State Rep. Phillip Rigsby (R-Huntsville) recently discussed the details of his pharmacy reimbursement bill in an attempt to correct some of the misinformation he believes has been spread about the legislation.
House Bill 238 requires pharmacy benefit managers to reimburse in-network pharmacies for the cost of acquiring medication and also adds a dispensing fee set by the federal government and used in programs such as Medicaid.
The Alliance of Alabama Healthcare Consumers (AAHC) and other groups came out against the bill due to the $10.64 processing fee, which they believe will raise the costs for consumers.
Rigsby defended the bill Tuesday on Alabama Public Television’s “Capitol Journal.”
“[W]hat that bill does is it provides a fair, transparent reimbursement model where the pharmacist is paid at what’s called an actual acquisition cost, which is a Medicaid-based index pricing that Alabama Medicaid uses since 2007,” Rigsby said. “Plus the cost of dispensing that prescription.”
The state lawmaker said there was a misunderstanding surrounding the “dispensing fee,” causing some to argue it was actually a tax.
“So a lot of people got very, I’ll say confused, about this piece of legislation because it was the narrative was turned that this was going to be a tax on prescriptions,” he said. “So what most what most patients understand is when they go to the pharmacy counter and they have a say, a $10 copay. When they heard the word tax, what they thought was going to happen is that $10 copay would now turn into a $20.64 prescription that the pharmacy would add that tax or fee on top of their current copay. Well, that can’t happen. Contractually, pharmacies cannot change co pays.
“What this bill did is it changed the reimbursement model. So instead of calculating the prices the way that they are calculated now, this bill set up a new calculation model, which is called a Cost Plus model that covers the cost that the pharmacy pays for the medicine which would be all if that’s all they were paid, that would be a net zero return, and no business can operate on a net zero return.”
Rigsby also said the bill is not about trying to help pharmacists “get rich,” but is merely about covering costs.
“But that $10.64 fee was to cover the cost of filling that prescription,” he said. “So that’s your fixed cost, your rent, your payroll, your insurance, your lights, the bottle that it’s in the suit, computer software that you use. And so that $10.64 is not profit in the pharmacist pocket because I heard a lot of that this week, too, that pharmacists are just trying to get rich off this $10.64 But that covers the cost of actually filling the prescription. And that’s what this bill does. And so none of that in this bill. There was no verbiage of tax in the bill.”
Rigsby said proponents will have to do a better job of explaining the bill to Alabamians before it will have a chance of passing the Legislature.
“And I just don’t think we have enough time to re educate not only the industry and understand all the aspects of that, but reeducate the citizens and the patients to understand why it is pharmacies are losing money, why it is pharmacies are closing, we’ve lost 300 pharmacies in the last six years in Alabama,” he said.
Yaffee is a contributing writer to Yellowhammer News and hosts “The Yaffee Program” weekdays 9-11 a.m. on WVNN. You can follow him on Twitter @Yaffee
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