The supermarket pharmacy world was jolted this spring when the Medicare prescription discount cards were launched.
Confusion about the dozens of card offerings, consternation about rising drug prices, and inconsistency in program information ultimately came down to the store-level relationship between pharmacist and Medicare beneficiary.
That meant time and money as pharmacy staffs explained the cards to their customers and took the time to process as many discount options as it took to get seniors the best possible deal on their prescription drugs.
Some retailers met the challenge head-on with information sessions and, in some cases, their own cards. Others made do with lesser resources.
Almost all food stores are accepting the plans "hoping to capture that initial wave of new business from Medicare beneficiaries," said Ty Kelley, director of government relations, Food Marketing Institute, Washington.
The burden on pharmacies has varied. H. E. Butt Grocery, San Antonio, has aggressively marketed the program and a card it co-sponsors with ScriptSave in community outreach drives. Its 75,000 enrollees have saved 17% on branded drugs and 28% on generics, a chain spokesman said.
Pharmacies are helping seniors choose a card, confirm prices, and compare discounts with savings available from state programs, manufacturers' cards, and other sources. A pharmacy might be processing 40 different Medicare cards in helping consumers chose the best card for each drug they use. This takes up the pharmacists' time and adds to costs by way of electronic transmission fees.
"Typically, a senior comes into the store with three or four different cards," said Vincent Mainella, vice president, pharmacy, Price Chopper Supermarkets, Schenectady, N.Y. "They hand them over like a deck of playing cards and ask, 'Which one is lower?' We have to process each card to determine if the drug is on the formulary, and what the senior will pay."
Most of the Medicare cards simplify beneficiary access to manufacturers' drug discount programs through "wrap-around" provisions where cardholders are automatically enrolled to receive additional discounts, such as after the $600 subsidy is used up. "This has made it easier to coordinate benefits" and ties card users with discounts they might not have been using, said Dan Renick, director of pharmacy operations at Buehler Foods, Jasper, Ind.
"We are providing the cardholders with up-to-the-second accuracy on costs. We have to link each of their medications with the plan that provides the best deal for them," Renick said.
Price Chopper steers seniors to its own Senior Advantage Card program that provides drug discounts of 20% to 80%, which are deeper than discounts offered by the Medicare cards. The chain launched the senior card in April, along with a Prescription Advantage Card it is marketing to small businesses. It has promoted the Pharmacy Care Alliance card sponsored by National Association of Chain Drug Stores, both in Alexandria, Va.; and the Express Scripts, St. Louis, card only to those qualifying for the $600 transitional assistance.
Seniors programs in New York, Connecticut and Pennsylvania offer "much better deals" than cards for flat co-pays of $12 to $16. Yet state programs have mandated that clients apply for a Medicare card and use that benefit first. "We bill the Medicare card first, then the state, which picks up a portion of the co-pay. The patient is charged the rest," Mainella said.
The card benefit portends new pharmacy traffic, but lower profits on cards controlled by prescription benefit management companies. Card sponsors are required to obtain manufacturers' discounts and pass a share of those rebates through to cardholders. While pharmacy reimbursements vary from card to card, they are accepting less than what they would make selling the drug at the usual price.
"The reimbursement is comparable to what we make in any managed plan. We are more concerned about how we can help the patient reduce the cost of their drugs," Renick said.
While many card users are realizing significant savings, others don't always get the discounts they find through research because prices posted online are sometimes incorrect and change by the week, according to supermarket pharmacy directors.
"The seniors don't know how much they will pay, and we don't know how much it will cost until we process their cards in the store," Mainella said.
"The prices at Medicare.gov are not accurate. It is impossible for the pharmacy benefit management companies to keep up with the prices with so many contracts, regions and changing drug costs," he added.
"People are coming in expecting a 15% discount off a drug, and that is not necessarily what they are getting," said David Meador, director of pharmacy at Dierbergs Markets, Chesterfield, Mo.
Though enrollment is growing at some chains, seniors have not flocked to use the interim benefit. They're faced with the challenge of shopping for discounted drug prices offered by 68 national and regional competing private card plans for Medicare enrollees.
"We are seeing steady enrollment. The prices are certainly better than what they were paying. And with the slow economy, many employers are dropping or reducing retiree coverage," Renick said.
Seniors shopping at Buehler Foods, which promotes the Community Care Rx card sponsored by National Community Pharmacists Association, Alexandria, Va., are saving from 2% to 20%, and more when they accept generics. Three percent of the chain's pharmacy customers are using the cards, including former cash-paying customers, which had totaled 15% before the program started, Renick said.
"We are not hearing many questions from seniors about the cards. Some are not sure they are taking enough drugs to justify the enrollment fee," said Bob Passavanti, director of pharmacy at Coburn's, St. Cloud, Minn., which is advertising the PCA card.
Some seniors are sticking with prescription discount plans for the uninsured offered by companies like AdvancePCS, Irving, Texas; and ScriptSave, Tucson, Ariz., when cards are not covering the drugs they use or their preferred pharmacy isn't in a network, said Jim Weinert, director of pharmacy at Brown & Cole Stores, Bellingham, Wash., where card usage has been minimal.
"The usage is far below what they had thought it would be. I think this is too complicated for the average joe," Meador said.
As of October, 4.4 million seniors had cards, half of which were automatically enrolled by Medicare Advantage managed care plans and state drug assistance plans. Over 10 million of the Medicare-eligible lack drug insurance. The Center for Medicare and Medicaid Services had projected 7.3 million would enroll.
Some seniors feel the card program is either too complex to be worth the trouble, or it doesn't help enough with their particular drug expenses, the Kaiser Family Foundation and Harvard School of Public Health found in a survey.
Sixty percent of seniors said they didn't plan to sign up, the survey said. Only 10% had used the 1-800-MEDICARE support line, and just 4% had visited Medicare.gov, which provides a tool for comparing drug prices by drug card and pharmacy, and calculating savings. Seventy percent said they had never been online.
"We have to make people understand that these cards do work,"said said Mary Ann Wagner, president, PCA. "Many of our cardholders are people who do not have any other drug coverage. It is especially important to enroll the low-income people by the end of this year so they can qualify for the 2004 $600 subsidy."