Magazine article Drug Topics

Drawing the Line

Magazine article Drug Topics

Drawing the Line

Article excerpt

Drug chains

fight back

against falling

reimbursement

To hear chain drug retailers tell it, the process of negotiating reimbursement rates with managed care organizations has become something of a corporate limbo contest: The MCOs hold the bar closer and closer to the ground, asking the chains, "How low can you go?"

While that might be a good icebreaker at Club Med, it looks to have a chilling effect on relations between the two industries, with patients possibly being left out in the cold.

According to a report in the Philadelphia Inquirer, Independence Blue Cross plans to reduce its reimbursement rate by 3% as of Nov. 1, and Aetna U.S. Healthcare cut its rate over the summer by as much as 6%, leaving some retailers barely breaking even on prescriptions.

CVS Corp. refused to go that route, however, and decided to stop participating in the Independence Blue Cross plan, according to CVS spokesman Fred McGrail. As previously reported in Drug Topics (Oct. 6), CVS chose a similar course of action when HIP Health Plan of New York and ChoiceCare dropped their rates to levels deemed "unacceptable" by the chain. CVS has since come to an agreement with HIP and reinstituted prescription service to that plan's members. However, as of Dec. 31, ChoiceCare members will be out in the cold-and not shopping the aisles of CVS while their prescriptions are prepared.

"That was a huge issue," McGrail acknowledged. "Certainly we don't want to be put in a position where we have to walk away from that business. We're in the prescription services business. We want to be in the plans. But where the reimbursement levels just don't make sense, we are going to take a hard line. We feel that, as tough as it is, it's the right thing to do." Rite Aid Corp. has opted to stop participating in "many plans over the years," Independence Blue Cross and ChoiceCare among them, according to Eric Elliott, senior v.p. of pharmacy services. He agreed that turning away prescriptions from customers is a risk. "We're very concerned, but don't think that folks view it as Rite Aid taking something away from them," he said. "It's the health plan that is taking something away."

Elliott claimed that some plans have basically eliminated the negotiation process and have adopted a "take it or leave it" approach to reimbursement rate offers. …

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