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FINANCIAL ISSUES CHALLENGING SUSTAINABILITY OF RURAL PHARMACIES.

Introduction

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 established the Medicare Part D program to provide outpatient prescription coverage to Medicare beneficiaries. (1) Prior to its implementation in 2006, Medicare beneficiaries who did not have prescription coverage from private plans or Medicaid--one-third of beneficiaries--had to pay out-of-pocket for prescriptions. (2,3) Having to make cash payments at the point of service constituted a significant financial barrier to accessing medications and led to poor medication adherence among these beneficiaries. (4) However, since its implementation, studies have demonstrated decreased out-of-pocket prescription expenditures, improved access to medications and other pharmaceutical services (such as medication therapy management) and increased drug compliance among Medicare beneficiaries. (5-7) While Part D has improved access to pharmaceutical services for many Medicare beneficiaries; the effect on many of their pharmacies has been the opposite. (7) With the implementation of Part D, direct reimbursements from cash paying customers were replaced with lower reimbursements from Part D plans or their Pharmacy Benefit Managers (PBMs)--third party administrators who manage prescription benefits for many Part D plans. (7,8) The lower reimbursements from Part D plans/ PBMs are due to the maximum allowable costs (MACs)--the upper limit for drug reimbursements set by plans/ PBMs--being low relative to the actual cost of drug purchases.(2,9,11) In addition to low MACs, pharmacies are frequently charged direct and indirect remuneration (DIR) fees. (12) DIR fees are essentially "pay to play" fees that Part D plans and PBMs charge pharmacies for being allowed to participate in their network. (12,13) Lower reimbursements (from low MACs and DIR fees) have created some financial challenges for pharmacies. These factors have raised concern about the financial viability of independently owned pharmacies that are more reliant on income from drug sales as their primary source of revenue (compared to chain pharmacies), and are therefore more sensitive to policies that significantly alter reimbursements. (2,7) The increase in the rate of closures of independent, retail pharmacies following the implementation of Part D has been largely attributed to the financial challenges posed by the changes in reimbursement. (2,7)

Rural communities had experienced pharmacy closures prior to the implementation of Part D but the rate of pharmacy closures has increased dramatically since the implementation of Part D. (7,14) An additional 29 independent, retail pharmacies closed per month in rural areas in the two years following the implementation of Part D. (7) A pharmacy in a rural community is more than a place to fill prescriptions. Local pharmacists are an essential part of the rural health care system, providing key services such as counseling residents as prescriptions are filled (including medication therapy management), attending to residents with mild illnesses that can be treated with over-the-counter medications, providing immunizations, and supporting other local providers (e.g., hospitals, skilled nursing facilities, and hospices).(2,14) Rural pharmacists are essential clinicians in programs of chronic disease management, (15) and in delivering public health services. (16) It is worth emphasizing the importance of access to a local pharmacy in rural communities is far more than having a place to fill prescriptions.

The dramatic increase in closures of rural independent pharmacies has slowed in recent years, but the financial viability of such pharmacies remains a concern particularly in the over 660 rural communities that are served by a single independent pharmacy. (14,17) Closures of these sole community pharmacies would severely limit access to pharmaceutical and clinical services for residents of these communities. However, after ten years' experience with Part D plans, the challenge of agreeable terms of reimbursement under Part D contracts may not be the most serious or immediate challenge facing rural pharmacies. Previous work shows that delayed payments and inability to find someone to take over upon retirement have also posed serious challenges to these types of pharmacies. (2,14,18) With all that is at stake in maintaining local access to pharmaceutical services, understanding these challenges is critical to developing policies focused on this essential element of local health services.

This study examines the issues that confront rural pharmacies and how they challenge the provision of services after a decade of Medicare Part D. We focus on pharmacies that are the sole independent retail pharmacy in their community as the communities they serve face the most risk of losing access to many essential health services.

Methods

We conducted an online survey of independent pharmacies that were the only retail outlet (including community, retail, grocery, and clinic pharmacies) in their Primary Care Service Area (PCSA).* We limited this study to only rural PCSAs, defined as a PCSA composed entirely of ZIP Code Tabulation Areas with Rural-Urban Commuting Area (RUCA) codes of 4.0 or higher. Eligible participants were identified using the National Council for Prescription Drug Programs (NCPDP) Pharmacy Database (June 2014 edition) and the Primary Care Service Areas database (2010 edition) maintained by the Dartmouth Atlas of Health Care. (19,20) The NCPDP database contains information on over 70,000 pharmacies in the United States with active NCPDP numbers, a pharmacy provider identifier used in billing third-party payers. (2,7) Information available in the NCPDP database includes the pharmacy's physical location (including the ZIP code), ownership type (i.e. independent, chain etc.) and dispenser type (i.e. retail, mail order etc.). We matched pharmacies to their PCSA using their ZIP code location. A total of 643 independent pharmacies that were the only retail outlet in their PCSA were identified.

Key informants (including faculty in the University of Iowa, Department of Pharmacy Practice and Science and several rural pharmacists) were interviewed to develop a questionnaire about the ten most important issues perceived to threaten pharmacy sustainability. The survey instrument measured respondents' perception of the magnitude and immediacy of the challenge posed by each issue using a 4-point rating scale. This scale ranged from very small to very large for the magnitude of the challenge and not immediate to very immediate for the immediacy of the challenge. The survey also contained open-ended questions asking respondents to provide any additional information on challenges their pharmacies face. In addition, respondents were asked about their role in the pharmacy, its geographical location, and proximity to the next, closest retail pharmacy. We conducted a pilot test of the survey with local rural pharmacists and developed a final survey instrument based on feedback from the pilot test (see Appendix).

E-mail addresses for 430 of the 643 identified pharmacies were obtained from the National Community Pharmacists Association. Initial survey participation invitations were e-mailed June 28, 2016, and follow-ups were sent July 12, 2016. The study protocol was submitted and found exempt from human subjects review by the University of Iowa Institutional Review Board.

Results

A total of 118 pharmacies responded to the survey (response rate: 27%). The vast majority (85%) of respondents owned and practiced in the surveyed pharmacies (Table 1). For most pharmacies (84%), the next closest retail pharmacy was over 10 miles away. For a little over half of those pharmacies, the closest retail pharmacy was over 20 miles away. Respondents were located in each of the four census regions with the Midwest region having the largest share (47%) of respondents.

Generally, issues that were considered to be more challenging were also perceived as being of more immediate concern and vice versa (Figure 1). Two of the ten issues focused directly on reimbursement: the timeliness of changes to MACs, and DIR fees charged by preferred network drug plans. Those issues were identified as the most challenging of the ten issues. All respondents rated delayed MAC adjustment as a large or very large challenge, and 80% said it is a very immediate challenge (Table 2). Similarly, all but two respondents (98%) rated DIR fees as a large or very large challenge and a moderately immediate or very immediate challenge. The next-highest-rated challenge was competition from mail order pharmacies with 92% of respondents rating it as a large or very large challenge while 89% said it was a moderate or very immediate challenge. Somewhat related and consistent with our previous findings related to pharmacy closure and significant challenges to rural pharmacies, (2,17) the next-highest-rated challenge was exclusion from the networks of Medicare Part D plans, with 88% of respondents rating that as a large or very large challenge and 89% saying the challenge was either very immediate or moderately immediate.

Other issues were less impactful and immediate, but in the context of providing pharmacy services directly to local residents, including Medicare beneficiaries, two stand out. The first was handling the needs of more complex patients resulting from the growth in the elderly population--rated as a large or very large challenge by 76% and a very or moderately immediate challenge by 63% of respondents. The second challenge was not being reimbursed for providing clinical services, said to be a very large or large challenge by 64% and a very or moderately immediate challenge by 58% of respondents.

Open-ended responses

Most (64%) respondents provided answers to at least one of the two openended questions. Although the responses to these questions varied, three key areas emerged: challenges posed by payer practices (plan/PBM), reimbursements, and other issues.

Payer practices: Respondents cited the "unfair competition" from payerowned/affiliated mail order and chain stores as a major challenge. PBM practices such as restricting their preferred networks to chain stores and mail order companies, charging patients higher co-pays for using an independent pharmacy rather than mail order, and requiring patients to switch to mail order (among other "aggressive" practices) were perceived as creating an uneven playing field that gives mail order and chain stores an unfair competitive edge. This uneven playing field was reported as having contributed significantly to the declining finances of rural independent pharmacies. Respondents also mentioned that mail order was "a real detriment to patients' health" as it splinters care and serves "as a source of confusion" to many patients. One respondent also mentioned that the mail order pharmacy practice of auto-refilling prescriptions often leads to waste, as many patients end up with medications that have been changed or discontinued.

Other PBM practices that respondents felt were posing a challenge to their pharmacies included "predatory audits," excessive "number of

prior authorizations required" before filling prescriptions and withholding reimbursements based on a patient's non-compliance with medications. One respondent felt that such withholding was unfair since they could only ensure that patients got their prescriptions but had very little control over whether they took their medications. This respondent also indicated that "patients are beginning to feel intimidated by PBMs and pharmacies calling them and telling them they aren't taking their meds appropriately."

Reimbursements: MAC pricing was a major source of concern for respondents as it was "hurting" their "bottom line every day." Respondents noted that MACs were often below the actual cost incurred in purchasing and dispensing the drug. One respondent stated that "nearly 10% of my prescriptions are reimbursed from PBM's under my actual cost to buy the medication, and nearly 80% are under my cost to dispense the prescription." Respondents also reported that MAC pricing "is not updated often enough" and even when updated, the adjustment is not retroactive and the price is still "set too low." Respondents were also concerned about the MAC appeals process. They reported that these processes were slow and changed frequently and that appeals were frequently denied. One respondent said that "PBMs deny 99% of all appeals."

Respondents viewed DIR fees charged by PBMs as a major challenge to the financial sustainability of their pharmacies. They cited the upward trend in these fees, the "undefined" nature, and lack of "transparency" in the determination of these fees. Respondents also expressed concern that payment of reimbursements was often slow. In addition, they expressed concern about the low, and in many cases lack of, reimbursement for clinical services rendered by their pharmacies, such as blood pressure checks and medication therapy management.

Other issues: Respondents mentioned that contracts with payers were "typically take it or leave it" as independent pharmacies lacked any "bargaining power." As a result, they end up with contracts that do not "compensate for actual work done on a prescription" and clauses that allow PBMs "to change pricing at their discretion" or "require a certain, high, unattainable 'generic dispensing rate'." One respondent suggested the formation of "a coalition of some sort" that would provide "leverage to negotiate contracts."

Respondents indicated that they were unable to afford their wage bills due to the decline in their incomes. Thus, they have had to lay off workers, cut store hours, and overwork the remaining staff. One respondent mentioned that this situation has been made worse by "certification requirements for technicians and support personnel" which make it even more expensive to recruit and retain these personnel. Inadequate supply of "qualified" workforce in rural areas was also cited as a hindrance to recruiting and retaining workers and has equally led to overworking existing staff.

Another challenge that respondents identified was what they described as excessive government regulations. They argued that these regulations had reduced patient's access to their services, "impeded care collaboration in rural areas" as well as pharmacy operations and patient care. One respondent stated that existing regulations hinder them from delivering services to patients during their seasonal travels. Another pointed out that they were spending more time complying with regulations than providing actual care. Respondents were also concerned that "government policies made in the last ten years have been geared towards large providers" to the exclusion of small independent pharmacies. One respondent indicated that the newly insured under the ACA have had a negative impact on reimbursements while another wondered why rural pharmacies could not get different reimbursement rates like their critical access hospital and rural clinic counterparts. Another respondent expressed concern that government funding of certain pharmacies (e.g. federal government funding of pharmacies that have been contracted by Native American tribes) was providing these pharmacies with an unfair competitive advantage. On the other hand, respondents called for increased regulation of the PBM industry including requiring them "to contract with any-willing-provider," citing a lack of oversight of the industry as being the reason for their poor treatment of independent pharmacies.

On baby boomers, one respondent indicated that these challenges "magnify as the baby boomers reach retirement age and fill the Medicaid/Medicare programs."

Discussion and Conclusion

Results from this survey suggest that the major challenges facing rural pharmacies from Part D implementation revolve around the inability to generate positive net revenue from the sale of prescription medications. The combination of delayed MAC adjustment and DIR fees results in pharmacies losing money on many of the prescriptions filled. Comments from respondents further supported these fiscal difficulties. Financial challenges have made it difficult for many of these pharmacies to remain open, and a number of them are on the verge of closure. As one respondent put it, "I am afraid it is too late to be conducting this study. Our fate is already set, and it is just a matter of time before we all go under." Many also expressed concerns about the future of their pharmacies, as declining profitability was making it difficult to find buyers or successors willing to take over their pharmacies upon retirement.

Looming closures without replacement of rural pharmacies suggest that an estimated 3 million rural residents are at risk of losing the only pharmacy in their community. (17) For many of these individuals, the nearest pharmacy is over 10 miles away.(17) This geographical barrier to accessing pharmacy services is exacerbated for individuals who are unable to travel that distance (e.g., low-income and elderly).(17) Such individuals' only remaining choice may be to use mail order pharmacy services, which lack the enhanced services that face-to-face consultation provides (such as medication reconciliation) that is important to providing quality pharmacy services.

The main limitation of our study is the low survey response rate. The low response rate leaves room for the possibility of non-response bias if respondents and non-respondents differed on characteristics related to the magnitude and/or immediacy of the challenges studied. For instance, if pharmacies that were experiencing greater challenges were more likely to respond to the survey than those who were not. The possibility of non-response bias in our study limits the generalizability of its findings.

In conclusion, closures of rural independent pharmacies would significantly limit access to services for rural residents, especially those most vulnerable and likely to need the services. In addition to timely (i.e., same day of prescriptions written by local clinicians) and convenient filling of prescriptions, losing local access weakens the rural health care delivery system because of loss of other clinicians engaged in medication therapy management, advising patients regarding over-the-counter medications, chronic disease management, and public health services. Public policies could ameliorate fiscal stress for rural independent pharmacies by focusing on MAC and DIR, adjusting costs and payments for at least this group of vulnerable pharmacies. Another, not mutually exclusive, policy consideration would be to facilitate alternative means of delivering quality pharmacy services to these rural communities, such as tele-pharmacy.

Acknowledgements

We acknowledge the support of the National Community Pharmacists Association for their assistance in distribution of the survey instrument. This project was supported by the Federal Office of Rural Health Policy (FORHP), Health Resources and Services Administration (HRSA), U.S. Department of Health and Human Services (HHS) under cooperative agreement/grant #U1C RH20419. The information, conclusions and opinions expressed in this policy brief are those of the authors and no endorsement by FORHP, HRSA, or HHS is intended or should be inferred.

NOTE

*For an overview of Primary Care Service Areas (PCSAs), see Goodman, D., et al. Primary Care Service Areas, https://www.hrsa.gov/advisorycommittees/shortage/Meetings/20110118/MeetingMaterials/primarycare.pdf (accessed 2/21/2017)

REFERENCES

(1.) The Medicare Part D Prescription Drug Benefit. 2014; http://files.kff.org/attachment/medicare-prescription-drug-benefit-fact-sheet. Accessed 03/11, 2015.

(2.) Radford, A., Mason, M., Richardson, I., et al. "Continuing Effects of Medicare Part D on Rural Independent Pharmacies Who Are the Sole Retail Provider in Their Community," Res Social Adm Pharm. 2009;5(1): 17-30.

(3.) Schneeweiss, S., Patrick, A. R., Pedan, A, et al. "The Effect of Medicare Part D Coverage on Drug Use and Cost Sharing among Seniors without Prior Drug Benefits," Health affairs (Project Hope). 2009;28(2):w305-316.

(4.) Zhang, Y., Lave, J. R., Donohue, J. M., Fischer, M. A., Chernew, M. E., and Newhouse, J. P. "The Impact of Medicare Part D on Medication Adherence among Older Adults Enrolled in Medicare-Advantage Products," Med Care. 2010;48(5): 409-417.

(5.) Yin, W., Basu, A., Zhang, J. X., Rabbani, A., Meltzer, D. O., and Alexander, G. C. "The Effect of the Medicare Part D Prescription Benefit on Drug Utilization and Expenditures," Ann Intern Med. 2008; 148(3): 169-177.

(6.) Lichtenberg, F. R., and Sun, S. X. "The Impact of Medicare Part D on Prescription Drug Use by the Elderly," Health affairs (Project Hope). 2007;26(6): 1735-1744.

(7.) Klepser, D. G., Xu, L., Ullrich, F., and Mueller, K. J. "Trends in Community Pharmacy Counts and Closures before and after the Implementation of Medicare Part D," J Rural Health. 2011;27(2): 168-175.

(8.) Pharmacy Benefit Managers (PBMs) 101. http://www.ncpa.co/pdf/leg/novl2/pbm_one_pager.pdf Accessed 05/18, 2017.

(9.) The Need for Legislation Regarding "Maximum Allowable Cost" (MAC) Reimbursement, http://www.ncpa.co/pdf/leg/mac-one-pager.pdf. Accessed 05/18, 2017.

(10.) Winegarden, W. "The Economic Costs of Pharmacy Benefit Managers: A Review of the Literature," 2017; http://www.pacificresearch.org/fileadmin/images/Studies_2017/PBM_Lit_Final.pdf. Accessed 08/03, 2017.

(11.) Hemphill TA. "The 'Troubles' with Pharmacy Benefit Managers," Regulation. 2017;40(1):14.

(12.) Medicare Part D Pharmacy 'DIR' Fees-S. 413 / H.R. 1038. http://www. ncpanet.org/advocacy/pbm-resources/lack-of-transparency-and-higher-costs/dirfees/fact-sheet-on-h-r-1038. Accessed 05/18, 2017.

(13.) Frequently Asked Questions (FAQs) About Pharmacy "DIR" Fees. http://www.ncpa.co/pdf/faq-direct-indirect-remuneration-fees.pdf. Accessed 05/18, 2017.

(14.) Ullrich, F., and Mueller, K. J. "Update: Independently Owned Pharmacy Closures in Rural America, 2003-2013," Rural Policy Brief. 2014(7): 1-4.

(15.) Mossialos, E., Courtin, E., Naci, H., et al. "From 'Retailers' to Health Care Providers: Transforming the Role of Community Pharmacists in Chronic Disease Management," Health Policy. 2015;119(5):628-639.

(16.) Scott, D. M., Strand, M., Undem, T., Anderson, G., Clarens, A., and Liu, X. "Assessment of Pharmacists' Delivery of Public Health Services in Rural and Urban Areas in Iowa and North Dakota," Pharm Pract (Granada). 2016;14(4):836.

(17.) Nattinger, M, Ullrich, F., and Mueller, K. J. "Characteristics of Rural Communities with a Sole, Independently Owned Pharmacy," Rural Policy Brief. 2015 (6): 1-4.

(18.) Todd, K., Westfall, K., Doucette, B., Ullrich, F., and Mueller, K. "Causes and Consequences of Rural Pharmacy Closures: A Multi-Case Study," Rural Policy Brief. 2013(11): 1-4.

(19.) Pharmacy Database. 2014; http://www.ncpdp.org/Products/dataQ%C2%AE-Pharmacy-Database.

(20.) PCSA Data Download--2010 (Census Tract Basis). 2010; http://www.dartmouthatlas.org/tools/downloads.aspx?tab=42.

Appendix

Rural Pharmacy Sustainability

This brief survey is being conducted to understand the challenges threatening the financial stability of rural community pharmacies. We are particularly interested in your assessment of the magnitude and immediacy of a number of issues that have been identified as possible concerns to rural community pharmacies.

We hope you will take 10 minutes to complete this survey. Your participation is voluntary and responses will be kept confidential. No personally identifiable information will be associated with your responses in any reports of the data. If you have any questions or comments about the survey, please feel free to contact xxxx xxxxxxx by email at xxxxx@uiowa.edu or by phone at (xxx-xxx-xxxx). We value your input and appreciate you taking the time to complete this survey.

Instructions: For each of the following challenges, please specify the magnitude and immediacy of the challenge for your pharmacy. Thank you for helping with this research project!

Challenge 1: Maximum allowable costs (MACs) are not updated quickly enough to reflect changes in wholesale drug costs.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 2: Employing a sufficient number of qualified staff.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 3: Finding someone to continue operating the pharmacy if I decide to retire or sell the pharmacy.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 4: Greater competition from chain store pharmacies.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 5: Greater competition from mail order pharmacies.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Is there anything else you would like to share with us about any of these challenges that you are facing in your pharmacy?

_______________________________________________ _______________________________________________ _______________________________________________

Challenge 6: Contracting with private entities to receive payment for providing services to Medicaid participants.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 7: Being charged direct and indirect remuneration fees (sometimes known as "DIR fees," "true-up fees," "pay to play fees," or "administrative fees") from preferred network drug plans.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 8: Being a non-preferred pharmacy for Medicare Part D plans.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 9: Not being reimbursed for providing clinical services (e.g., blood pressure monitoring).

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Challenge 10: Handling the needs of more complex patients resulting from the growth in the elderly population.

What is the magnitude of this challenge for your pharmacy?

* Very Small

* Small

* Large

* Very Large

How immediate is this challenge for your pharmacy?

* Not Immediate

* Somewhat Immediate

* Moderately Immediate

* Very Immediate

Is there anything else you would like to share with us about challenges faced in your pharmacy?

_______________________________________________ _______________________________________________ _______________________________________________

Which one of the following statements best describes your role in your pharmacy?

* Owner and practicing pharmacist

* Owner

* Pharmacist

In what state is your pharmacy located?

_______________________________________________

Please estimate the distance to the next, closest retail pharmacy:

* Less than 5 miles

* 5-10 miles

* 11-20 miles

* More than 20 miles

Thank you for completing this survey.

ABIODUN SALAKO

College of Public Health, University of Iowa

FRED ULLRICH

College of Public Health, University of Iowa

KEITH MUELLER

keith-mueller@uiowa. edu College of Public Health, University of Iowa (corresponding author)

Received 17 April 2017 * Received in revised form 4 August 2017

Accepted 5 August 2017 * Available online 28 August 2017

Caption: Figure 1 Pharmacy Issues: Magnitude and Immediacy of Challenge
Table 1 Summary statistics for Respondents (N=l 18)

Characteristic                                  n    %

Role
Owner and practicing pharmacist                99  85.34
Owner only                                      4   3.45
Pharmacist only                                13  11.21
Distance to the next, closest retail pharmacy
< 5 miles                                       4   3.45
5-10 miles                                     14  12.07
11-20 miles                                    48  41.38
> 20 miles                                     50  43.10
Census region
Midwest                                        54  47.37
Northeast                                       9   7.89
South                                          22  19.30
West                                           29  25.44

Table 2 Pharmacy Issues: Magnitude and Immediacy of challenge

Pharmacy issue                                           Magnitude
                                                       Large  Very
                                                              Large

Maximum allowable costs (MACs) are not updated         22.0%  78.0%
quickly enough to reflect changes in wholesale drug
costs
Being charged direct and indirect remuneration fees    18.4%  79.8%
(sometimes known as "DIR fees," "true-up fees," "pay-
to-play fees," or "administrative fees") by preferred
network drug plans
Greater competition from mail order pharmacies         30.8%  60.7%
Being a non-preferred pharmacy for Medicare Part D     29.0%  58.8%
plans
Finding someone to continue operating the pharmacy if  43.6%  43.6%
I decide to retire or sell the pharmacy
Handling the needs of more complex patients resulting  46.0%  30.1%
from the growth in the elderly population
Not being reimbursed for providing clinical services   36.3%  27.4%
(e.g., blood pressure monitoring)
Greater competition from chain store pharmacies        50.0%  15.3%
Contracting with private entities to receive
payment for                                            29.8%  27.2%
providing services to Medicaid participants
Employing a sufficient number of qualified staff       40.7%  12.7%

Pharmacy issue                                         Immediacy
                                                       Moderately
                                                       Immediate

Maximum allowable costs (MACs) are not updated          15.3%
quickly enough to reflect changes in wholesale drug
costs
Being charged direct and indirect remuneration fees     14.9%
(sometimes known as "DIR fees," "true-up fees," "pay-
to-play fees," or "administrative fees") by preferred
network drug plans
Greater competition from mail order pharmacies          22.7%
Being a non-preferred pharmacy for Medicare Part D      28.1%
plans
Finding someone to continue operating the pharmacy if   20.9%
I decide to retire or sell the pharmacy
Handling the needs of more complex patients resulting   30.7%
from the growth in the elderly population
Not being reimbursed for providing clinical services    25.7%
(e.g., blood pressure monitoring)
Greater competition from chain store pharmacies         34.8%
Contracting with private entities to receive
payment for                                             23.9%
providing services to Medicaid participants
Employing a sufficient number of qualified staff        27.1%

Pharmacy issue                                         Immediacy
                                                         Very
                                                       Immediate

Maximum allowable costs (MACs) are not updated           79.7%
quickly enough to reflect changes in wholesale drug
costs
Being charged direct and indirect remuneration fees      83.3%
(sometimes known as "DIR fees," "true-up fees," "pay-
to-play fees," or "administrative fees") by preferred
network drug plans
Greater competition from mail order pharmacies           66.1%
Being a non-preferred pharmacy for Medicare Part D       60.5%
plans
Finding someone to continue operating the pharmacy if    22.7%
I decide to retire or sell the pharmacy
Handling the needs of more complex patients resulting    32.5%
from the growth in the elderly population
Not being reimbursed for providing clinical services     31.9%
(e.g., blood pressure monitoring)
Greater competition from chain store pharmacies          21.2%
Contracting with private entities to receive
payment for                                              27.4%
providing services to Medicaid participants
Employing a sufficient number of qualified staff         14.4%


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Author:Salako, Abiodun; Ullrich, Fred; Mueller, Keith
Publication:American Journal of Medical Research
Date:Oct 1, 2017
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