Walgreens will stop filling prescriptions for Midwest Health Plan
Walgreens announced yesterday that they will stop filling prescriptions under Midwest Health Plan citing reimbursement rates that are too low. An interesting move, but one that's not unique. Brooks and CVS did this several years ago in Massachusetts when the state announced that it would reimburse pharmacies less than it cost them to fill a script, meaning that for every prescription filled on MassHealth, the pharmacies would lose money. (This has since been resolved, of course.)
What is surprising is that this is a private health plan that's reimbursing at rates like this. While the article is not specific, big chains can usually make up for tiny margins by doing huge volumes, which is why you don't see many independent pharmacies anymore — they simply can't compete with the big chains' economies of scale. But apparently MHP is pushing the envelope a bit too much:
The company said it has been in discussions with Dearborn, Mich.-based Midwest Health Plan Inc. on a new rate for months. It called the costs of providing patients with their medication therapy and processing insurance claims "considerable."
"We apologize to our patients who will be inconvenienced by this decision," said Chris Whelan, Walgreen vice president of store operations. "But current payments from the plan don't adequately reimburse us for the services we provide."
He said the company remains committed to working with Midwest Health Plan and is optimistic its pharmacies will rejoin the plan at a future date.
MHP will re-jigger the numbers a bit and start doing business with Walgreens again, because they'll experience a huge drop in customer satisfaction and have to deal with defection if they don't. A pharmacy has no obligation to fill prescriptions it can't make money on — they are, after all, a business, and you don't make money by losing it every time you fill a prescription.
[tags]Medicine, pharmacy, Walgreens, pharmacy benefit managers, PBMs, MHP, Midwest Health Plan[/tags]
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[...] In any event, just over a month ago, I covered Walgreens's decision to not accept Midwest Health Plan. Now Walgreens is joined by CVS. Retail pharmacy chain CVS Corp. said Tuesday it will stop filling prescriptions for members of the Midwest Health Plan network on Aug. 16, citing inadequate pharmacy reimbursement rates. CVS said it has been in discussions with Dearborn, Mich.-based Midwest Health Plan Inc. for months about the rates. [...]
Pingback by CVS will stop filling Midwest Health prescriptions :: OnThePharm — July 19, 2006 @ 11:32 pm