FRANKFORT, Ky. - Sitting before the Medicaid Oversight and Advisory Committee, pharmacy advocates pled their case
"We're not asking for more money just to get paid more. We just want to get paid fairly. A wise individual said earlier today, it's not about trying to slant the playing field in our favor. It's just about making it level so that we can survive," said Trevor Ray, the owner of Midway Pharmacy.
Ray says previous help from the legislature hasn't gone far enough. "More than $209 million was paid to PBMs [Pharmacy Benefit Managers] by MCOs [Managed Cared Organizations] that was not paid to pharmacies over the past two years."
Ray continued, "Kentucky needs to understand pharmacy claims data for the entire life cycle of the claim or we won't be able to fully understand where our tax dollars are being spent. This is especially true for effective rate contracts. The use of effect rate contracting will continue to add to the disruption of transparency."
In 2018, the Kentucky legislature passed Senate Bill 5 in relation to pharmacy costs.
"Senate Bill 5 requires any rate changes greater than five percent to be approved by DMS (Department of Medicaid Services)," explained Jessin Joseph, the Pharmacy Director for DMS.
Joseph says the bill as passed left possible loopholes for Pharmacy Benefit Managers. He explained, "One of the things that we're doing, beyond just any five percent changes, we do realize that the ability for a PBM to change a drug by three percent every day is a possibility. But again, when we follow that, then look at the aggregate. So, a point in time is what we what we would like, but an aggregate is what I think we're going to be moving toward."
Ray told lawmakers there are still quite a few problems he would like them to address. He explained, "If you're analyzing pharmacy reimbursements just at the point of sale, it will look as if the pharmacy is being reimbursed above acquisition costs, or at a reasonable rate. But if you look beyond the point of sale, and you follow the dollar all the way down to its completion, you'll see net pharmacy reimbursements look a lot different. This is because of post adjudication fees, recoupments, effective rate adjustments, claims-processing fees, and other items PBMs charge pharmacies that serve to lower the overall pharmacy reimbursement."
Ray added, "These back-door fees that we're talking about off of effective rate contracts or DR fees; since 2013, those have increased, and I'm glad you're all sitting down for this, 45,000 percent."
Don Kupper, the president of the Kentucky Pharmacists Association said these fees aren't just impacting independent pharmacies, but also larger chains.
Kupper told lawmakers, "We've seen Kroger Industries, Kroger pharmacies, cut back their pharmacists. Many lost their jobs. Those who are still working are working 30 hours and have to find the rest of what they had as a full-time job elsewhere."
Kupper added, "Just recently Wal-Mart cut quite a few management positions out of their pharmacies around."
Lawmakers like Rep. Steve Sheldon (R- Bowling Green) expressed outrage toward the pharmacy benefit managers, while still acknowledging PBMs are holding the cards.
Sheldon told the group, "We can continue to try to legislate and pass laws, and you know we're going to keep trying, but we're wrestling with a billion dollar company. Three companies, three PBMs own 85 percent of the market in the United States. Is there anything else that you can think of that's that way?"