Ark. Attorney General investigating CVS Caremark reimbursement rates

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LITTLE ROCK, Ark. (KTHV) - Pharmacists have been complaining of dropping medication reimbursement rates.

Now Attorney General Leslie Rutledge is stepping in. She’s investigating one major middle-man in the pharmacy world, Pharmacy Benefits Manager (PBM), CVS Caremark.

Pharmacists worry they're in jeopardy of closing their businesses because they're losing money on prescriptions and they're all pointing fingers at the third party administrator, the PBM, who's responsible for dictating reimbursement rates.

"When the pharmacists are paid below cost, many times they don’t have any choice but to turn them (patients) away," said Dr. Scott Pace, CEO, Arkansas Pharmacist Association.

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Pharmacists claim they're losing money or forced to turn away patients because reimbursement rates don't cover the actual cost of the medication.

"The big goal for us is just to be treated fairly," said Pace.

That's why Rutledge launched an investigation demanding information from CVS Caremark.

“When our local pharmacists are not able to take care of Arkansans that becomes a public health issue," said Rutledge.

PBMs are responsible for handling claims. They’re the middleman between pharmacies and insurance companies.
"We don’t want this to be a public health concern," said Rutledge.

Pace showed us one example from a pharmacist from last month:

The pharmacy bought a generic nausea medicine for $615 from the drug company. The patient, because of insurance, doesn't have to pay anything to buy those pills. So now the pharmacy has to go back to the insurance company to get paid.

Here’s where the PBM comes in.

The insurance company pays the PBM. In this case they gave CVS Caremark $869, but the PBM only gives the pharmacist $25. CVS Caremark pockets the difference, $844. In the end, the pharmacy lost a total of $590 dollars just by filling this prescription."

“That’s illegal in the state of Arkansas," said Pace.

The investigation will determine whether CVS Caremark is violating the Deceptive Trade Practices Act.

Rutledge will investigate other PBMs as necessary.

“We want to make sure our local pharmacists are receiving the rate they should be because they don’t need to go in the hole to take care of their clients and customers," said Rutledge.

To help with the investigation, Rutledge is asking any citizens who have been affected by these rate changes to contact her office.

CVS Caremark released this statement to THV11:

CVS Caremark is focused on providing our pharmacy benefit management clients with opportunities to improve health outcomes for their members, while also managing costs, and is committed to providing our PBM clients and their members with a broad network of pharmacies that includes local, independent pharmacies.

We reimburse our participating network pharmacies, including the many independent pharmacies that are valued participants in our network, at competitive rates that balance the need to fairly compensate pharmacies while providing a cost-effective benefit for our clients.

We also have a well-established appeals process for network pharmacies regarding reimbursement, and our responses to those appeals comply with all applicable laws.