Anti Mandatory Mail Order Victory

Anti Mandatory Mail Order Victory

Anti Mandatory Mail Order Victory

Anti Mandatory Mail Order Victory. A little noticed  NYS Healthcare Law has gone under the radar  amidst  fast changes in Affordable Care Act tumult.   AMMO – Anti-Mandatory Mail Order passed late Dec 2011 effective for groups renewing  after Jan 11, 2012.  A significant signal by Governor Cuomo to stand up to the billion dollar industry no doubt.

According to trade group Pharmacists United for Truth the PBM (pharmaceutical benefits managemnt) claim that mandatory mail order lowers costs proves otherwisee. Plan sponsors are routinely charged far more than retail price in mandatory mail order plans, and their lack of transparency keeps plan sponsors to detecting the unreasonable prices.

After spending a  good part of a day in early March helping a NYS client  faced with mandatory mail order I learned of this change.  For certain medications the insurer limits retail pharmacy coverage.  While the incentivisation of  90 day supply at 2 copays was attractive this has now declined to 2.5 copay.  With few exceptions such as specialty pharmaceuticals retail pharmacists are given the same advantages and evening the playing field.

The National Community Pharmacists Association’s blog post below offers a helpful FAQ.  Additionally with the steady decline of the local independent pharmacist a quality of personalized care has been eroded.  The price paid in patient compliance and safety has received little attention. Independent Pharmacists  have been the canary in the mine for fellow small businesses competing with large copra big box chain stores. At least now NYS is finally listening.

The New York Anti-Mandatory Mail Order Victory and Community Pharmacists Nationwide

By Kevin Schweers

Community pharmacists in New York scored a significant win for their patients, communities and pharmacy choice in late 2011 with the enactment of the Anti-Mandatory Mail Order or AMMO with overwhelming, bipartisan backing. What lessons might the campaign in support of the AMMO law hold for community pharmacists across the country?

To find out, NCPA recently asked one of the legislation’s staunchest supporters and advocates to share his observations on the effort to enact the AMMO law. Craig Burridge, M.S., is Executive Director of the Pharmacists Society of the State of New York (PSSNY). Mr. Burridge credits PSSNY members as most instrumental to enacting AMMO over the fierce opposition of mandatory mail order proponents, principally large pharmacy benefit managers (PBMs). He notes people including Ray Macioci, Charles Catalano, Vinny Chiffy and literally hundreds of pharmacy owners helped win a hard fought battle by gathering tens of thousands of signatures on petitions from their patients and coordinating tens of thousands of phone calls, emails and letters.

What follows is a Q&A with Mr. Burridge, in hopes that his advice would benefit patients and independent community pharmacists in other states advocating for patient choice.

NCPA: When it comes to the forced or mandated use of mail order pharmacies, many of the concerns expressed by patients and the community pharmacists who care for them are not new and have, in fact, been voiced for a number of years. What made 2011 different in New York?

Mr. Burridge: In New York, consumers by the tens of thousands signed petitions at their local pharmacy against mandatory mail order. Patients wrote dozens of letters to the editor of many regional newspapers telling about their horror stories with mail order. Finally, pharmacy owners had had enough of losing their patients to self-dealing PBMs. Tens of thousands of phone calls to the Governor’s Office and to Legislators were made by pharmacy owners, their staffs and their patients in support of passage of the no mandatory mail order bill.

NCPA: One obstacle to ensuring patient choice of pharmacy is the myth of mail order savings. This persists in some minds despite what appears to be rampant mail order waste and studies demonstrating how health plan sponsors that incent or require the use of mail order can end up paying more for drugs. Did you encounter such misperceptions and, if so, what did you do to alter or overcome them?

Mr. Burridge: We did in New York. The PBMs came at us with ads stating that costs would go up and that it was a ‘prescription drug tax’ or that it would ‘prohibit mail order.’ We responded with evidence that exposed the ‘spreads’ being used at mail for generics and the fact that the legislation requires participating pharmacies to agree to the same reimbursement and the same co-pays.

NCPA: The health care benefits of a patient’s face-to-face consultation with a community pharmacist and the preference of most patients for going to a local pharmacy are both well-established. But how did you chronicle and reinforce the economic and tax benefits of buying local when it comes to pharmacies?

Mr. Burridge: According to national data (IMS Health) for 2009, the last year we had data before introducing legislation, 22.8 percent of the national drug spend was for mail order prescriptions. Using New York’s percentage of total drug spend (11 percent), we removed hospital expenditures and Medicaid (which had less than one percent mail order) and came up with a mail order drug spend in NY in access of $5.8 billion annually. New York State has no major mail order facilities so this represents thousands of lost pharmacy jobs.

NCPA: Like PSSNY, NCPA continually stresses to its members the importance of grassroots activism, whether it is at the federal or state levels or with local employers and leaders. Did you find that your memberships became more engaged than usual in 2011 and, if so, what did you do to encourage their further involvement?

Mr. Burridge: It helped to have the PBM industry fly in colleagues from around the country and host their own Lobby Day. They told legislators that New York’s pharmacies could survive on acute medications only. This only caused yet another round of thousands of phone calls from our pharmacists, their staffs and patients. Our grass roots turned into a raging grass fire. Livelihoods were at stake and our opponents showed their hand. They wanted ALL maintenance medications going to their wholly-owned out-of-state mail order facilities. Our legislators saw that too.

NCPA: What surprised you the most about your 2011 campaign against mandatory mail order?

Mr. Burridge: I’ve been doing this too long to be surprised. We expected the worst from our opponents and they did not disappoint us.

NCPA: What were some of your opponents’ most challenging arguments and how did you address them?

Mr. Burridge: That depends if you consider outright lies as a challenge. Their ads said that it was a “Prescription Tax” or, when that flopped, they said our bill “would prohibit mail order.” These were easily swept aside and only upset legislators who felt the PBM industry was accusing them of passing a tax on prescription drugs.

NCPA: Do you have any other words of wisdom that you would like to share with concerned patients or your colleagues in community pharmacy?

Mr. Burridge: Choosing one’s pharmacy should be a basic right. If the playing field is level, it only makes sense to buy local. Watch out for PBMs calling all maintenance medications so-called ‘specialty drugs’ as a way of getting around no mandatory mail order laws. We’ll have a lot more to say on that in the near future.

UnitedHealthcare Buying Medical Groups?

UnitedHealthcare Buying Medical Groups?

UnitedHealthcare Buying Medical Groups?

Optum Health owned by UnitedHealth Group

Today’s WSJ reports UnitedHealth Buys California Group of 2,300 Doctors may be a signal of future trends in healthcare where there is blurring of the lines between insurers and providers.  The article goes on to to mention that United Healthcare has stated that providers acquired by Optum will not work exclusively with United’s health plan, and will continue to contract with an array of insurers.

The article goes on to state that “the potential complications that might ensue, Monarch is currently in an arrangement with United competitor WellPoint Inc. to create a cooperative “accountable-care organization” aimed at bringing down health-care costs and improving quality.”

In the aftermath of Health Care Reform, insurers profits will be curtailed. New price limitations imposed by  MLR (Maximum Loss ratios) where 85% of large group premiums collected must be spent on healthcare services(claims) and health quality improvement . New state tax surcharges such as New York’s 82% of above MLR applies to small groups.  In fact in NY the cost of doing business is a staggering 16%+ added to the usual corporate tax. See The NYS Surcharge.

 Additionally, the industry as a whole will be paying an annual tax to help pay for PPACA(Patient Protection Affordability Care Act).  This tax rises from $8 billion in 2014 to $14.3 billion in 2018 and in later years, even higher according to a complex index. See Kaiser Bill Summary .

While its unglamorous to defend insurers they are clearly paying their share and like it or not they are good  at health care management.  Unlike foreign HQ tax loop holes taken advantage by companies such as G.E. , an insurer cannot place patent rights in Zug, Switzerland and take advantage.  Each of these taxes is increased regularly by the State and contributes significantly to annual increases in rates.  The competition in the health insurance industry is already at a dangerous low levels.  Negotiating with insurers has become an overwhelming challenge in the large group market.  Hospital groups have merged to mirror this Oligopoly trend and contractual issues are the new normal.  See Empire & Stelllaris Reach pact.

So what to do other than to find profits elsewhere? Many issues and questions will abound as to the antitrust nature of this action.  A similar issue appeared in the 90s Merck-Medco merger between a pharmaceutical and mail order PBM.  The conflict of interest claims will abound, how do you negotiate one provider group owned by United-Healthcare as opposed to one owned by HealthNet? Will insurer share competitive insights with other practices?  Are small independent Dr. Groups completely left out of the loop and feel pressured to be bought out?  Will the insurers medical group have unfair advantage in buying out the smaller physician practice?   Perhaps in the same vein of the Merck-Medco analogy the health insurer shareholders will do well for a decade and then simply split up?

Its all too early to tell but this much is clear, there aint no money in running a health insurance management company today.