Small pharmacies fight to stay in Medicaid

April 02--FORT MCCOY -- Marianne Glorius would love to just be a small town pharmacist, helping her clients with their needs and avoiding the big city hassles. But in addition to running her business here in rural northeast Marion County, Glorius also spends a lot of time in Tallahassee and on the phone these days, lobbying on behalf of herself and her fellow independent pharmacists.

The issue, simply put, is that Medicaid, the state-federal health insurance program for the poor, is shifting its Florida members to large pharmacy chains to meet their medication needs. That is a problem for independent pharmacies and, often times, the clients they serve.

Glorius is a prime example. She has operated Grandma's Country Pharmacy on County Road 316 since July 1999. Many of her clients are enrolled in Medicaid. The nearest chain pharmacy is 16 miles away, and her clients often don't have reliable transportation to get there.

When her Medicaid-enrolled clients are shifted onto a drug plan that only recognizes the big chains, they must drive right past her store to go into town and visit a place that may or may not even have what they need.

"I'm the only pharmacy in that whole Zip code," Glorius said, referring to a map of 32134, which covers the Ocala National Forest.

Glorius and her fellow independent pharmacists aren't looking for a handout. They are willing to accept the same reimbursement as the chains and meet the same requirements that they meet. They just want to be an option on the Medicaid plans. Glorius needs this to stay in business. And many of her clients need it, as well, to have a realistic access to pharmaceutical services.

That's why Glorius and the Florida Pharmacy Association support Senate Bill 670, which is trying to give small, family-owned businesses an opportunity to continue serving their communities. The bill's key passage:

"A managed care plan may not exclude any pharmacy that meets the credentialing requirements, complies with agency standards, and accepts the terms of the plan. The managed care plan must offer the same rate of reimbursement to all pharmacies in the plan's network."

Unfortunately for Glorius and her allies, there are strong forces working against the bill. Managed care plans say that, to negotiate competitive drug prices, they need to be assured of patient volume. If Senate Bill 670 becomes law, they say, there will be a short-term fix for mom-and-pop pharmacies -- but also a long-term problem for Medicaid in general, as cost savings would be reduced.

The Legislature is in the process of sorting this out. Last month, Glorius testified in front of the Senate Appropriations Subcommittee on Health and Human Services and the Senate Banking and Insurance Committee. She likely will be back in Tallahassee again before session ends. Meanwhile, the House companion bill (HB 625) has been assigned to a subcommittee but hasn't seen any action.

The story really begins in 2004-05, when Florida began shifting Medicaid to a managed care model. (There are 4 million enrollees today.) The number of providers shrank and costs, according to the plan managers, were contained. In 2015, Florida began allowing for limited networks using the managed care model.

Glorius has been a pharmacist since 1998 and opened her business one year later. She accepted Medicaid and had no problems.

Two years ago, the managed care networks started closing. Glorius was shut out of the Staywell plan, and 53 percent of her business evaporated overnight.

"Struggling was an understatement," Glorius said during a recent interview.

The shift to chain pharmacies might make sense in urban areas. But in rural Fort McCoy the system's one-size-fits-all absurdities were on display.

One of Glorius' former clients just stopped taking her medicine and wound up in the hospital. The client complained and the managed care organization agreed to pay for taxi rides to and from the chain pharmacy. The taxi drove right past Grandma's Country Pharmacy.

Another problem: There is only one physician in Zip code 32134. He is in Staywell; Grandma's wasn't. "We can't take care of our own clients in the same community," Glorius told the Senate subcommittee.

After publicizing her complaints, Glorius was put back onto Staywell in early March. But the bigger problem persists -- for her and other independent pharmacies. State Sen. Aaron Bean, R-Jacksonville, said 257 pharmacies, in virtually every sector of the state, shut down last year due to network closures and limited access to independent pharmacy contracts.

Bean, who introduced SB 670, said he's in an odd posture. He supports Florida's move to Medicaid managed care and typically takes up for the health programs themselves. Bean understands that, to negotiate competitive prices, programs need to be assured of volume. That is good for them and good for the state as a whole.

He said he wants to "find the happy ground where we protect our pharmacies" but also preserve the integrity and market power of managed care.

"If we do nothing, Floridians will have a choice of two pharmacies down the road," he told the Senate subcommittee. "We want to bring back choice and competition and have a fair, balanced and healthy managed care program."

That balance might be difficult to achieve. A Senate staff analysis says that requiring Medicaid managed care plans to contract with any willing pharmacy that meets the requirements for participation may indeed "offer patients greater choice and convenience in the selection of pharmacies."

However, "absent the promise of exclusivity of network providers, the bargaining power of the larger Medicaid managed care plans may be weakened," the analysis adds. "Providers may have less incentive to offer substantial discounts to plans, possibly resulting in higher costs to the plans, which may be passed through to the capitation rate setting process."

What would "higher costs" look like? Audrey Brown, president and CEO of the Florida Association of Health Plans, predicts an $80 million impact.

"This impacts the entire marketplace" and Medicaid managed care as a whole, she told the Senate subcommittee.

Michael Jackson, executive vice president and CEO of the Florida Pharmacy Association, a trade group, isn't so sure about Brown's math.

"How do you know" how much cost savings might be lost, he asked during an interview. "This is what the plans are saying, but no one is authenticating that."

Jackson said it's concerning that government, through Medicaid, has designed a system to move market share from one set of businesses to another. He further notes that, five years ago, he and his association predicted the problems that independent pharmacies and their clients would experience as provider networks became increasingly restricted.

"We hoped that we would be wrong," Jackson said.

Another factor working against the independent pharmacies: "Because this change may result in larger provider networks, the plans may need to deploy additional strategies to monitor against fraud, waste, and abuse. These additional responsibilities may have a fiscal impact on the managed care plans. The fiscal impact of the proposed changes will have an indeterminate impact on managed care plans, but if significant, the additional administrative costs most likely will be passed through to the capitation rate setting process," the Senate staff analysis says.

Into all this high technical discussion walks Glorius, an affable but serious woman who, despite her business name, it not a grandmother. Still, the Tallahassee people know her as "Granny" and hold her up as an admirable example of how small businesses can help rural customers. It's a tradition, everyone believes, that is worth saving.

"She delivers when she has to. She takes care of her customers. She's not going make it if she doesn't have the Medicaid business," Bean told the subcommittee.

"I'm out there," Glorius said during her time at the microphone. "They (clients) are family to me."

Also making a compelling appearance in front of the subcommittee was one of Glorius' clients, Mysti Maddox. On her way to Tallahassee to address the lawmakers last month, Maddox had to divert to another chain pharmacy to get medication that her 5-year-old grandson, who has had three open heart surgeries, desperately needs. The chains can't keep it in stock, but Grandma's can.

"They (the chain) promise day after day. (But) they are an hour away," she said. Grandma's is just two minutes from her home.

"Something needs to change," she said.

Craig Hansen, Wellcare's senior director of governmental affairs, is sympathetic to the human stories. But SB 670 is "using legislation to clear up a business dispute," he told the subcommittee.

If SB 670 passes, he said, managed care programs won't get as good a rate on drug prices and rates will go up.

State Sen. Dennis Baxley, R-Ocala, who sits on the subcommittee and so far has supported SB 670, said there is work to be done honoring both independent pharmacists and the managed care plans.

"I think there's a better balance point," he said, reflecting the sentiments of others on the subcommittee.

"I heard you," Bean told the subcommittee. "I accept your challenge."

Meantime, time is running out on the House side. "We've got to get it on the agenda," said Jackson, from the Florida Pharmacy Association.

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