A new health care contract for state workers that took effect this month has led to 72 independent pharmacies opting out of the network, forcing more than 5,000 Louisianans to look for other pharmacies to get their medicines, an audit report states.
The CVS Caremark contract for state workers and retirees, which continues to be the subject of litigation, took effect Jan. 1. A report by Louisiana Legislative Auditor Michael Waguespack concluded that 2.6% of participants in the previous Express Scripts contract – 5,167 people – were forced to find new pharmacies as independent pharmacies opted out of the new plan.
“Plan participants who use pharmacies in municipalities in rural parishes appear to be more affected by the pharmacy opt-outs than members in more populated areas,” the auditor’s report says.
No pharmacies pulled out in cities such as New Orleans, Lafayette and Lake Charles, but smaller cities such as Cottonport saw the loss of independent pharmacies, according to the report. Testimony before the Legislature’s Joint Insurance Committee indicated that the amount of reimbursement for independent pharmacies under the new contract was below that of the actual cost of supplying certain needed drugs, the audit says.
Randal Johnson, spokesman for the Louisiana Independent Pharmacies Association, said the impact of the new contract goes beyond the 5,167 participants mentioned in the auditor’s report. The inadequate reimbursements can affect the ability of some pharmacies to stay in business, Johnson said.
"If that health care provider cannot get reimbursed to cover their costs, then they're unable to be in business to provide that care,” he told the Louisiana Record. “So it's not just impacting state employees, it's affecting entire communities.”
Problems associated with the new contract will be more apparent in rural areas, according to Johnson. The patients who can no longer access their independent pharmacies are a particular concern because they tend to have a personal counseling relationship with their local pharmacist, he said.
“What you also find is that the patient chooses that pharmacy because of that advice, convenience and trust," Johnson said.
While patients using chain drug-store pharmacies typically pay for medications with credit cards, independent pharmacies often allow customers to have house accounts, he said. This is helpful for retirees who may otherwise have to wait for their retirement checks to arrive before they can buy medications, according to Johnson.
The new contract provides excess payments to the middleman, and a more transparent health care contract could actually save the state $100 million per year, according to the Independent Pharmacies Association.
The contract is currently the subject of litigation before the First Circuit Court of Appeal in Baton Rouge.