Independent pharmacies that serve Medicaid and Medicare patients in small communities in Illinois will soon start receiving additional payments from the state.
More than 70 independent pharmacies in largely rural and downstate communities will benefit from $4.7 million, including Metropolis Drugs II in Metropolis.
The Department of Healthcare and Family Services confirmed June 24 it has begun implementing a program lawmakers established in 2018 known as the Critical Access Care Pharmacy Program, which provides up to $10 million a year in additional reimbursements for independent, brick and mortar pharmacies located in counties with fewer than 50,000 people.
Under the program, qualifying pharmacies receive quarterly payments from the state, based on the number of prescriptions they fill, which are reimbursed by the state's Medicaid/Medicare program.
The legislature created the critical access pharmacy program (Public Act 100-587; HB 3342) with the intention of providing funds for the sustainability of independent pharmacies negatively impacted by reimbursement rates through the state's managed care program.
The new managed care program started April 1, 2018 for Illinois State Medicaid. The financial crisis local pharmacies were facing intensified after April 1, when the former Gov. Bruce Rauner administration expanded the Medicaid managed care program to every county in Illinois. Adding to the pressure were rate cuts administered by pharmacy benefit managers (PBM).
This spring, Illinois State Sen. Andy Manar, a Democrat from Bunker Hill and chairman of the key Senate budget committee, pressed for renewed appropriations for the Critical Access Pharmacy program after the previous governor failed to get it off the ground.
"A local pharmacy does more than merely serve customers. For people who lack transportation or live with limited mobility, it can mean the difference between comfort and hardship. Several independent pharmacies around the state have closed and numerous others are imperiled because of spread pricing and the relationship between PBMs and the managed care program," said Manar.
He added, "It troubles me to see these small business owners being squeezed out because of state policies they had no control over and, in many cases, they are losing money on the prescriptions they fill. Every time a rural pharmacy closes its doors, communities lose access to health care, jobs and economic activity. Establishing this program is the right thing to do."
Tim Lawson, Metropolis Drugs II owner, is certainly excited the state has released the funds to aid pharmacies such as his -- which Metropolis Drugs II is scheduled to receive $69,802 -- but explains this money that was in the 2017 budget contracts for services will help bring his pharmacy more onto the same playing field as the big pharmacy corporations, and Medicaid manage care claims will not be in the red, which has happened since spring 2018.
"I provide services everyday that Medicaid and Medicare Part D manage care programs does not compensate us for, from free delivery of prescriptions to homebound patients to free plan reviews on many pharmacy customers, and we provide valuable medication therapy management to patients daily," said Lawson. "As a business owner, I have to look at ways to keep our doors open. I have a lot of expenses, such as payroll, but I care about the people in this community. I have to look at everything across the board, I look at all of our numbers -- we live in a small, demographic market, and we have been blessed to be able to compete with the chains on cost. However, I have to look at cost analysis on how many customers are private pay, how many are cash pay, and so on."
When Critical Access Pharmacy program was first announced, Lawson registered for the program due to the amount of coverage he provides to Medicaid patients and how the Prescription Benefit Management (PBM) companies, such as Caremark, Meridian and Blue Cross, were squeezing the pharmacy's profit margins.
"In the past, the state funded all Medicaid programs. In April 2018, they moved from a traditional Medicaid service to a contracted managed care system," explained Lawson. "Before the federal government started the Medicare Part D program in 2006, 28 percent of my business was state-affiliated; however, with this new federal program, 10 percent of those patients, being dual eligible, were moved from the state to the federal level as part of the Medicare Part D program, leaving 19 percent of our business being funded by the state. These federal programs and a majority of state programs are all managed by PBMs.
"And Illinois then moved to a managed care program with various insurance companies and PBMs managing the prescriptions for the state, including Blue Cross, Harmony, IlliniCare, Meridian and Molina.
"As of now, we only have 2 to 3 percent of our business being covered under traditional Medicaid contracts, and 17 percent being covered under some type of managed care program, each expecting a pharmacy to fill a prescription at a rate they set," stated Lawson. "A lot of people do not understand what goes on behind the scenes with manage care Medicaid, Medicare Part D and how DIR (Direct and Indirect Remuneration) fees providers must pay, which affects patient prices, services and puts pressure on providers.
"People really need to educate themselves and speak to representatives and senators," said Lawson.
With the funds Metropolis Drugs II will receive, beside bringing the business back into the black, Lawson hopes to enact future services to his customers, including providing free seminars to Medicare and Medicaid recipients, educate area residents by offering "brown bag" programs at such places at Happy Hearts Nutrition Site and incorporate a full-line of compounding prescriptions.
"We just want to continue to provide services for our patients," added Lawson.
Illinois Comptroller Susana Mendoza echoes Lawson belief there should be more transparency and accountability within the state's managed care program.
"Small rural pharmacies - often the only pharmacies available for miles and miles - are being driven out of business all over Illinois because of unfair competition and state policies. It is important that we step in to help these frontline health care providers stay in business so that they can continue to be there for residents in underserved areas of the state," concluded Mendoza.