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20120307_Pharmacy-IMG_6129PHARR — Standing inside Daniel Yarritu’s Sam Houston Pharmacy in Pharr, which closed recently, dozens of local independent pharmacy owners said they feared a similar fate as reimbursement fees for Medicaid pharmacy services could make it hard to keep their businesses open.

Joining them were state Sen. Juan “Chuy” Hinojosa and state Rep. Sergio Muñoz Jr. who vowed to work to make changes to the managed-care change that took effect on March 1.

Under managed-care, which was approved to include prescriptions in the last legislative session, Medicaid patients chose an insurance plan from a list of approved companies contracted by the state that in turn pays a set fee to insurance companies for each patient’s coverage, pharmacists said.

Hinojosa said some medications that previously earned pharmacies about $6.35 now pay $1.35.

“It’s impossible to stay in business with that kind of reimbursement,” Hinojosa said, who characterized the contract fees with big companies as “greedy.”

Since March 1, about 10 local pharmacies have closed due to the change. Pharmacists said about a dozen other of their colleagues are considering or are near the brink of closure.

As pharmacists close their businesses, many will seek jobs at other pharmacies, leaving students studying pharmacy without a job, said pharmacist James Olivarez, a part owner in Richard’s Pharmacy.

“What about the community as a whole,” he asked. “If I were to close the businesses with three stores, we’d leave 25 to 30 employees without jobs. Where would they go?”

Olivarez predicted the unfair rates would have a dramatic affect on the local economy.

Health and Human Services spokesperson Stephanie Goodman told the Texas Tribune that they conducted a “readiness review” to alert pharmacists of the upcoming changes, but Olivarez said there wasn’t sufficient time to prepare.

“They didn’t tell us how drastic the rates were going to be,” he said.

Olivarez predicted his pharmacy could lose out on thousands of dollars annually based on these new rates.

“How are we supposed to make payroll,” he asked. “We’re supposed to make profit. They never gave us a fair contract, it was ‘Take it or leave it.’”

John Calvillo, owner of Med Aid and president of the Rio Grande Valley Independent Pharmacy Association, said pharmacists also worry about the patients they serve, many of them lower income patients who have no access to mass transit. He said pharmacies deliver hundreds of medications a day to patients all across the Rio Grande Valley. Specialty services that local independent pharmacies now offer may be a thing of the past as companies look to save money they’re losing on Medicaid reimbursements.

“The shift of the money flowing out of the state needs to stop,” Calvillo said of contracts made with companies out of Texas. “They’re taking the money out of the Valley and out of my pocket.”

The association has 165 independent pharmacies as members in the Valley.

Muñoz, who held a meeting with medical professionals recently in Mission, said he would work with Hinojosa to hold companies accountable on the contract rates given to pharmacies to work toward reasonable and equitable rates.

Yarritu’s pharmacy, still stocked with medications and still receiving phone calls from patients likely trying to get a prescription filled, predicted the unfair rates would soon have a trickling effect and come after physicians next.

“These aren’t numbers that fell out of the sky, this is fact,” he said. “Their rates just do not work.”

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