Citing "Unreasonable" Reimbursements, CVS Drops Two Health Plans.

WOONSOCKET, R.I.--(BW HealthWire)--Sept. 24, 1997--Citing "unacceptably low" reimbursement levels, CVS/pharmacy announced it will not participate in two health plans, ChoiceCare Corporation, of Cincinnati, and Health Insurance Plan of Greater New York.

Revco pharmacies in the Cincinnati area will no longer fill prescriptions covered by ChoiceCare effective Jan. 1, 1998. Revco pharmacies will stop filling prescriptions covered by HIP effective Nov. 1, 1997. CVS acquired Revco in May, and has been reviewing Revco managed care contracts as part of the integration of Revco. CVS pharmacies stopped filling HIP-covered prescriptions April 1, 1997.

"CVS has made great progress in lowering health care costs and improving care," said Fred McGrail, director of corporate communications for CVS. "But the reimursement levels offered by these plans were unreasonable and we simply could not accept them."

Pharmacy has been proven to be both effective and cost-effective therapy, McGrail said. "There are other points in the health care system which must be looked at for cost savings," he said. "The reimbursements for prescription services have gotten so low that it makes no sense economically."

CVS is one of the leading pharmacy chains in the country with approximately 4,000 stores in 24 states and the District of Columbia. Annual sales for CVS and Revco combined exceed $11 billion in 1996.

CONTACT: CVS/pharmacy

Fred McGrail, 401/765-1500