While major provisions of the Affordable Care Act (ACA) remain slated to start in January 2014, the Obama administration in recent months has announced 1-year delays for the large employer mandate and two aspects of the Small Business Health Options Program (SHOP) marketplaces. As implementation of the health care reform law progresses amid uncertainty, pharmacies must contend with many changes that could affect their bottom line.
This article, second in a Pharmacy Today series, looks at key moving parts set in motion by ACA with business implications for pharmacies.
Regarding the expected jump in patients and their prescriptions in 2014, pharmacists have much to consider as some states expand Medicaid and open enrollment for SHOP and individual health insurance marketplaces (also called exchanges) begins October 1—but the people who would have been covered by the employer mandate now will not be covered for another year.
“The idea behind the Affordable Care Act is that health care entities, and in this case pharmacies, were going to have a larger pool of population that were going to be insured [with] coverage, right? And consequently, there were either going to be more services that they were going to get paid for or they were going to lose less money because more people were covered by insurance,” said Lee Rosebush, PharmD, JD, MBA, MS, Counsel at Baker & Hostetler LLP. “We may see some of the states, for example, lower some of the [Medicaid] reimbursement” because of state budget limitations, he continued, “but there may not be as many scripts coming through there and covered underneath the employer-mandated patients.”
The National Community Pharmacists Association (NCPA) emphasized the opportunity for pharmacies to provide patient care services. “The rollout of the state and federally facilitated exchanges as well as expanded Medicaid-eligible populations in some states will result in an influx of new patients—some of whom may have never had health insurance,” NCPA told Today. “There is still uncertainty as to what pharmacy provider networks will look like in these marketplaces, but independent community pharmacies are eager to provide pharmacy care services to these individuals.”
While not tied specifically to 2014, ACA’s accountable care organizations are changing the payment paradigm with a focus on care teams and quality.
Many factors are in play for pharmacy employers and their employees. In those states expanding Medicaid in 2014, one factor is that pharmacies may be expected to fill “more prescriptions at a lower reimbursement, so the volume has to make up for the difference,” Rosebush predicted. “It’s going to hurt small independent pharmacies … and a lot of the pharmacists at the big chain pharmacies. … They’re going to put more stress on their pharmacist. Now instead of filling 200 scripts, they may fill 300 scripts a day. And that’s the fatigue factor at that point. … Consequently, pharmacies could see potential increases in liability and workforce-related expenses.”
Then there’s the postponement to 2015 of the mandate for employers with at least 50 full-time workers to provide insurance and of the two features of SHOP marketplaces known as employee choice and premium aggregation. The employer mandate delay was announced on the U.S. Treasury Department website in a July 2 blog post. The big pharmacies may have “straight-up savings” because they “don’t have to purchase insurance now for this first year,” but they also may not have that employer-mandated patient population, according to Rosebush. That said, most large employers already offer health insurance, so it’s the chains with a lot of part-time workers such as Kroger, Kmart, Sears, Target, and Walmart that may be affected.
On May 31, CMS released a final rule for the SHOP marketplaces, where small employers will be able to buy health coverage for their employees, that delayed both the requirement that SHOPs let small employers offer their employees a choice of health plans and the related premium aggregation function. “For the 33 states in which the federal government runs the [SHOP] exchange, there will be only one insurance choice,” said James L. Lindon, PharmD, PhD, JD, of Lindon & Lindon LLC. At this time, NCPA could not definitively say what the participation levels of pharmacies would be in the SHOPs, but was in the process of surveying NCPA members.
ACA’s small business health care tax credit will cover 50% of the premiums that eligible small business pharmacies pay to cover their employees in 2014.