It may not be raining anywhere in Texas, but the storm clouds are definitely getting dark on the pharmacy horizon. 

The thunder is getting louder in the ongoing fight over managed pharmacy care in the Texas Medicaid program. State legislation authorizing statewide managed care and the carve-in of pharmacy benefits has already been signed into law, but the transition from the current fee-for-service model can't take place until the Center for Medicare and Medicaid Services (CMS) grants a Section 1115 Medicaid Research and Demonstration Waiver. The Texas Health & Human Services Commission (HHSC) submitted the waiver request to CMS on July 13, 2011, without proper compliance with state and federal administrative procedure requirements. HHSC has already awarded contracts to managed care organizations and PBMs even though this transition to managed care has not been approved by CMS.   

Amanda Gohlke Fields, General Counsel for American Pharmacies (the parent company of TPBC), has sent letters to HHSC and CMS (See the HHSC letter  See the CMS Letter) objecting to HHSC's alleged failure to comply with state and federal administrative procedure requirements, which require proper and meaningful public notice and comment. On Monday, August 29, American Pharmacies took legal action in court, asking a district court judge in Travis County to grant a temporary restraining order (TRO) that would require HHSC to pull the waiver back from deliberation by CMS until these procedural aspects are addressed. Although the district judge advised HHSC that "it is a mess," she did not grant the TRO that APRx requested. Please stay tuned for more information about APRx's legal challenges to Medicaid managed care.

(L-R) TPBC Exec. Director Richard Beck and APRx Gen. Counsel Amanda Gohlke Fields with U.S. Rep. Lloyd Doggett at the TPBC meeting on August 23.

On August 23, more than 50 APRx members and other pharmacists from Austin, San Antonio, Corpus Christi and the Valley met in San Antonio with U.S. Rep. Lloyd Doggett to coordinate opposition to the CMS waiver. At the TPBC-sponsored meeting, Doggett agreed to lead the effort to gain congressional support in Texas for urging CMS to deny the waiver. Rep. Doggett has been a strong ally of independent pharmacy, especially on PBM issues. He strongly supports our position and said he views pharmacists as the most accessible health-care providers.  

We need you to contact your Texas congressional representative as soon as possible to urge him or her to sign on to the Doggett letter opposing the CMS waiver. (Find your U.S. House member here.)  

It's also not too late to file your opposition to the managed-care changeover with HHSC:  Write an email immediately to Christine.Longoria@hhsc.state.tx.us opposing the HHSC waiver request. State who you are, the location of your pharmacy and your opposition to Medicaid managed care for Rx benefits. If your patients will lose access to a community pharmacy or if managed care will threaten your ability to stay open or adequately staff your pharmacy, let HHSC know! Please copy us with your email to HHSC. Don't Delay -- The deadline for submitting comments to HHSC is tomorrow -- August 31, 2011.

New Navitus PBM Contract

When Texas legislators cut the Medicaid dispensing fee by $1 in the 2011 session, they expressed a commitment to preserve patient access to pharmacy, especially in small towns and rural areas. They backed off a proposal to cut the fee by $1 more for fear that slashing pharmacy payments would put pharmacies out of business and reduce patient access to care. And when lawmakers passed legislation authorizing the migration of Texas's Vendor Drug Program to managed care, they included a requirement for open pharmacy networks.

Well, the MCOs and PBMs can't exclude independent pharmacies from provider networks, but they can sure put them out of business. Independent pharmacies all over Texas report that they're receiving proposed Medicaid provider contracts from Wisconsin-based Navitus with a reimbursement formula of AWP - 17% + $1.35. That's an 80% reduction below the already reduced (by 12%) $6.50 dispensing fee! A 2007 study conducted by UT's Center for Pharmacoeconomic Studies determined the average dispensing cost in Texas was $9.61. Setting Medicaid reimbursements at rates that are way below drug acquisition cost will put small pharmacies out of business or force them to turn away Medicaid patients.   

During the session, noted Texas economist Ray Perryman of the Perryman Group reported that managed pharmacy care administered by MCOs or PBMs would cost the Texas economy $3.1 billion, eliminate 42,923 permanent jobs and shut down 770 Texas pharmacies, most of them independent or small-chain operations. Past experiments in Ohio and Florida prove that Medicaid managed care won't save money. But it will generate profits for MCO and PBM middlemen, drive providers out of business or out of networks, and reduce care access for poor Texans.    

Navitus apparently is acting on behalf of a consortium of about 19 hospital- and community-based MCOs that have all agreed on the same Rx reimbursement formula for Texas. Some members tell us that Navitus won't negotiate on the proposed formula (AWP - 17% + $1.35). (APRx is evaluating the Navitus contract.) Navitus informed our members that pharmacies do NOT need to sign up by August 31 (the deadline mentioned in Navitus' letter sent with the agreement). Navitus says that pharmacies can sign up by the end of the year, as the new groups will be starting in the first quarter of 2012. Please be sure you evaluate your decision and the reimbursement formula carefully before you commit to be part of the Navitus network.