The state has been working to bring down the cost of healthcare in New York, but pharmacists are crying foul over a new proposal they say would devastate their businesses. NY1's Erin Billups filed the following report.
It was standing room only during a recent meeting with over 500 New York pharmacy owners in Flushing, Queens. They're concerned about new Medicaid prescription reimbursement rates set to go into effect later this year.
"How can they even come up with, that these results are even halfway valid?" said one pharmacist in attendance.
Both independent and chain pharmacy owners say the rates, or the so-called Average Acquisition Costs, are well below the true cost of over 50 percent of the drugs given to them in a sample price list by the New York State Department of Health. It's the result of a Medicaid Redesign Team recommendation, an effort to reduce costs and increase efficiency.
In a statement, the DOH said, "Federal law requires that the DOH pay pharmacists their actual cost of acquisition and a reasonable dispensing rate. That is what implementing the Average Acquisition Cost achieves."
The data was taken from monthly pharmacy surveys collected throughout 2013.
Ray Macioci, owner of Pilgrim Pharmacy in the Bronx, says they were willing participants at first.
"It kind of gave us that feeling that we were participating in something that was going to be at least fair. I don't think it was either fair nor equitable," Macioci said.
The pharmacists say the methodology used is flawed and doesn't take profit into consideration. They warn it's the patient who will ultimately get hurt.
"The problem is going to be accessibility to these medications for the needy, for the indigent," said Armand Paganelli of Mount Carmel Pharmacy.
"Even some of the chain drug stores will also be faced with the same consequence and will have to be turning away patients," said Parthiv Shah of Fuller Drug Store.
The pharmacists say their biggest concern though is the precedent that would be set through these new reimbursement rates that other insurers will want to follow.
"How long do you think it's going to take for those other insurance plans to look at that and say, 'Hey, if the state is reimbursing these pharmacies at this cost basis, why can't we'?" Macioci said.
The pharmacies have asked the DOH for more information on how the rates were calculated and are lobbying state lawmakers for help.
"We need to at least get the word out that this is something that needs to be looked at. That this needs attention," Macioci said.
There will be a public comment period on the proposal.
The DOH still needs federal approval, before the new rates goes into effect April 1.