Berthoud business facing a 'David vs. Goliath" battle
By Dan Karpiel
In an example of how even a well-intentioned piece of legislation can have adverse, unintended consequences, Berthoud Drug and owner Joshua Jones are in the midst of what Jones calls a “David versus Goliath” battle.
Jones was invited to testify for the Colorado State House Committee on Health and Insurance regarding House Bill 20-1078. The legislation, if enacted, would bring visibility to fees and fines levied on small pharmacies like Berthoud Drug by the Pharmacy Benefit Managers, or PBMs.
“From my perspective, yes it went well,” Jones said of his testimony before the House committee. “Some of the committee members that voted ‘no’ last year voted ‘yes’ this year but there are still more hurdles; this was step one of 20 but this was progress and we’re moving in the right direction.”
Over the last decade, as part of some reforms to the Medicare program, small pharmacies can be fined by PBMs, such Express Scripts, CVS/Caremark, Humana and others should patients miss a dose of a prescription and refill it after the predetermined deadline. The intent of the legislation was to assure that patients are taking medications prescribed, thereby assuring that Medicare dollars were being used as intended – to provide positive outcomes for patients who have conditions such as high blood pressure, high cholesterol and diabetes. The intent was to focus on outcomes rather than just on how many prescriptions were being filled.
However, over the last several years, Jones explained that the PBMs found a way to use some loopholes in the law to boost their profits and do so on the backs of small, family-owned pharmacies like Berthoud Drug. Jones explained that Berthoud Drug is currently faced with about $4,000 per month in these fees charged by the PBMs.
As Jones explained, if someone forgets to take a dose of their medicine one day, something that even he, as a pharmacist, is guilty of, the small pharmacy can be fined by the PBM and to make matters worse, the fines often come well down the road, many months afterward, blindsiding the small business. In 2019, Berthoud was levied with a $40,000 fine. Making matters even worse, Jones explained, the fines came out of the blue, which causes serious disruptions to business planning and budgeting.
“It is our job to educate the patients, we understand that, we do that every day, we know that’s a piece of the job,” Jones said and added that if the pharmacists can determine why there was a delay in refilling their prescription, they are better equipped to provide patient care.
“The point of the bill isn’t even to change the fines, it’s to move the fines to where we can see them,” Jones said of HB 20-1078. “Right now, they blindside us, we don’t know they’re coming, we don’t know anything. It makes it very hard to plan, to budget stuff like that. We’re not asking for more money; we just want to keep what they give us in the first place and not come to take it six months later.”
Getting blindsided, as Jones called it, by these fines and fees months down the road make it very difficult for small companies like Berthoud Drug to hire additional employees, add to inventory, and budget for the future, as it is extremely difficult to predict when and where these fines and fees will happen.
“At the end of the day, unfortunately, a lot of it boils down to money when it comes to the government and these insurance companies and how all of that ties together. The insurance companies make it very convoluted and very hard to understand. Trying to explain that to a legislator is tough,” said Jones.
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