ALBANY- Independent pharmacies are sounding the alarm after hearing that the state budget, scheduled to be released this Saturday, could contain provisions that delay or modify a fee-for-service plan currently scheduled to take effect on the same day. The potential change would have a substantial financial impact on independent pharmacies.
Passed in 2020, the Medicaid Pharmacy Program, NYRx, is slated to replace the current managed care system on April 1st. Independent pharmacists have been waiting more than two years for the fee-for-service provision, which was the norm for Medicaid reimbursement before the managed care system began.
Under the fee-for-service model, all corporate and independent pharmacies would be paid the same amount for drugs disbursed to New Yorkers on Medicaid. Nearly 8 million New Yorkers are covered by Medicaid, and for the typical independent pharmacy, this represents more than 30% of their total customers.
Under the current 340B Medicaid Managed Care Program, independent pharmacists are paid an average reimbursement of about 50 cents per prescription. Pharmacist Al Squitieri, owner of Neighborx Pharmacy in Slate Hill calls this “unsustainable”.
The fee-for-service provision would level the playing field, says Squitieri. Under the managed care model, Pharmacy Benefit Managers (PBMs) serve as a middleman and negotiate drug prices on behalf of insurance companies, giving them significant control over pharmacy reimbursement. These middlemen use their negotiating power to offer more competitive pricing to large pharmacy chains, often forcing independent pharmacies to fill prescriptions at much lower costs. In many cases, the PBMs also operate retail pharmacies like CVS, Optum, and Express Scripts as well. Independent pharmacists say these PBMs are not properly monitored by the state.
State Senator James Skoufis supports the fee-for-service model and has been the primary sponsor of the legislation for several years. He is working to see that the new reimbursement model is implemented on April 1st as scheduled. His stand-alone bill would guarantee a fee-for-service model to small pharmacies. Skoufis says his bill would “Address unfair and unsustainable practices by managed care providers and pharmacy benefit managers (PBMs) to protect patient access to essential pharmacy care and services.”
Skofuis’ past efforts to assist independent pharmacies had been vetoed before by both former Governor Cuomo and Governor Hochul, despite passing both houses of the legislature with near-unanimous consent. “For too long, our independent pharmacies have been asked to do the impossible: provide life-saving treatment for their neighbors while they themselves struggle to stay alive. We can’t afford to watch more of our mom-and-pop pharmacies close up shop. I’ll keep fighting alongside colleagues on both sides of the aisle to ensure our independent pharmacies get their fair share in this year’s budget.”
Squitieri fears that if fee-for-service isn’t implemented as scheduled, more independent pharmacies may close. “Right in Orange County, several pharmacies have shut down already, and I’m concerned there will be more,” he said. Squitieri noted that the closure of pharmacies, particularly in rural areas, would create healthcare deserts.
Pharmacist Mark Freitas, owner of the Washingtonville Pharmacy said local pharmacies played an important role during the pandemic, and still do. “The local pharmacist is the front-line healthcare professional in the community,” said Freitas. “During the pandemic, and after, we were administering vaccines and conducting rapid testing. If nothing changes for us, there are a lot of pharmacies that won’t be able to hang on.”
Patrons of independent pharmacies, like Jenelle Vellenga of Slate Hill, said they rely on the service local pharmacists like Squitieri provide. “I love having the pharmacy, and so many of us rely on Al,” she said.
Mid-Hudson News video footage with local, independent pharmacists who are at risk of suffering more at the hands of state lawmakers:
