Texas indies decry shift to Medicaid managed care

If you're an independent pharmacist trying to make ends meet in the state of Texas, good luck. A shift in the way the Lone Star State pays for Medicaid — as enacted by Texas legislature — is hammering many pharmacies, according to a June 14 report from the Texas Tribune, as reported in the New York Times. And once again, it's the independents that are feeling the hammer strikes hardest.

The source of their pain was a move three months ago by state government to shift prescription drug coverage for Medicaid patients into a managed care model. Instead of receiving drug benefits directly from the state’s Medicaid program, lower-income beneficiaries are now covered by 1-of-7 pharmacy benefit managers handling Medicaid recipients' claims, according to the Times (among the PBMs administering those claims is CVS Caremark).

State lawmakers predict the shift of Medicaid pharmacy benefits into managed care will save Texas $100 million in 2012-2013. But the transition to managed care has been a “bumpy” one, the news service reported last week, "with numerous computer errors and miscommunications between the State Health and Human Services Commission, pharmacists and the pharmacy benefit managers."

Since then, the snags that accompanied the shift to the new PBM model seem to have been largely untangled, according to the report. But the longer-term impact on hard-hit pharmacy owners remains.

Why? Pharmacies that serve Texas Medicaid recipients are now receiving "drastically reduced reimbursement rates set by the managed care plans," the Times reported, with average Medicaid dispensing fees dropping from $7.13 to $1.53 under the new plan. With some rural community indies depending on Medicaid for a huge chunk of their prescription business, the predictable result is that mom-and-pop pharmacies are, once again, the canaries in the coal mine.

Some of the canaries already have expired, according to the report. One pharmacy owner in Mission, Texas, told a Texas Tribune reporter he knows of 26 indies that "have closed or been sold to retail chains since the managed care changes."

Independent pharmacy advocates in the state argue that lawmakers could have achieved the desired savings through other means, such as encouraging more generic drug substitutions. But for some owner-operators, the damage appears to already have been done.

If you're one of them, or if you represent the PBM industry in Texas and want to talk about why the shift to managed care is a positive for the state, please share your thoughts with us. We’d like to hear from both sides.

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