Despite the resounding defeat of Measure #7 on Tuesday, I predict that the pharmacy ownership law issue isn’t done yet. In fact, I have heard that it could come up again, but in a manner which is not directly about allowing the large retail stores to have pharmacies. This could happen as soon as the 2015 North Dakota legislative session, which convenes in January.
We have all seen the various Medicare insurance ads on television lately. These proclaim the fact that if a Medicare recipient would sign up for this plan or that plan, that their copays for prescription drugs could be as low as $1. What those ads speak about is people who have a Medicare Part D or Medicare Advantage plan, which combines Medicare and private insurance into one complete package. Such plans enable those who subscribe to them to take advantage of preferred pricing from a number of national retailers. None of which can have a pharmacy because of the law in North Dakota.
Up until now, North Dakota Medicare recipients were exempt from having to obtain their prescriptions from a preferred provider, because of the lack of brick-and-mortar locations of most of the national retail pharmacies in North Dakota. Because of this, most recipients’ copays remained the same no matter where they obtained their prescriptions from.
This exemption appears to be over in 2015. Unless a Medicare recipient who is on one of these plans obtains their medications from a preferred provider, their copays will increase. In other words, in order to keep their copays from increasing, they would either have to obtain their prescriptions from a brick-and-mortar pharmacy that is on their policy’s preferred provider list, or they would have to obtain their prescriptions by mail order, again from a company that is on their policy’s preferred provider list.
This change will likely cut into the bottom lines of many of the independent pharmacies which are protected by the North Dakota law. Senior citizens make up a large percentage of any pharmacy’s clientele. Accordingly, this could be a huge change for the owners of independently-owned pharmacies in our state.
Enter what has become known as “Any Willing Provider” legislation. This would force insurance companies like Blue Cross Blue Shield, Humana, United Healthcare and others; to extend preferred provider status to any doctor, clinic, hospital, pharmacy or any other health care provider that would be willing to accept the lower reimbursements from these plans. Humana and United Healthcare have some of the largest number of enrollees in Medicare Part D and Medicare Advantage plans in the entire country.
I’m told that when the insurance companies negotiated with these preferred provider pharmacies for their respective Medicare Part D and Medicare Advantage insurance plans, having these negotiations accomplish something is how the Medicare program projects savings of $11 billion annually from these preferred networks. It is my understanding that this change in the law was enacted by Congress under President George W. Bush, who signed it into law.
South Dakota voters last Tuesday passed Initiated Measure 17, which enacts the Any Willing Provider provisions into South Dakota law. Meanwhile, here in North Dakota, I am hearing of a movement which may bring Any Willing Provider up during the upcoming legislative session in 2015.
The message from Tuesday and the defeat of Measure 7 is that the people of North Dakota want to continue protecting the independent drug stores here in our state. That being said, it seems to me that action needs to be taken by our lawmakers on Any Willing Provider first. This means every clinic, doctor, hospital, pharmacy, or any other health care provider would be able to compete on a level basis. I have heard from a very reliable source that Adam Hamm, the state insurance commissioner, could be asked to propose Any Willing Provider legislation for the 2015 Legislature to consider.
If Any Willing Provider legislation were to be enacted in North Dakota, I think that would make the owners of the independent pharmacies here in North Dakota perhaps a little bit more amenable towards allowing the pharmacy ownership law to change. Any Willing Provider could provide the pharmacy owners the protection they are so jealous about keeping.