Independent pharmacies leave military health insurance program over low reimbursement rates
TRICARE is coming under fire for its decision to renew a multibillion-dollar contract to Express Scripts to manage the U.S. military’s health care program’s pharmacy benefits.
Independent pharmacies said they’ve had to leave the program over unsustainably low reimbursement rates, while changes to the program have required some beneficiaries to receive certain medications directly through Express Scripts’ mail-order pharmacy.
The arrangement has prompted questions from lawmakers about beneficiary access to care and potentially anti-competitive practices by Express Scripts, the second-largest pharmacy benefit manager in the nation.
“I have serious concerns about how the situation looks,” Rep. Andy Biggs, R-Ariz., said in July during a House Oversight Committee hearing with executives of the three largest PBMs. “What is the justification for limiting choice in access to medication for service members?”
TRICARE, the U.S. military’s health care program, provides health care coverage to 9.6 million active duty service members, their families, National Guard and Reserve members, and military retirees. Express Scripts has managed pharmacy benefits for TRICARE since 2009 and signed an eight-year contract in 2021 worth up to $4.3 billion, with an option renewed earlier this year.
Controversy over the TRICARE pharmacy network blew up in 2022 after the new contract signed by Express Scripts, at its request, only required 35,000 pharmacies to be in-network — a reduction of 15,000 from the previous requirement. Those cuts were targeted to independent pharmacies.
Now, a few years later, independent pharmacies continue to leave the network.
“People want nothing more than to serve these patients,” Brian Hose, chief executive officer of EPIC Rx, a pharmacy services administrative organization that represented 1,100 independent pharmacies in negotiations with Express Scripts for TRICARE.
Hose said Express Scripts recently ended negotiations with the organization after it continued pushing for changes to the proposed reimbursement rates, which he said were below the cost of procuring and dispensing medications.
“They [independent pharmacies] want to be able to provide medicines to these communities. And it was challenging to walk away from TRICARE, but it was also pretty clear from how bad the contract was that reimbursement wasn’t sustainable,” Hose said. “At some point, you can’t send every prescription out the door with a five-dollar bill attached to it.”
A spokesperson with the Defense Health Agency said 42,000 pharmacies are in the TRICARE network, including 13,900 independent pharmacies.
Reimbursement rates
When a PBM can’t reach an agreement with a pharmacy services administrative organization, it often sends out contracts to the individual pharmacies that were represented by those organizations... Continue Reading
Roll Call Reporter: Jessie Hellmann
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