareSource — the largest managed care plan in Ohio that serves about half of Medcaid patients. A drug that costs the pharmacy $50 will be reimbursed at $38, he said; another drug that costs $1.62 gets reimbursed at $1.36.
“Even if I got that drug for free from my wholesaler… you still can’t operate on $1.36 profit,” Curlis said. “That doesn’t pay for the preparation of it, let alone my taxes or keeping my lights on.”
The state contracts with five managed care plans to administer Medcaid: Buckeye Community Health Plan, Molina Healthcare of Ohio, UnitedHealthcare Community Plan, Paramount Advantage, and CareSource, which has its national headquarters in downtown Dayton.
Four out of the five plans use CVS Caremark as their pharmacy benefit manager to contract with pharmacies and set reimbursment rates.
The managed care plans that responded to requests for comment said reimbursements are agreed upon in that contract. If the reimbursements are being lowered, it’s to maximize cost savings for taxpayers, they said.
But the pharmacists we spoke with said they can’t get any explanation on why their reimbursements are suddenly declining while Medicaid spending on prescriptions is up.
Ohio Medicaid spent $3.36 billion on prescription drugs in fiscal year 2016 and projections show the state will likely spend $3.9 billion for fiscal year 2018.
“Since 2015, CareSource hasn’t received less money to administer the program, and that’s what’s telling to me,” Curlis said. “If you haven’t received less money, and you’re paying me 57 percent less, where is that money going?”
In an email, CareSource’s Jim Gartner, vice president of pharmacy, said pharmacists are aware of pricing structures and sign contracts based on what has been negotiated.
“As a nonprofit health plan, we are uniquely committed to the well-being of those we serve and 94 percent of our revenue is spent on our members’ care,” Gartner said in the statement.