Side Effects

Despite promised Medicaid reforms, Ohio pharmacists skeptical about 2020

Ohio pharmacists are saying that a new deal offered through the state’s largest Medicaid managed-care provider appears to be marginally better than the one that preceded it. But they say too many variables and a continuing lack of transparency leave them dubious about their prospects for the new year.

“There are still too many unknowns,” said Nnodum Iheme, whose Ziks Family Pharmacy near downtown Dayton serves a clientele in which 65% of patients are on Medicaid. He said under the new plan, the pharmacy middleman who reimburses him still will use a non-transparent process to decide how much he’s paid for the bulk of the drugs he dispenses to Medicaid patients.

It wasn’t supposed to be this way.

Independent and small-chain pharmacists had been complaining that Medicaid reimbursements were so low that many were being driven out of business, creating fears that sick or needy Ohioans would lose access to a nearby pharmacy. A Dispatch investigation and the Ohio Department of Medicaid’s own study last year showed that pharmacy middlemen were charging taxpayers hundreds of millions more for prescription drugs than they were paying pharmacies.

That prompted state officials to promise reforms that would bring greater transparency by requiring that the middlemen, known as pharmacy benefit managers, reimburse pharmacists for their drugs plus a dispensing fee. Gone were the contracts that allowed pharmacy benefit managers to operate in a black box that completely obscured how much money they passed along for drugs and how much they pocketed.

The state’s biggest Medicaid managed-care provider, Dayton-based CareSource, in April announced it was dumping its PBM, CVS Caremark, and hiring ExpressScripts in its place as part of a new, far-more-transparent system.

Many pharmacists, however, are skeptical.

Lynne Fruth, president of a pharmacy chain that has stores in West Virginia, Kentucky and southeastern Ohio, said reimbursements from Ohio Medicaid are far worse than they are in West Virginia, which has cut PBMs out of its Medicaid managed-care program. Earlier this month, Fruth was provided with the rates by which Express Scripts planned to reimburse pharmacies in the CareSource network.

“There has been a slight improvement,” she said Monday. “Yes, it’s better than what it’s been. But I don’t think it’s at a level that will save pharmacies.”

Under the new plan, Express Scripts will provide a 50-cent per-prescription dispensing fee — better than the 15 cents Express Scripts offered in June, but a far cry from the $10 the state’s own survey says pharmacies need to break even. In addition, CareSource will spend a total of up to $7 million for services such as extended patient consultations that are intended to improve patient outcomes.

But pharmacists remain skeptical because Express Scripts will retain the ability to decide the value of most drugs regardless of what pharmacies actually pay for them. Ohio’s managed-care providers have allowed PBMs to generate their own, secret “maximum-allowable cost” lists to set the amount they’ll reimburse pharmacists for multi-source generics — which account for about 85% of the volume of drugs sold.

Antonio Ciaccia of the Ohio Pharmacists Association said that provision in the contracts creates an uncertain future for Ohio pharmacists, especially those who have a high proportion of Medicaid patients.

Express Scripts is “saying, ’We’ll pay 50 cents — plus trust us,’” Ciaccia said.

Ohio officials, CareSource and Express Scripts have been reluctant to address the controversial pricing method that Medicaid PBMs have been allowed to use. CareSource continued not to address the matter this week.

“While we do not comment on specific arrangements with pharmacies, we do regularly review our pharmacy pricing to ensure it is competitive and adequate,” CareSource vice president Krista Ward said in an email.

Nor did Express Scripts, whose spokesman, Brian Henry, said, “From the beginning of our partnership, CareSource has been clear that small and independent pharmacies are valued partners; however, we will not comment on contract terms or negotiations.”

Meanwhile, the Medicaid department reports that it is close to establishing a way to distribute the $100 million that the legislature appropriated this summer to offset losses suffered by pharmacists with lots of Medicaid patients. The plan will be public early in the first quarter, spokesman Kevin Walter said.

Operating with all that uncertainty is no way to run a business, said Cuyahoga Falls pharmacist Barry Klein.

“How are we supposed to operate and make decisions when we don’t know what the future holds?” he asked.