Archive for Saturday, April 22, 2006

Drug plan a burden, pharmacies report

April 22, 2006


Round Corner Drug Store pharmacist Tom Wilcox filled a prescription last week for one of his Medicare Part D customers.

It cost him $178.

He later learned the customer's drug plan, Humana, planned on paying him $178.54.

"I called Humana and said there had to be a mistake - you can't expect a pharmacy to fill a $178 prescription for 54 cents," said Wilcox, who has filled prescriptions at Round Corner, 801 Mass., for the last 21 years.

"They checked and said, no, that was correct," he said. "When I said that's crazy, they said I shouldn't have signed on if I didn't like it."

But Wilcox said he didn't have much choice. Most of his Medicare Part D customers signed up with Humana because its premiums were by far the lowest: less than $10 a month. The others are charging between $20 and $30.

"Most people went with Humana, definitely," he said.

Wilcox is far from alone in his complaints. Independent pharmacists across the city and state say all but one of the new Medicare Part D plans are designed to steer their customers toward large, chain-owned pharmacies that rely on volume to hold down prices. Independent pharmacies, they said, rely less on volume, more on customer loyalty.

They say some independent pharmacies - many, perhaps - are likely to be forced out of business.

"Over the years, I've seen a lot things come and go. We used to have two or three pharmacies downtown (Lawrence); now there's one," Wilcox said. "But what's on the horizon now is really scary."

Mark Smith, pharmacist at Orchards Drug, 1410 Kasold Drive, doesn't have many good things to say about the Medicare rates, either.

"What they're paying doesn't cover our costs," Smith said, noting that he has filled several prescriptions for Humana customers for $2 and $3 apiece, while pharmacies generally need to make $9 to $10 a prescription to turn a profit.

"You can't sell prescriptions for $2 and stay in business," he said.

If Humana's reimbursements don't improve, Smith said, he'll begin advising his customers that he won't accept Humana in 2007.

It's a widespread problem, officials say.

"The independents are being squeezed by reimbursements that are below cost," said John Kiefhaber, executive director at the Kansas Pharmacists Assn.

Humana and UnitedHealth Group are two of the nation's largest Medicare Part D providers. They're aligned with Wal-Mart and Walgreens, respectively.

Mary Sellers, a spokeswoman for Humana, said the company's rates were reviewed and approved by the federal Centers for Medicare and Medicaid Services. She said the rates were competitive.

"If they (independent pharmacies) don't want to be part of the network, that's fine," she said. "Their role won't go away. If that's what they think, it's an overblown concern."

Not so, Wilcox said.

"When we first opened, we were 20 percent insurance, 80 percent cash," he said. "Now, we're 20 percent cash, 80 percent insurance. Medicare and Medicaid make up a big part of that 80 percent."


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