Pharmacies feel pain of Medicaid cuts
June 25, 2008 · Updated 3:21 PM
Pharmacist Terry Thomas has had to inform all his Medicaid customers that he will not be accepting their prescriptions.
As of Aug. 1, the South Whidbey pharmacist can no longer process Medicaid prescriptions at his business, Korner Pharmacy in Clinton, because of a state cut in how much pharmacies are paid for filling Medicaid prescriptions.
This is a scenario that is being repeated all over the state of Washington and impacting thousands of people. Now, South Whidbey Medicaid patients may be faced with the dilemma of not being able to get their prescriptions filled on South Whidbey. The Washington State Department of Social and Health Services (DSHS) Medical Assistance Administration (Medicaid) hit the pharmacy community with the news that as of Aug 1, pharmacies will be paid less for providing the same prescriptions and services to Medicaid recipients.
This cut comes out of the state legislature, which is attempting to fill a $1.5 billion budget hole. The Washington State Pharmacy Association states that these cuts will cost pharmacists a total of $21.7 million, or an average of $21,379 per pharmacy a year.
The specific cuts taking effect on Aug. 1 include a reduction from 89 to 86 percent off drug manufacturers' list prices for brand name drugs and to 50 percent for generic drugs and a $4.70 dispensing fee.
Because of this, Korner Pharmacy customers are being notified they need to go elsewhere if they want their prescriptions filled. For South Whidbey residents, elsewhere is Linds Pharmacies in Freeland and Langley. For the time being Linds, the only other pharmacy on the South Whidbey, will continue to handle Medicaid prescriptions. But the question is for how long.
Adam Lind, manager of the Freeland Linds, said this week that his company could also drop out of the Medicaid game.
"We are still on the fence," Lind said Monday. "We haven't made a final decision. We may consider the possibility of stopping in one of our stores and continuing in the other."
Lind says approximately 10 percent of the prescriptions filled in the two pharmacies are for DSHS recipients.
Carol Davis of Freeland was shocked yesterday when she was informed by her pharmacist at Linds she may have to go elsewhere in a month.
"I don't drive and I know a lot of other people in my situation," Davis said. "I am dependent on having my medication every day. My pharmacist wants to help, he cares about us. But when they have to make long distance calls for authorization -- the percent they are receiving just doesn't cover expenses. This is thanks to Tim Eyman," Davis said.
The question pharmacy owners are asking is this: Can they afford to fill Medicaid prescriptions? Probably not.
If local pharmacies stop filling Medicaid prescriptions, trecipients will have to find a pharmacy that will continue to contract with the state. That could mean driving to Oak Harbor or the mainland for Medicaid recipients.
The state's decision will impact the poor, disabled and elderly. In Island County, this adds up to about 2,500 people in Island County who are active DSHS medical cases. About 951 of those are on the Southend.
"Some of those are on Healthy Options which will not be affected by the cut," said Lynn Hanson, acting administrator of the DSHS office in Oak Harbor.
Across Washington, nearly 600,000 will be affected by the decision.
On South Whidbey many of these
people are treated at the South Whidbey Community Physician's Clinic in Clinton. Dr. Haigh Fox, a physician at the clinic, said Medicare is something that should not suffer under the budget cutting axe.
"I am disappointed because it's taking away from people with the least political clout," he said. "It's easier to take from those who can't fight for their own interests."
Fox has already started transferring prescription paperwork from one pharmacy to the other on South Whidbey for his patients. He said he can see why pharmacies might want to back away from Medicaid prescriptions, since they require more paperwork and authorizations that translate into more staff time.
"They may just take this opportunity to get out of the business," Fox said.
Some of the larger drug store chains in Washington state including Rite Aid have opted out of the Medicaid business as well.
Kathy Stallman, manager of Lind's Pharmacy in Langley said some pharmacies are losing up to $7 per Medicaid prescription they fill.
"We know we lose some dollars on some prescriptions," she said.
Rod Shafer, Chief Executive Officer of the Washington State Pharmacy Association said this week that reducing Medicaid reimbursements to pharmacists does not address rising drug prices or the growing number of Medicaid recipients.
"It disproportionately penalizes those who are actually helping to reduce the overall cost of health care in the state," he said.
Dr. Patrice O'Neil of Freeland believes the state's decision is catastrophic.
"These are the people with the most needs, and if their medication isn't monitored properly, if they are not able to have it filled on time, they will have the most chance of ending up in the emergency room."
O'Neil blames the Medicaid cuts in part on a ""selfish period in the United States.
"What we need to realize is it's important to care of all segments of our society, especially the most vulnerable," she said.
Vicki Staley a case manager with Island County Senior Services says that the state may be setting up a mail order system to assist people who live in areas without pharmacy coverage.