Battle continues over Medi-Cal pay to area pharmacies

Dec. 03--Administrators of a Medi-Cal health plan said they won't push for lower prescription reimbursements despite complaints from independent pharmacists who say a sharp cut in payments over recent months may push some of them out of business.

The conflict, expected to be addressed in a public meeting Monday, involves payments for medications in the publicly funded Gold Coast Health Plan. Gold Coast administers Medi-Cal health insurance to more than 200,000 low-income people in Ventura County.

Pharmacy reimbursement rates are controlled not directly by Gold Coast but by one of the nation's larger pharmaceutical benefit managers, OptumRx.

OptumRx was contracted last year to run Gold Coast's pharmaceutical efforts and launched its program this summer. Independent pharmacists said their reimbursements fell sharply, hitting levels that no longer keep up with their costs. They said OptumRX refuses to renegotiate its payment rate, instead citing the pharmacies' existing contract with them through pharmacy services administration organizations that serve as intermediaries.

"They said, 'This is the contract,'" said Kent Miles, a retired pharmacist from Simi Valley who has helped lead the drive for higher rates. "They said, 'If you guys keep complaining, we're just going to kick you out of the program.'"

OptumRx did not respond to questions about reimbursement. In October, a company spokesman cited a goal of providing a broad network of pharmacies while also keeping prices affordable for Medi-Cal members and the taxpayers who support the government insurance program.

Gold Coast is governed by the Ventura County Medi-Cal Managed Care Commission. At a commission meeting Monday, a representative of the California Pharmacists' Association will continue efforts to push Gold Coast to use its leverage to persuade OptumRx to renegotiate its rates.

But that's not happening, said Gold Coast CEO Dale Villani, calling the payment rate fair and citing the Medi-Cal plan's efforts in responding to the commission's directive to investigate pharmacists' concerns.

Gold Coast and OptumRx met individually with pharmacies, conducting 13 meetings over three days. They were told payment rates dropped, with pharmacists making an average of about $4 to $5 per prescription for all Gold Coast medications, compared to $10 to $11 reimbursement under the previous pharmacy benefit manager, said Anne Freese, Gold Coast pharmacy director.

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But Gold Coast faced financial penalties from the state because the old payment rates were too high, Villani said. He emphasized the importance of a publicly funded plan serving as a good fiscal steward while also protecting access to care.

OptumRx provided a national analysis showing the lower rates are competitive with what other insurers pay for managed Medicaid programs, Villani said.

"I'm comfortable that the rates Optum has put in place are fair, market-competitive rates," he said.

In an October story, Miles said the rate under OptumRx is $1.25 over cost for generic drugs, noting that generics comprise about 90 percent of the Medi-Cal market.

"It's not fair. It's not reasonable," he said Friday. "Pharmacies are not going to stay in business at that rate."

Alondra Arias, a supervisor at Hueneme Family Pharmacy in Port Hueneme, said the pharmacy's agreement with the intermediary that then contracts with OptumRx means she can't discuss specific reimbursement amounts.

But rates, in general, are too low, Arias said.

"Sometimes, it doesn't even cover the cost of the medication," she said in a claim echoed by other pharmacists.

Freese of Gold Coast encouraged pharmacists to file appeals over any reimbursements they feel are unfair. She said the plan wants OptumRx to deal with pharmacists' concerns but won't push for renegotiated rates.

Villani said there's no indication the lower rates to pharmacists have affected the ability of people covered by Medi-Cal to get their medications. That access, he said, is the priority.

Pharmacists said access will fall because the current reimbursement rates will force some of them out of business.

"Our perspective is that the health plan is really taking a short, myopic view with the contract with Optum and not looking at consequences," said Jon Roth, CEO of the California Pharmacists Association.

Pharmacists also worry about retaliation for their complaints against OptumRx, suggesting the company could force them out of the Medi-Cal market or conduct audits. Some said the fears would keep them from attending Monday's meeting.

"They've called me up and said personally, 'You can't talk about what we pay our customers,'" said one.

Villani said OptumRx has assured Gold Coast there have not been any such acts.

"We really want transparency, open dialogue and communication," he said.

At Monday's meeting, Danny Martinez of the state pharmacists association is expected to voice concerns that Gold Coast and OptumRx are moving to a system where mail-order medication expands dramatically, replacing most, if not all, of the reliance on pharmacies.

Villani praised mail-order as an option that helps people who can't travel to pharmacies. He noted that the option is already used by some Gold Coast members.

"At this point, there is no organized activity to increase mail order," he said.

The county Medi-Cal commission will meet at 2 p.m. Monday in the community room at the Gold Coast Health Plan offices, 711 E. Daily Drive, Camarillo.

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