UPMC reinvites pharmacies, but at what cost?

Pressure from the public and elected officials has prompted UPMC Health Plan to reconsider its narrow pharmacy network that excluded many small, independent Bedford County pharmacies, from certain insurance plans.

However, pharmacists who have since been offered contracts said the reimbursement rates are so low that they are not sure they can agree to the terms, prompting one to use the phrase "legal mafia" to refer to what they consider heavy-handed tactics by the insurance and healthcare giant.

The pharmacists said the terms of the contract are strictly confidential and cannot be discussed with other pharmacists or the public. The pharmacists said they believe this lack of transparency provides the insurance company with a cover to offer a poor-faith contract which the pharmacists must refuse, allowing UPMC to place fault with the pharmacies for the fact they are no longer included in the plans.

If UPMC is proud of the offers they are making, Fisher's Pharmacy co-owner Jennifer Leibfreid asked, why are we not allowed to discuss them?

"We have to make a little bit of profit. We have to pay our employees, our bills, just like any other business," Lower's Pharmacy owner John Mobus said.

Chronis Manolis, senior Vice President of Pharmacy at UPMC Health Plan, said limiting the network will help to keep premiums down. Building networks is a "complicated process," and one that is evolving. He said in all, 11 out of 14 pharmacies in Bedford County were offered contracts, eight of which are independent businesses.

Public feedback prompted the inclusion of some of the pharmacies, originally excluded from the initial contract offerings, based on volume of business, mileage, accessibility, and other factors. Two of those pharmacies have opted in, he said, one declined, and they are awaiting responses from three more.

"While it may be a smaller network, it's a quality-based network," Manolis said, noting that the overall shift is to a more value-driven methodology.

Consumers insured independently through the marketplace, which in Pennsylvania is known as Pennie, and any business with 2 to 50 employees who purchased employee coverage through the marketplace, received letters in late November advising them that their pharmacy options would be limited mainly to large chains, including Giant Eagle, Rite Aid, and Walmart, although a few smaller options remained on the table.

Pharmacists said at the time they received no warning, and were alerted only after customers began questioning them about the letters.

Manolis said the narrow network only applies to about 10 percent of their business.

The move prompted a backlash locally, as many people in rural locations such as Saxton and Hyndman face long drives and mountainous terrain to fill prescriptions at the alternate locations. Mail-order prescriptions are also available.

State Rep. Jesse Topper said he approached UPMC to ask them to reconsider due to the "geoaccess issues."

"I'm asking them to take a look at what that would mean for a rural area like this one and they have agreed to do that," Topper said.

But pharmacists who were subsequently issued contracts to sign said unilaterally that the terms are prohibitive and appear to be an attempt by UPMC to force them to refuse, taking the heat off of UPMC Health Plan when it comes to the disgruntled customers.

"I ended up getting the contract. I had to turn it down," said Northern Bedford Pharmacy pharmacist Joe Breton. "I would not be able to stay in business with that contract, and there were other terms I could not live with."

"I've never seen a chain (pharmacy) contract. Do they get better reimbursements? I don't know," said Mobus, who said he was not issued a contract by UPMC either before or after the backlash.

None of the pharmacists would speak about the contract's terms, but all agreed that the reimbursements were prohibitively low. One pharmacist suggested that the contract included a stipulation that would require pharmacies to respond to customer service complaints by capitulating to demands such as opening extended hours or seven days a week.

"Pharmacy is one of those fields where someone else dictates your prices," said Potomac Valley Pharmacy manager and pharmacist Dan Iseminger. He said he created a spread sheet with the calculated losses from the contract he was offered, and described them as "unbelievable."

"Pharmacies are always gauging the reimbursement of all their payers and making business decisions that are unique," Manolis said.

Iseminger said a law was passed in Maryland a few years ago that requires reimbursement rates to be the same for all pharmacies in the state. If one pharmacy receives a 75% reimbursement rate on a specific drug, all pharmacies would receive the same rate for that drug.

Topper said such legislation has been "out there" in Pennsylvania but "it has not gotten exceptionally far yet." He said that smaller businesses being taken advantage of is one of the concerns, but he would not answer specific questions on what could be coming.

"When it comes to specific issues I don't want to get too deep into the weeds of what legislation might look like," Topper said, because it tips his hand to lobbyists who could actively work against the legislation.

A representative from Gov. Tom Wolf's office declined to comment, redirecting all inquiries to the Pennsylvania Insurance Department. The PID issued a statement noting that "the UPMC networks on file meet the time and distance standards required by law." The emailed response also states that no complaints have been received, although there is evidence to the contrary.

In the meantime, pharmacists are still looking for viable options to both keep their customers, and make sure those customers are getting the best service possible.

Many said they are suggesting a hybrid model, pointing customers to mail order prescriptions for name brand medications while continuing to use the pharmacy for generics, which would be paid for out of pocket. Those who use mail order for generics tend to pay more than they would otherwise, but name brand prescriptions would be cost-prohibitive for in-store cash sales, they agreed.

The opportunity to lodge a complaint is still available, Iseminger said, and is as easy as calling the number on the back of the insurance card.

Pharmacist Stephanie Over at Fisher's said the entire situation is confusing. She said small, independent pharmacies offer individual service to clients, including deliveries, after hours and emergency response, and personalized responses to those in need.

"You'd think the insurance would want people who take good care of their patients," Over lamented.

Manolis stressed that UPMC is a "big proponent of the value our community pharmacies provide." He said the company works hard to fund revenue streams that will reward pharmacies for their clinical services, but noted drug reimbursement rates are a challenge.