WASHINGTON—More than a month after filling thousands of unpaid prescriptions for poor, sick customers, many of America's small and independent pharmacists, particularly those in low-income and rural areas, are facing a cash crunch as they await repayment from Medicare's private drug plans.
At Rose Drugs in central Tampa, Fla., many customers are poor people with HIV infections and elderly people on fixed incomes. When their drug coverage switched from Medicaid to Medicare on Jan. 1, store owner Rose Ferlita doled out medicines to combat their ailments even though she couldn't always verify their enrollment in the new Medicare drug benefit.
"What are you going to do?" Ferlita asked. "My friends are my customers and my customers are my friends. You've got to give them something."
As weeks passed and the enrollment problems mounted, Ferlita took out a $40,000 loan to help pay the drug wholesalers who wanted their bills paid now, not when the hoped-for Medicare payments came in.
"Two capsules here, three capsules there. It sounds like nothing, but when they're HIV meds, they're expensive. So I'm praying to God it's going to even out," Ferlita said. "Everyone had an expectation that this was going to be a smooth transition, but it hasn't been. Not even close."
Faced with the prospect of elderly and disabled customers going without life-sustaining drugs, many pharmacists have given out tens of thousands of dollars in medication. As the bills for those drugs came in from their wholesalers, pharmacies have had to pay them while waiting for the plans to reimburse them.
"This is now getting to be one of the top levels of concern," Medicare Administrator Mark McClellan said in testimony Thursday before the Senate Special Committee on Aging.
Computer problems, incomplete data files and poor planning made it impossible for pharmacists to confirm the enrollment of their poorest customers in the Medicare program.
In the weeks since the enrollment problems surfaced, nearly 30 states have said they'd pay for the drugs for those patients until the problems are worked out. The federal government has agreed to help those states recoup their money, going so far as to cover any shortfall that the plans fail to pay.
But it's made no such commitment to pharmacists, who've become the unexpected face of the troubled Medicare benefit.
"They have been on the front lines," Sen. Hillary Rodham Clinton, D-N.Y., testified Thursday. "They have been the ones who have had to tell customers, `I'm sorry, this isn't covered.' ... So I certainly hope we will reimburse the pharmacists."
McClellan stopped short of committing taxpayers' money. "We are going to make sure contracts with the drug plans are enforced, and if there are any difficulties in making payments we will help ensure that the payments do take place," he said.
Some pharmacists, such as Brian Stwalley, co-owner of Continuing Care Rx, which operates six drugstores throughout Pennsylvania, have enough cash reserves to wait until an estimated $250,000 in Medicare claims is paid.
Others, such as Ferlita, aren't so lucky. The National Community Pharmacists Association, which represents more than 24,000 independent pharmacists, recently wrote drug wholesalers asking for payment flexibility for pharmacies that are being squeezed.
Jim Mazzola, a spokesman for Cardinal Health of Dublin, Ohio, one of the nation's largest pharmaceutical distributors, said the problem wasn't widespread thus far. He said requests for flexibility on payments were being handled on a case-by-case basis.
"These are long-standing customers in most cases, and so our interest is in helping with a solution," Mazzola said.
(c) 2006, Knight Ridder/Tribune Information Services.
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