Pharmacies Say Florida Truckles to HMOs

TALLAHASSEE (CN) - Delegating to private business a power it does not possess, Florida allows HMOs to exclude independent pharmacies from its Medicaid program, allowing only "CVS and Wal-Mart" and a "select number" of other pharmacies to fill prescriptions for Medicaid patients, the Florida Pharmacy Association claims in court.

The Pharmacy Association and several co-plaintiffs, including the Cystic Fibrosis Pharmacy, claims the actions of Florida's Agency for Health Care Administration "are unnecessary, unprecedented and unauthorized by law. The unfettered transition of Medicaid patients to closed pharmacy networks has no financial or quality-of-care benefits to the state, while creating a huge, and potentially catastrophic, patient danger in rural areas and in access to quality of patient care. In addition, the loss of at least 160,000 and up to 254,000 patients will significantly and adversely affect the nearly 1,300 independent Florida pharmacies and thousands more chain pharmacies and will result in the loss of thousands of pharmacists, pharmacy technicians, administrative and support staff jobs.

"The pharmacy network closures will adversely impact several hundred thousand Floridians that have obtained their pharmacy prescriptions from local community pharmacies that will be excluded from the closed pharmacy networks."

The closed networks already have been implemented in 35 of Florida's 67 Florida counties, including populous Miami-Dade, Broward and Palm Beach counties, according to the complaint in Leon County Court.

The Florida Pharmacy Association, which claims 1,300 members, says that as of July 9, Florida has refused to include independent pharmacies in its provider network, reimbursing only large chain pharmacies CVS and Wal-Mart for Medicaid claims.

It claims that the state's action violates federal regulations that give Medicaid recipients "freedom of choice" to choose their pharmacy.

"Florida does not currently hold a statewide 'freedom of choice' waiver issued pursuant to 42 U.S.C. § 1396N(b)," the complaint states. "Nor has the Florida State Health Plan amendment submitted to CMS [the Center for Medicaid Services] on August 1, 2011, for statewide Medicaid Managed Care been approved by CMS. In addition, Florida has not sought to limit or restrict its pharmacy network based upon need, competitive bidding, price negotiations, credentialing, or similar criteria.

"Absent the agency securing a waiver of the 'freedom of choice' requirements, any credentialed pharmacy is eligible to receive Medicaid reimbursements." (Citations omitted.)

The Pharmacy Association says: "On or about May 4, 2012, Amerigroup Florida Inc., a Medicaid health management organization ('HMO') began sending notices to Florida Medicaid pharmacy providers stating that effective July 9, 2012, such Medicaid pharmacy would no longer be reimbursed or included as a participating provider in the Medicaid HMO's pharmacy network. A true and correct copy of the Amerigroup/CVS/Caremark Network Update is attached hereto as Exhibit B."

The Pharmacy Association adds in a footnote: "The plaintiffs are unaware if any other HMO has sent similar notices but are aware that other Medicaid HMOs, including but not limited to HealthEase, have been denying pharmacy claims of Medicaid patients from pharmacies where such patients have long received their Medicaid prescriptions for drugs approved on the Medicaid formulary."

The Pharmacy Association says it contacted state officials and the governor's office, which "endorsed" the terminations in an email of June 15. The pharmacists say the defendant agency responded to its concerns with a grammatically challenged email that stated, inter alia: "The Agency approved subcontract between Caremark and Amerigroup, permits Caremark to remove a pharmacy from their network at Amerigroup's request."

The Pharmacy Association says it requested a copy of the "Agency approved subcontract," but has not been provided with it.

The complaint states: "Upon information and belief, the Agency's network closure and exclusion of independent pharmacies in the affected counties will result in plan participants being funneled into closed pharmacy networks thus removing their freedom to choose between pharmacy providers, including providers that they have relied upon for extended periods of time. Specifically, it is understood that the only pharmacy providers within the closed network will be CVS and Wal-Mart and a select number of 'independent pharmacies' that, on information and belief, are affiliated with certain other Medicaid MCOs [managed care organizations], including Federally Qualified Health Centers, Exclusive Provider Organizations, Provider Service Networks, Prepaid Dental Health Plans and Prepaid Mental Health Plans. On information and belief, none of the non-CVS and non-Wal-Mart pharmacies are truly independent community Medicaid provider pharmacies. See Exhibit E.

"The pharmacy network closure conflicts with 42 U.S.C. § 1396(A)(23), 42 C.F.C. § 431.51(b)(1), and Section 409.012(37)(a)4, Florida Statutes, by steering Medicaid Managed Care voluntary patient participants currently serviced by members of the FPA, including the Independent Pharmacies, to a closed pharmacy provider network thereby eliminating the plan participants ability to choose any community pharmacy that is qualified to perform the service required. ...

It adds: "In essence, the Agency has attempted to delegate authority that the Agency itself does not possess to a private HMO in express contradiction of the Florida State Health Plan."

The independent pharmacies seek an injunction.

They are represented by John Lockwood, of Tallahassee, and Lori Weems of Milton, Fla.

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