John Lambert, owner of Lambert’s Pharmacy in Romney, discusses PEIA prescription reimbursement rates during a legislative committee meeting on Tuesday. Lambert said independent pharmacists are seeing unsustainable losses and might have to consider withdrawing from PEIA.
John Lambert, owner of Lambert’s Pharmacy in Romney, discusses PEIA prescription reimbursement rates during a legislative committee meeting on Tuesday. Lambert said independent pharmacists are seeing unsustainable losses and might have to consider withdrawing from PEIA.
Low prescription reimbursement rates that result in net losses have West Virginia’s independent pharmacists questioning whether they can continue to accept coverage plans through the Public Employees Insurance Agency, according to testimony this week before the Legislature.
PEIA requires policyholders to receive a 90-day supply of all maintenance medications, but smaller pharmacies post higher losses every time a prescription goes from a 30-day to a 90-day supply, John Lambert, owner and pharmacist at Lambert Drug Store in Romney, told lawmakers Tuesday.
Lambert spoke of the difficulties facing independent pharmacies during a meeting of the Legislature’s Joint Standing Committee on PEIA.
“When we go from a 30-day claim to a 90-day claim, the rates decrease and we don’t get reimbursed as well,†Lambert said. “So, consequently, claims that may be profitable or slightly under-profitable become huge losses.â€
In one quarter, Lambert said, he had to eat $7,000 in losses on a $100,000 pharmaceutical purchase. Annually, poor reimbursement results in about $30,000 worth of losses, he said.
“The question is, ‘What do we do,’ right?†Lambert said. “As independent pharmacies, we’re there to try to benefit the PEIA members and other members of our community, and to try to provide the best service possible.â€
Delegate Amy Summers, R-Taylor, said she is concerned about what the future might hold for independent pharmacies.
“Kroger, as I understand it, quit taking PEIA,†Summers said. “So, what you’re telling us is that, probably, independent pharmacies will have to contemplate that, as well, unless the rates are raised?â€
Lambert said that, unfortunately, is the situation.
“I know of some independents in my area that have done that or have been doing that for a while,†he said. “I’m starting to wonder when that’s going to be the case for me.â€
It’s not an easy decision to make, Lambert said, since the state is often the largest employer in small counties and PEIA members make up a large portion of the customer base.
“The issue then becomes, if you can’t be profitable doing it, eventually you go out of business or you make the choice to exclude those members from the services you provide,†he said.
Larger box stores have the ability to make up the losses through other retail revenue streams, Lambert said, but that’s not so easy for independent pharmacies.
“It’s just getting to the point where it’s just not sustainable anymore,†he said, “and we’re going to have to make those decisions, as we move forward, as to how long we can continue to service those PEIA members.â€
Delegate Matthew Rohrbach, R-Cabell, asked PEIA acting director Jason Haught about the potential impact the loss of pharmacies could have on network coverage.
“If we see more and more pharmacies refusing to take PEIA prescriptions, where does that put us in regard to network adequacy?†Rohrbach asked.
Kroger left Express Scripts Inc., a pharmacy benefits manager that works with PEIA, Haught said. PEIA is monitoring Express Scripts’ network coverage to ensure that it is adequate for members, he said.
“ESI still has very good network coverage with their removal from the network,†Haught said. “In the event there would be a loss of network access, PEIA would have to work with the pharmacy benefits manager to make the necessary adjustments to make that network full.â€
Rohrbach asked if there was a way to lower overall pharmaceutical costs.
“At this point with PEIA, obviously, you’ve heard that we are reimbursing as low as the current pharmacies are willing to tolerate,†Haught said. “So I don’t believe we can continue to reduce reimbursement.â€
He added that PEIA works to get the volume discounts that are available, but there aren’t many other options.
“Outside of some type of federal limit on the manner in which a manufacturer can set their list price for drugs, we are basically at the influence of the national market for drug costs,†Haught said. “Or you reduce your formulary or reduce your benefits.â€
Roger Adkins covers politics. He can be reached at 304-348-4814 or email radkins@hdmediallc.com. Follow @RadkinsWV on Twitter.
