Prescription Drugs Rolled Into Managed Care, Despite Pharmacists' Fears

Texas is expanding Medicaid managed care today to include prescription drugs, despite pharmacists' cries that the likely cuts to their reimbursement rates will be “managed care Armageddon.”

State lawmakers approved the change to save Texas money — an anticipated $100 million over the next biennium. But pharmacists fear that managed care organizations' lower reimbursement rates will drive them out of business. 

“I am totally scared to death,” Louis Rumsey, a pharmacist who owns Elam Road Pharmacy in South Dallas, told a joint committee of Texas House and Senate members on Wednesday. Rumsey, who is making plans to sell the pharmacy over the managed care changes, said 85 percent of the patients he serves are on Medicaid, and that the majority are asthmatic patients who receive specialty medication that isn’t available in most chain drug stores or other pharmacies. 

Lawmakers approved carving prescription drugs into managed care last legislative session, at the same time that they expanded managed care into many communities that didn't already have it. Under managed care, Medicaid recipients choose an insurance plan from a list of approved companies contracted by the state. The state then pays a set fee to those insurance companies for each Medicaid patient’s coverage. Metropolitan areas, such as Harris, Bexar, Dallas and Travis counties, have used managed care plans for years. The expansion extends managed care plans to 3.3 million Medicaid enrollees.

Health and Human Services Executive Commissioner Tom Suehs said that with the managed care expansion, it remains essential that every "person who needs this prescription is getting it.”

Agency spokeswoman Stephanie Goodman said health officials conducted a “readiness review” to be sure, examining the network of pharmacies that would be available under each of the managed care health plans. They found most of the pharmacies that accepted Medicaid clients before the expansion have signed up to continue serving Medicaid clients with managed care plans. “So it looks like access to drugs will still be very good," she said. 

Until today, pharmacists that accepted Medicaid clients could look up the reimbursement rates for generic drugs on the state health agency's website. Now, pharmacists must designate which if any Medicaid managed care plans they will accept. Each managed care plan has a different set of reimbursement rates, and pharmacists aren’t entirely certain what those rates will be.

Rather than accept all Medicaid clients, some pharmacists may now choose which managed care plans to accept, depending on the varying reimbursement rates. If pharmacists sign an agreement with a managed care organization, they cannot turn away any Medicaid clients with that health plan — no matter how low the reimbursement rate is for their prescription.

Opponents of the managed care change, like Brad Shields, with the Texas Federation of Drug Stores, say that as a result of lower reimbursement rates, pharmacies will trim delivery services, reduce the number of technicians and “cut costs wherever they can.” A pharmacist who has filled the same prescription for a Medicaid client for years may now be forced to send that patient away, he said.

Shields estimates that in three to six months, Rumsey’s pharmacy could be one of many to shut its doors for good. “You’ll start seeing holes in the network adequacy, and then it’s going to be too late, because certain pharmacies will probably already be closed," he said.