The targeted take down of small, locally owned, pharmacy businesses is nothing new to Pharmacy Benefit Manager (“PBM”) practices. However, Frier Levitt has noticed a concerning new trend that would have detrimental impacts on certain communities. Recently, PBMs have increasingly gone after rural pharmacies, further alienating communities already considered to be in “pharmacy deserts.” A rural pharmacy is one located in a desolate and remote area and that is one of the only options for the local community. PBMs current practice of targeting rural pharmacies through deceptive auditing tactics and corresponding terminations could cripple an entire community rather than just the business itself. Rural pharmacies must be aware of the bargaining power they possess and the applicable laws that protect their interest in participating in a PBM’s network.
Pharmacy Impact on Rural Communities
The danger in going after rural pharmacies is evident when considering how much the community relies on these businesses for basic healthcare needs. Unlike urban areas, rural communities are more likely to rely on their local pharmacies for medical advice, care in preventing medication errors, and vaccination needs. This type of care is not attainable through online pharmacies that deliver medications with little to no interaction with a pharmacist. Where urban communities are overwhelmed with the volume of urgent care centers and available healthcare providers, residents of rural communities or pharmacy deserts often rely on pharmacists as the most accessible healthcare professional available. In these communities, patients seek out medical advice that patients in other communities receive from readily available alternative sources. Additionally, these communities are often more vulnerable, experiencing higher rates of poverty, food scarcity and chronic health conditions. Removing pharmacies from these communities would be devastating to the community and the patients.
PBM Terminations of Rural Pharmacies and Available Tools
Unfortunately, PBMs are not taking a break on rural pharmacies. Instead, they are using the same tactics as those used to eventually terminate pharmacies in urban and suburban areas. Although these communities are greatly impacted by the loss of a pharmacy business, they will be able to turn to other available options as to avoid interrupting their healthcare and obtain necessary medications, unlike the rural communities. These tactics not only deplete the pharmacies of vital resources, but that impact trickles down to all patients seeking to obtain medications, vaccines, or medical advice from the pharmacies.
PBM abuse of rural pharmacies has not gone unnoticed by federal and state legislators. In response to these tactics, applicable laws require PBMs to maintain certain levels of network adequacy, which includes an analysis of the population to pharmacy ratio. Federal network adequacy standards require health plans to provide a sufficient number of providers for enrollees to choose from. Likewise, a number of states have enacted laws to ensure sufficient network adequacy exists in state regulated health insurance plans. The state network adequacy standards focus on the geographical location of pharmacies in each network and the existence of alternative options for healthcare in the community, a consideration that has an impact on the survival and wellbeing of rural residents. As such, rural pharmacy providers may be enabled with the power to leverage these protections in the face of abusive PBM tactics and combat PBM terminations.
How Frier Levitt Can Help
Frier Levitt attorneys are well versed in deceptive tactics used against pharmacies by PBMs as well as the tools available to rural pharmacies to combat such practices. Frier Levitt recognizes how important it is to protect pharmacies located in pharmacy deserts, often home to populations with no alternatives to healthcare available. Our attorneys combine their knowledge in the protections granted to rural pharmacies as well as the contractual and dispute resolution rights afforded to pharmacies by PBM Provider Manuals. If you have questions or need assistance combatting adverse PBM actions, contact us to speak to an attorney.
