Medicaid decision hurts city drugstore

NASHUA – Rice’s Pharmacy has served Medicaid clients ever since the state health insurance program for the poor became law in 1965.

But this week, owner and pharmacist Roger Hebert posted a sign in the window of the 136-year-old Main Street business announcing the drugstore will no longer accept new Medicaid customers.

For a business that has depended on Medicaid prescriptions for 30 percent of its revenue, the decision was both painstaking and difficult.

But it was also the only interim plan Hebert said he could devise, given an announcement Monday from state Health Commissioner John Stephen that he would temporarily enforce a state law requiring pharmacists to charge the state about 4 percent less for Medicaid prescriptions.

Several pharmacists operating other independent pharmacies in the city said they were not planning to discontinue Medicaid prescriptions, although the law could force them to make some changes down the road.

Hebert, however, said the state ruling puts him in an untenable position. Lower rates mean reduced income that must be recovered elsewhere to allow him to remain in business.

“It’s fine to get busier as long as you can cover your expenses,” Hebert said.

He said his pharmacy, which offers home deliveries, had been drawing new Medicaid patients “almost daily.”

To provide service, Hebert said he would need additional help, a cost he could not recover if he is forced to accept lower payments for Medicaid prescriptions.

“We decided as of Thursday, at this point at least, until we know for certain what we’re doing with the Medicaid business,” Hebert said.

Rice’s Pharmacy will continue offering prescriptions to current Medicaid customers.

Until recently, the state was paying pharmacies the average wholesale price minus 12.5 percent, plus a $1.75 dispensing fee. The new rate is the wholesale price minus 16 percent, plus $1.75.

Stephen, the health commissioner, is enforcing a state law requiring pharmacists to offer the state their best price. He said an audit found some pharmacists were selling to some customers – most likely large health insurance providers – at rates lower than the state pays.

Stephen said Monday that his department would negotiate with pharmacists while the temporary rate change was in effect.

David Minnis of the state pharmacists association said earlier this week that four or five pharmacies in the state already refuse to fill Medicaid prescriptions because of the cost.

For Hebert, the lower rates create a dilemma.

“By continuing to take new (Medicaid) patients, the volume goes up,” he said. “I can’t hire new people and not have costs covered.”

In addition, Hebert said, he is considering dropping some expensive psychiatric drugs from his inventory – medicines used in large numbers by Medicaid patients. These prescriptions, he said, are far more costly for him than drugs used by non-Medicaid patients.

“There’s a significant difference in the cost of medications that program uses and the state expects us to carry those,” Hebert said.

“Unfortunately, the patients are the ones who are impacted the most.”

Pharmacist Chris Stone, owner and operator of Peter’s Pharmacy, an 18-year-old independent pharmacy on Amherst Street, said Medicaid clients represent about 20 percent of his business.

“We’re taking it on the chin,” Stone said of the recently decreased state rate for Medicaid prescriptions. “We can’t do much.”

At Medicine World, a 22-year-old business on Main Dunstable Road, pharmacist and owner Bob Lolley agreed. Stone and Lolley both are continuing to fill prescriptions for new and current Medicaid customers.

“The issue is this: The state is trying to save money and won’t go up against the manufacturers or wholesalers,” Lolley said.

“The only one they have control over is the local pharmacist.”

Hattie Bernstein can be reached at 594-6439 or The Associated Press contributed to this report.