Legislators hear from new managed-care firms; lawmaker rates their performance with a show of hands from pharmacists

Kentucky Health News

The three companies recently hired to manage Kentucky’s Medicaid program outside the Louisville region defended themselves yesterday against complaints that they are squeezing independent pharmacies to the breaking point. One of the three firms, Kentucky Spirit, fared better in a hearing held by a House-Senate committee before a crowd that included many pharmacists.

When Sen. Vernie McGaha, R-Russell Springs, “asked for a show of hands from
pharmacists in the audience to learn which of the three
pharmacy-benefits companies they think underpay on generic drugs, nearly
everyone raised their hands for Medco Health Solutions, which is
Coventry [Cares]‘s partner, and Catalyst Rx, which is WellCare [of Kentucky]‘s. No one seemed
to object to US Script, which is Kentucky Spirit’s partner,” reports John Cheves of the Lexington Herald-Leader.

Kentucky Spirit is the only firm that continues to pay pharmacists a dispensing fee of $4.50 to $5 per prescription, the rate that had been paid by the state. WellCare pays $3, and CoventryCares $1 to $1.50, the pharmacists told Deborah Yetter of The Courier-Journal. “Pharmacists have told lawmakers at previous hearings that
pharmacy-benefits companies sometimes pay less for generic drugs than it
costs pharmacies to acquire them,” Cheves notes.

Read more here: http://www.kentucky.com/2012/02/13/2067444/medicaid-managed-care-companies.html#storylink=cpy

John Will Stacy, D-West Liberty, left, whose business interests include co-ownership of at least two pharmacies, got into it with G. William Strein, Medco’s vice
president for provider relations. “Stacy cut off Strein several times while
he was attempting to answer,” Cheves reports.

“Why is it fair that you can reimburse us below costs?” Stacy asked Strein, who “disputed Stacy’s assertion and said managed care attempts to strike a balance between its estimated cost of the drug and the costs of the pharmacy to buy and dispense it,” Yetter reports. “But that claim was disputed by some of the roughly 30 pharmacists at the hearing who operate independent drugstores. Though the hearing ended before they got a chance to testify, several said afterward that they intended to keep making their case before lawmakers.”

Jason Wallace, owner of Grant County Drugs, told Yetter, “It’s a real burden for Kentucky pharmacists. That’s why I’m here.” All the companies told members of the Joint Program Review and Investigations Subcommittee that they are committed to resolving the problems.

“Much of Monday’s testimony was devoted to the complex pricing formula known as the maximum allowable cost, or MAC, that managed care companies consider proprietary,” Yetter writes. “Under the Medicaid plan before managed care, the formula was provided to pharmacists, who said they knew what they would be paid. Now, they said, they don’t find out what a company will pay for a specific drug until they file claims.

And too often, they say, it’s less than they paid to buy the drug.

“How would you like to go to a gas station and fill your car up with gas and then be told what the charge is?” Breckinridge County pharmacist Jonathan Van Lahr asked after the hearing. (Read more)

Kentucky Health News is a service of the Institute for Rural Journalism and Community Issues, based in the School of Journalism and Telecommunications at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

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