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Texas Medicaid Managed-Care Problems Gaining National Attention

AUSTIN, Texas, June 22, 2012 /PRNewswire-USNewswire/ -- Pharmacy Choice and Access Now (PCAN)— a national coalition of consumers, local businesses and pharmacists committed to preserving quality and affordable health care today urged Texas state leaders to act quickly to prevent ongoing harm from the state's new Medicaid managed-care program to community pharmacies and their Medicaid patients. Since the State's shift to managed care in March, dramatically reduced payments to pharmacies participating in the program have led to numerous pharmacy closures and other problems for businesses and patients —problems that are now getting national attention.  

"The Texas Medicaid pharmacy program is attracting national attention for all the wrong reasons," said Michael Wright, executive director of the Texas Pharmacy Business Council. "By failing to include simple protections for pharmacies and their patients under managed care, the State is directly facilitating pharmacy closings and loss of jobs. The State is also making it harder for patients to access the pharmacy care they need, especially in rural areas."

A recent New York Times article details the experiences of community pharmacists attempting to adjust to the new system.  The piece mentions dramatic reductions in revenue to pharmacies resulting in business closures and ongoing hardships for those still in business; unfair poaching of independent pharmacy customers by CVS Caremark, a managed care pharmacy benefit manager (PBM); computer errors and miscommunications from the Health and Human Services Commission (HHSC); and a lack of transparency making it difficult for pharmacies to evaluate PBM contracts.

Wright said pharmacists throughout the state have stressed the need for fair reimbursement rates and transparency from the PBMs under the new system.  Given a free hand to do as they like, the PBMs have already slashed reimbursements to community pharmacies by as much as 80 percent, driving many pharmacies out of business and leaving hundreds more struggling to survive. Oak Cliff pharmacy owner Ronald Barrett describes in the article the difficulties posed by the unsustainable reimbursements by saying, "I can't pay my employees; I can't pay my light bill."

"From the beginning, we have asked state leaders for fair, adequate reimbursements and transparency in PBM operations so we can continue to provide the quality care our patients need. As this article shows, instead of fairness, the State appears to have given the PBMs an unfair competitive advantage over community pharmacies and the ability to run them out of business," said Wright.  "The HHSC has failed to respond to our pleas for a fairer system; perhaps they will act now to prevent further embarrassment on a national scale."

Texas is one of many states that has chosen to increase their use of managed care with the hope of realizing cost savings for their Medicaid programs. In addition to the reported pharmacy closures and other problems, a new Bloomberg Government study found that managed care systems decrease access to pharmacy care and actually increase health care costs in the long term when patients develop more serious conditions. 

To support small Texas businesses and the health of the state's poorest citizens, PCAN urges state legislators to act immediately to ensure equitable reimbursement and a level playing field so community pharmacies can continue to service patients under the new managed care system. 

Pharmacy Choice & Access NOW (PCAN) is a coalition of consumers, local business and pharmacists across the nation committed to preserving quality and affordable health care and pharmacy services for patients.  PCAN members are committed to providing the most cost effective solutions in the areas of health care and pharmacy services to enable states around the country to help solve their budget woes while maintaining quality care for children, families and other Medicaid-served populations.  You can Join the conversation on Facebook (Pharmacy Choice and Access Now) and Twitter (@RxPCAN)

For more information, please visit

Contact: Elizabeth Heaton at (703) 901-9706

SOURCE Pharmacy Choice and Access Now (PCAN)
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