Over Half of Florida’s Community Pharmacies May Be Forced to Discontinue Participation in the State’s Medicaid Program
According to a recent survey of Florida independent pharmacies conducted jointly by PUTT and Small Businesses Aligned for Pharmacy Reform (SPAR), a Florida advocacy group, more than 60% of pharmacies surveyed may be forced to discontinue Medicaid if changes to the state’s current Medicaid reimbursement structure are not implemented soon.
Survey results indicated that 93% of the 123 Florida pharmacies that responded have had to turn away at least one Medicaid patient per month because the loss per prescription was too great, and almost one-third reported having to turn away 10 or more patients per month for the same reason.
Results also showed that pharmacy benefit managers (PBMs), who have publicly claimed to ‘put patients first’ throughout the COVID-19 crisis, blatantly ignored Governor DeSantis’ early refill executive order and current Florida statutes on patient medications, denying authorization to 61% of respondents’ Medicaid patients for 90-day supply pre-fills and/or refills during the pandemic.
According to the pharmacies surveyed, patient prescriptions most likely to be reimbursed at grossly below-cost levels include those for life-threatening conditions such as diabetes, HIV, mental health, and pediatric conditions - all drugs that fall into specialized, more expensive categories and create a substantially greater hardship on neighborhood pharmacies when required to dispense them at a loss.
If the results of this survey are any indicator, PBMs and their MCO counterparts are using the COVID-19 crisis as another way to reconfigure the healthcare industry into their own privatized profit machine.
The drug pricing model in a state-funded health plan needs to be transparent with rigorous oversight. Managed care can be non-transparent and deceptive, fooling taxpayers and consumers into thinking their medicine costs have somehow been contained, or “managed”. The survey shows that PBMs and MCOs are not obeying the law, are reducing patient access, and are forcing neighborhood pharmacies to lose money so they can maximize their record-breaking profits during a public health crisis.
The 50-question survey covered topics related to Florida Medicaid managed care reimbursements. Respondents were asked to describe the percentage of their business dedicated to Medicaid; average profit margin; estimated back-end and transaction fees (fees PBMs charge pharmacies to submit claims for reimbursement, appeal claims and other costs of business assigned by the PBM); effect on patients and on the future of their pharmacies.
The Florida Medicaid MCO survey can be found here.
On March 30, 2020, PUTT issued a formal letter including a 4-Point Plan to all state Boards of Pharmacy (BOP), Insurance Commissioners, and Governors in an effort to engage the use of independent pharmacies to combat COVID-19. The plan was simple, straightforward, and would allow pharmacies to relieve pressure on hospital systems while ensuring independent pharmacies remained solvent throughout the crisis.
PUTT heard back from a handful of states:
The Idaho, Kentucky, and Pennsylvania Boards of Pharmacy responded by thanking us for our suggestions and, in some cases, including additional helpful information while also deferring to their Departments of Insurance and/or Governors' offices. Minnesota's BOP Executive Director took the time to email a more detailed response of the state's efforts in our noted areas of concern both prior to, and during the COVID-19 crisis and included a PDF of documentation for reference going forward.
New Mexico's BOP response was unique in that not only did their Executive Director take the time to respond via email, she also immediately reached out to the state's independent pharmacy group requesting detailed information in the 4-Point Plan areas to determine next steps. Maine's BOP informed us that our plan has been added to their May meeting agenda. We will update members on the outcome of the meeting.
Arkansas, Ohio, Texas, and Kentucky Departments of Insurance responded via email with links to executive orders that have been issued regarding pharmacies' expanded roles during the COVID-19 crisis. Virginia's DOI penned a letter outlining (at the time) upcoming legislation that would rein in PBMs in the areas of licensure, audits, fees, and reimbursements. That legislation was subsequently signed by the Governor a week later.
The state of Washington's DOI sent the most impressive response to date. Their Deputy Insurance Commissioner's comprehensive 4-page letter addressed each of our points individually with regards to the state's emergency efforts and legislation - both in effect and upcoming - in each area. Disappointingly, Connecticut's DOI while acknowledging our communication, provided a "that's not in our jurisdiction" statement.
PUTT appreciates responding states' time and attention to our request amidst COVID-19. While responses were a mixed bag, any response is preferable to no response.
COVID-19 has exposed vulnerabilities in our country's healthcare system and is providing a unique opportunity to shine the light on how PBMs exploit the system for their own gain. Our 50-state outreach is only the beginning of our efforts. Even with a global pandemic occupying the country's thoughts, PUTT will continue to push for PBM reform.
Paraphrasing the immortal words of John Paul Jones, "(We) intend to go in harm's way ... Surrender? (We) have not yet begun to fight!"
It takes courage to call out cheaters, but independent pharmacies are showing courage in spades - and with inspiring results - as PBMs continue to shamelessly game the system to their own profiteering advantage. Below are just a few of the exciting victories we've been following and/or participating in since January 1:
Following the Florida Medicaid Analysis' jaw-dropping report of overt patient steering, specialty pharmacy abuse and PBM non-compliance with the state's Single Preferred Drug List, community pharmacists launched a series of local press conferences calling for immediate reform. Florida legislators have been gridlocked on the PBM reform issue since Rep. Jackie Toledo's HB 961, one of the state's most aggressive PBM legislation bills in years, was tabled in favor of a more neutral committee bill. Refusing to back down, independent pharmacies have scheduled press conferences at their stores over the next two weeks.
After a year-long effort to launch meaningful reforms in Wisconsin, Assemblyman Michael Schraa's AB114 PBM reform bill finally got its hearing this month - and saw the bill greatly reduced in strength just hours before the hearing. Undaunted, Wisconsin local pharmacists attended the hearing and testified with their patients, along with patient group representatives, pharmacy audit representatives, a former CVS employee and members of the public in a 6-hour hearing that stretched well into the evening. Assemb. Schraa's wife and daughter, whose treatment at the hands of PBMs prompted the bill, provided emotional testimony that left committee members asking how a bill that had garnered some 99 sponsors couldn't be passed as originally introduced. The following week, SB 100, the companion bill to AB114, had more than 4 hours of testimony from pharmacists, patients and advocates. Track AB 114 progress here.
In classic "zero to hero" fashion, Illinois went from virtually no protective legislation for patients and pharmacies two years ago to a series of new bills introduced this session by Senator Andy Manar. Proposed legislation would eliminate certain underhanded practices including below-cost reimbursements and forced mail order. Sen. Manar, a tireless champion for community pharmacy, has been working closely with independent pharmacies to bring change to a state where (for a little while at least) PBM reform seemed all but impossible.
With last year's victorious enactment of Senator Fred Mill's comprehensive SB 41 anti-PBM abuse legislation, Louisiana's independent pharmacies are now preparing for the possible topic of PSAO regulation - one the opposition's primary talking points - as the state's legislative session kicks off next month. Louisiana independent pharmacies are also keenly interested in helping their fellow independent pharmacies in other states draft and pass meaningful PBM reform legislation, with the end goal of bringing state reform momentum to the federal government.
California pharmacies are fighting back after the state Medicaid program decided to recoup millions lost to PBM spread pricing from pharmacies - the very people who reaped no benefit from spread pricing whatsoever. See our article (below) for how California Pharmacists Association is working to thwart Medi-Cal's misguided efforts.
To date more than 100 PBM legislation bills have been introduced, with more on the way. Look for updates on these and other inspiring victories in upcoming issues of this newsletter, and please contact us at firstname.lastname@example.org for more information on how these and other states are winning against PBM abuse.
Here it is, less than two weeks into the new year (new decade!) and there are already strong, positive signs in the fight for PBM reform. PUTT is making a bold prediction: 2020 is THE year!
Since January 1:
This is just the beginning. PUTT will continue to update as momentum against PBM fraud, waste and abuse continues. Look for #2020isTHEyear and post your own updates with the same hashtag. Here's to an exciting year ahead!
“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness..”. Against a backdrop as politically charged as Dickens’ A Tale of Two Cities, Congress’ latest attempt to make headway in the drug pricing debacle has resulted in two bills aimed squarely at drug manufacturers while appearing to largely overlook the now well-documented role pharmacy benefit managers (PBMs) play in escalating medication costs.
HR 3, the “Lower Drug Costs Now Act” was introduced by Speaker Nancy Pelosi with the intention of reining in rising drug prices, holding manufacturers to a price cap based on the average price of a selection of brand name medications sold to Australia, Canada, France, Germany, Japan and the United Kingdom. The bill would theoretically lower drug prices for Medicare enrollees by allowing the Centers for Medicaid and Medicare (CMS) options for negotiating pricing in line with that of other countries.
HR19, the “Lower Costs More Cures Act” introduced by Rep. Greg Walden (R-OR), also attempts to hold drug prices in check but without the government-imposed price controls. HR 19 appears to at least acknowledge certain PBM practices by including provisions calling for drug pricing transparency, a study of “pharmaceutical supply chain intermediaries and merger” and the end of “abusive spread pricing”. But like the “Pelosi Drug Bill”, it fails to address one of the central most drivers of the high prices consumers pay at the pharmacy counter: true PBM oversight and regulation.
As of last week, HR 3 has passed the House and will head next to the Senate, where it is expected to be defeated. Meanwhile the Senate Finance Committee’s “Prescription Drug Pricing Reduction Act” (the “Grassley-Wyden” bill), has been fortified to include prohibiting the PBM practice of collecting post-transaction “retroactive fees” from pharmacies, but does little to address the practice of extracting “pay to play” rebates from manufacturers in exchange for product placement on plan formularies. In its current format, the Grassley-Wyden bill is not expected to make it to the Senate floor for a vote in the near future.
Our take on the situation:
The shady, “proprietary” and “trade secret” factors that contribute to skyrocketing medication prices are a non-partisan problem that touches every American whether enrolled in Medicare, Medicaid or a private commercial health plan. By failing to directly address the well-documented profiteering tactics of a handful of Fortune 25 corporate bad actors, Congress is failing us: the small business pharmacy providers, the patients and the taxpayers.
“..It was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair … in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only,”
To be clear, we are not ungrateful. But while we commend our federal legislators for the fair start, the fact is unless they write bills and cast votes with their consciences instead of their PAC pocketbooks, nothing will change.
We need true PBM reform, an overhaul at the state and federal level that either greatly regulates or removes PBM middlemen from the healthcare equation. Anything less will only prolong the problem.
Exceptionally smart and talented people make the health benefit decisions for their Fortune 500 corporations, but it continues to surprise us how very few ever think to push back against the multitudes of underhanded PBM practices regularly reported in the business media. Unfortunately, despite evidence to the contrary, it seems the decision-makers in these super successful companies are buying into the rhetoric, absolutely confident they got the “best deal” and have the “best discounts”.
These are real-life comments from people who refuse to believe PBMs and the brokers who control the bidding would ever manipulate the RFP process and from corporate decision-makers who are in over their heads or can’t keep up with all of the antics of the ‘PBMafia’.
McKesson Corporation is a Fortune 10 healthcare company and even they were fooled. Purely by accident, it was uncovered that McKesson’s self-insured employee medical plan was utilizing prescription benefits administered by CVS/Caremark that disadvantaged McKesson’s own customers. McKesson owns a PSAO (an entity that signs the required PBM contracts for independent pharmacies), they have independent pharmacies as customers, and they completely missed the unethical tactic that was allowing CVS/Caremark to pay themselves and all other large chains substantially more than their small chain and independent pharmacy customers.
Around 6 weeks after the discrepancy was uncovered, miraculously, all McKesson customers began to be paid on par with their large chain counterparts. McKesson Corporation has never officially commented on the issue, but a fundamental change clearly happened. It’s a prime example of how the PBM machine uses every avenue possible to cheat the corporate customers they’re supposed protect, even ones in the healthcare industry.
You may be wondering how can this happen. How can employers, even those in healthcare, be so financially exploited? How do PBMs have so much power that they can readily extract so much money from the system?
Take a look at these contracts from a PBM obtained from local government entities. Contracts like these are just one of the many power plays PBMs employ. One look and you can see they’re one-sided. What do YOU think? Share your insights & comments with us!
To view the redacted contracts discussed in this article, click Here
Like an evil chess Grandmaster, PBMs are incredibly adept game players, exercising diabolical patience and foresight as they craft the long-term cons they sell as "saving money" on behalf of consumers and plan payers.
Pharmacists are well aware of the complicated tactics that make up the PBM playbook and result in unnecessary millions charged to end payers every year.
Knowing patients and end payers are being ripped off is one thing. Calling attention to the rip off is an entirely different - and extremely risky - matter. But a PUTT member pharmacist is taking a new approach: documenting the perpetuated spread pricing that occurs between the deductible and benefit phases in a patient's plan, and reminding patients they have the right to request a "receivables statement".
What is "Perpetuated Spread Pricing"?
Imagine this scenario: you're a consumer with normal prescription drug coverage through your employer. It's late January, time for your monthly medication refill. You go to your local drugstore, the pharmacist inputs the script and updates your insurance as per usual. Because you're in the deductible phase, you're charged the full copay and the PBM bills your plan at the contracted rate. You and your health plan repeat this process monthly until your deductible is met and your copay is $0.
Now imagine your coworker, a member of your same insurance plan, who takes the same medication and dosage but has met their deductible a little earlier than you. They have a $0 copay and the health plan pays the same contracted rate as before, right?
When the pharmacist inputs your co-worker's information, it returns pricing based on what should be "contract pricing" but after the deductible is met, the system automatically prices that same medication at "MAC pricing".
This behind-the-scenes switch allows PBMs to continue to charge the health plan the higher contracted rate, but reimburse the pharmacy substantially less, resulting in greater spread - and therefore increased profits - to the PBM.
When the patient is in the deductible phase, they very often pay an average of 235% more for medication that, when the deductible is met, the PBM is now indexing against MAC, and now paying itself more by charging the health plan the contracted rate and reimbursing the pharmacy for the lower-priced MAC rate.
Perpetuated spread pricing is a direct violation of the contract between the PBM and the consumer's insurance plan, especially since the medication price charged to the consumer between the deductible and benefit phases is substantially different. Unless two patients with the exact same prescription under the exact same group insurance plan come into the same pharmacy to fill their identical prescriptions at the same time, no one might ever catch on to the discrepancy.
It's convoluted consumer defrauding at its finest.
Pharmacists legally aren't allowed to disclose this level of information to consumers without risking multiple lawsuits from the PBMs and insurers. The only way for consumers to actually ensure they're not being overcharged is under new state & federal anti-gag clause legislation.
Most states have recently passed anti-gag clause legislation. This same legislation allows patients to request a receivables statement when they fill a prescription. If a consumer were to do this each time they filled their prescriptions, they could see actual prescription charges and could compare prices against what their plan says they should be charged.
The PUTT member pharmacist discovered this new level of consumer fraud because it was his plan - and one of his co-workers on the same medication - who were charged the different amounts for the same prescription. He filed a formal complaint with his state's department of insurance and was told he "wasn't considered a consumer" and therefore the complaint was thrown out.
PUTT encourages members to review your state's anti-gag clause legislation to check for the receivables statement language, and then inform patients of their right to know how much they and their health plan are being charged for their prescriptions.
In the world of healthcare, pharmacy benefit managers are no better than the playground bullies that try to take your lunch money.
Forced mail order is a perfect example. Recently PUTT has begun receiving copies of "choice requirement" emails and mailings from our members that read like a low budget suspense novel. Patient walks into their pharmacy to fill their long-term prescription, days later they receive notice from their insurance carrier's PBM that they will be required to pay the full price of the medication going forward if they don't transfer the prescription to mail order service. (cue the scary music)
Privacy rights notwithstanding, steering tactics like this one create a horrible situation where entire families and communities pay the price. It's a prime example of how PBMs care only about their bottom line, not the patients, and certainly not that patient's community. Never mind that this patient may require special assistance from their local pharmacist who knows their medical history & watches for drug interactions between their medications. Never mind that mail order medication is usually shipped to the patient from a distance and can easily be rendered ineffective in treating that patient's condition due to a lack of temperature control during transit, which could cause them to become far sicker than before. Never mind that the required 90 day supply of medication that mail order plans force to be ordered could potentially result in extra medications ending up in the wrong hands and on the wrong side of the law. Never mind that the patient's local pharmacy is the go to hub for healthcare in that particular community and that by forcing patients to use mail order instead of filling their prescriptions locally, that pharmacy could ultimately be forced to close its doors. The list of detrimental outcomes is long and ominous.
Job losses, destruction of local business, patient safety issues, illegal drug trafficking, and spoiled medication possibilities swirl like a rip tide effect around these PBM forced "choice requirements". Georgia got it right with their recent anti-steering legislation this past session, but how many more community pharmacies will fall to these over-sized healthcare bullies in other states before legislation is passed to stop the fleecing? How many more patients will become sicker - or worse - from improperly stored medication during transit? How many more prescription drugs will hit the streets due to forced ordering excess? It's time to stop the madness and bring these healthcare bullies to justice. Without PBM regulation, America's prescription drug system is doomed to continue into a downward spiral of monopoly, oligarchy, disease, and patient despair. We all deserve better.
PUTT Summit 2019 Recap: Pharmacists, Physicians & Patient Advocates Gather with State Legislators to Engage in Unfiltered Conversation to Rein in PBMs
Last month independent pharmacy owners, physicians, attorneys, activists and patient advocates from across the country gathered with state legislators at the second annual PUTT Summit for a day and a half of candid discussion on the topic of reining in PBM abuse.
Hosted this year in Austin, Texas, at the historic Driskill Hotel, participants organized in think-tank fashion to honestly assess and collaborate on forward-thinking ideas and strategies to implement in their home states.
“This year's presenters really brought the information home in an insightful and engaging manner,” said PUTT President Scott Newman. “Dr. Stephen Schondelmeyer, Dr. Joel Strom, and keynote Greg Reybold challenged us to think about the issues in new, broader ways that I’m certain will empower our collective efforts to stop PBM abuse in our home states.”
This year’s Summit included a review of Georgia’s new anti-patient steering law and a presentation by Dr. Stephen Schondelmeyer on “Key Factors Affecting Pharmacy’s Future.” The highlight of the Summit, the State Legislators Panel, featured Arkansas Rep. Jason Rapert; New York Sen. James Skoufis; Georgia Rep. David Knight; Louisiana Rep. Bernard LeBas; and Arkansas Sen. Kim Hammer.
Following the Legislative Panel, participants engaged in workshops focused on bills from New York, Louisiana, Tennessee, Oregon, Georgia and other states that had passed progressive anti-PBM abuse laws, analyzing bill language for use in their own states’ future legislation. Legislators, including former Florida Lt. Governor Jeff Kottkamp, participated in the process, lending insight on the legislative process.
Following Friday’s work session attendees were treated to a cocktail reception hosted by American Pharmacies at the exclusive Austin Club, once the city’s gala opera house, and then gathered in groups for dinner and a fun night in the heart of Austin’s downtown music district.
From the workshops to the after hours cocktails, this year's Summit was a successful combination of information and expertise sharing, networking, and innovative planning. Watch out, PBMs! We're locked, loaded, and ready for battle!
As states begin to address the heretofore unchecked practices of pharmacy benefit manager (PBMs) middlemen amidst a rash of publicity and legislation, Georgia has quietly introduced and passed legislation that could change the game for Georgia patients and serve as a model for other states looking to protect patient choice and access to care. This legislation - HB 233 by Rep. David Knight - awaits Governor Brian Kemp’s signature before passing into law May 12th.
While most state legislation, including HB 323 in Georgia, looks to rein in problematic PBM practices, Georgia’s HB 233 takes a new tact – regulating pharmacies that are owned/affiliated with PBMs and insurers through the elimination of patient steering practices.
HB 233 specifically prohibits pharmacies owned by PBMs and insurance affiliates from receiving self-dealing referrals and from engaging in data mining for commercial (non-patient care) purposes. The bill also requires pharmacies to disclose affiliates to the Board of Pharmacy and contemplates Georgia Board of Pharmacy oversight.
“Though often overshadowed by issues such as DIR fees and spread pricing, PBM-owned pharmacies have been able to engage in patient steering on the grandest of scales, to the point it has become a core business strategy,” says Georgia state representative David Knight. CVS says as much in a statement from CEO Larry Merlo in their 2017 Annual Report:
“Over time we have developed new plan designs that save our clients money while simultaneously moving share into our channels. For example, the new plan members we enrolled over the past three selling seasons will contribute an additional 40 million prescriptions to the enterprise in 2018.”
Frustratingly, PBMs often take the position that state law requiring regulation is preempted by federal law, thus limiting the scope and impact of many previously-passed state laws Yet pharmacies are subject to significant state regulation. What makes HB 233 unique -- and apparently gives PBMs pause -- is that it targets the very point at which PBMs ARE subject to state regulation - their pharmacies.
“It’s a simple yet brilliant strategy that may change the game and provide patients the broadest possible protections. For patients who have been forced into mail order or other PBM-owned pharmacies, there are few issues more important in healthcare than patient steering,” says Scott Newman, PUTT president. “Steering, whether into mail order or a PBM-owned brick-and-mortars impacts the most vulnerable patients. PUTT applauds the State of Georgia for recognizing the need to stop the practice all together.”
HB 233 had more than 90 co-sponsors and enjoyed near unanimous support. However, despite the grassroots support, the PBM lobby is currently exerting tremendous pressure in the hopes of getting a veto by May 12, which is the state deadline for Governor Kemp to veto 2019 legislation. In the meantime, the pharmacists and their patients wait, hopeful that patient mandates and steering will soon be a thing of the past.