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December 16, 2002


From: Tyler Morning Telegraph, TX - 16 Dec 2002

From Staff, Wire Reports December 16, 2002

AUSTIN - A group of pharmacists from across Texas sued the state Monday, claiming new Medicaid prescription rules would put drug stores out of business and make it hard for poor adults to get medicine.

The nine pharmacies and the industry group Texas Pharmacy Association succeeded in getting a state district court judge in Austin to temporarily stop the Texas Health and Human Services Commission rules from going into effect Monday, as scheduled.

The agency estimates Texas could save more than $33 million over the next two years by changing the fees pharmacists get for dispensing medicine to Medicaid patients and by requiring adults to make co-payments.

The pharmacists say the new reimbursement fees won't cover expenses. They also say the poor can't afford the co-payments and will either leave bills unpaid or will go without medicine they need.

Pharmacist Louis Rumsey, one of the plaintiffs and owner of Elam Road Pharmacy in Dallas, said he was shocked by the copay requirement.

He said 80 percent of his customers are on Medicaid and the new rules could force him out of business.

"Most of those adults are the poorest of the poor. They're the sickest of the sick. They may have a physical handicap. They may have a mental handicap. They may be blind. They may be deaf," he said. "Now, we as pharmacy providers are to ask these patients to pay a co-pay."

A.C. Houston, owner of Hospital Pharmacy in Austin, said he also could be forced to close shop after 30 years. He worries that poor patients might not understand the changes and won't get medicine.

"They're defenseless," he said. "They don't have the expertise to fight it."

While pharmacists would be paid slightly more on average per drug - up from $6.36 to $6.87 - they say they'll get less money than before for more expensive medications, potentially costing them hundreds of millions of dollars over the next few years.

Adults enrolled in Medicaid, which covers the poor and disabled, would be asked to pay a $3 co-payment for every name-brand drug and 50 cents for each generic drug, up to $8 per month.

Lawmakers required the change as a way to cut costs in the Medicaid program. W. Mark Sullivan, pharmacy manager at Good's Pharmacy, said the Texas Health and Human Service Commission previously announced it would implement a co-payment system to Medicaid patients. They would pay $3 for brand name prescriptions and 50 cents for generic prescriptions, up to $8 per month.

Sullivan said the commission said the co-payment system was a pilot program to determine what percentage of co-pays could be collected, and it would not change reimbursement to pharmacies until the study was completed.

"There has been talk of a payment reduction for the last six months, but they haven't been able to reach an agreement," Sullivan said. "What has happened here in the last 10 days has been a total blindside."

Sullivan said the change could pose a threat to the existence of some pharmacies in Tyler, and he was also concerned about pharmacies in areas such as the Valley, where 80 percent of all people who purchase prescriptions are Medicaid recipients.

Tyler pharmacist Woody Weaver, owner of Woody Weaver's Pharmacy, also said he would like to see the change rescinded.

Weaver, whose pharmacy serves many Medicaid customers, said he believed the new system of co-payments and pharmacist reimbursement would not last. He said it could financially hurt his business.

"If I had to absorb all the $3 co-pays, yes," Weaver said. "But I think the (Texas) Pharmacy Association will get a stay of execution on it. Medicaid is a big part of our business."

He said, however, the change would not drive the pharmacy out of business.

"Whatever happens, we'll still be here," Weaver said.

The state says pharmacists and others were asked for input, but pharmacists - many of whom are the only ones in their communities - say they weren't given enough time to study the changes.

The changes mean the state will pay pharmacists for the actual costs of buying the drugs while still offering a fair price for dispensing them, said Health and Human Services spokeswoman Kristi Zamrazil.

"Our rule changes are intended to use taxpayer dollars wisely," she said.

Medicaid has been straining state budgets nationwide because of rising enrollment and higher costs. In Texas, a projected budget shortfall of at least $5 billion includes cost overruns in Medicaid and other social services programs.

Sen. Leticia Van de Putte and Rep. Chuck Hopson, both pharmacists, said lawmakers did not intend for pharmacists and the poor to bear the burden of saving money.

"We all understand belt-tightening, but what we're saying is there's a better way to do this," said Van de Putte, D-San Antonio.

The other plaintiffs are: Ridgepoint Pharmacy in McAllen; Rodriguez Pharmacy in Laredo; Rogers Pharmacies in Victoria; Delarosa Pharmacies in Weslaco; Evans Pharmacy in Odessa; S$R Pharmacy in Kirbyville; Pharmacia Inc. in Grand Prairie, and Matthewson Drug Company in Marshall.

© Tyler Morning Telegraph 2002