Walgreens, Other Pharmacy Chains May Withdraw From State Workers’ Compensation Program
Pharmacy chain Walgreens on Tuesday said it would stop participating in the state workers' compensation program unless the Legislature increases reimbursement rates by March 1, the Orange County Register reports (Johansson, Orange County Register, 2/4). Last year, the Legislature passed a workers' compensation reform package that included a provision that linked the fee schedule for prescription drugs in the program to the Medi-Cal reimbursement rates (California Healthline, 9/15/03). The provision is intended to cut workers' compensation costs by about $4 billion per year (Kasler/Furillo, Sacramento Bee, 2/4). Previously, the Legislature had approved a 5% reduction in Medi-Cal reimbursement rates for pharmacies as part of the fiscal year 2003-2004 budget to save the state $115 million (California Healthline, 12/17/03). If Walgreens withdraws from the state workers' compensation program, claimaints would have to pay cash for their prescription drugs and seek reimbursement from their employers' workers' compensation insurance carrier. According to Carl Michelotti, chief executive of the California Pharmacists Association, the new fee schedule cuts by about 25% reimbursement rates for pharmacies for workers' compensation claims.
Sav-on pharmacies, which operates 547 stores in California, already requires injured workers to pay for their prescription drugs in cash and later seek reimbursement from employers' workers' compensation insurance carriers. Longs Drugs ha said it will take similar action unless the Legislature passes SBX4 10, a bill sponsored by Sen. Bob Margett (R-Arcadia) that would partially restore reimbursement rates for prescription drugs under the state workers' compensation program, aalthough the rates would remain 10% less than 2003 levels (Sacramento Bee, 2/4). The bill would raise rates by 10% for brand-name medications and 20% for generic drugs (Orange County Register, 2/4).
Pharmacy chains say the cost of filling workers' compensation prescriptions is higher than the cost of filling Medi-Cal prescriptions because of the "red tape" involved with workers' compensation, according to the Bee (Sacramento Bee, 2/4). Michael Polzin, a Walgreens spokesperson, said, "We don't get enough to cover processing. It doesn't make sense to be in that business when you are losing money" (Orange County Register, 2/4). Justin Matheson, Margett's chief of staff, said, "We're trying to avoid a crisis where nobody can get their medications, or if they can get them, they have to pay out-of-pocket, and injured workers for the most part can't afford it." Sen. Richard Alarcon (D-Van Nuys), who sponsored the workers' compensation reform legislation passed last year, said, "I believe it's illegal for [the pharmacy chains] to take retail prices and force them on workers' compensation customers." Tom Rankin, president of the California Federation of Labor, AFL-CIO, called for an investigation by the attorney general's office into the pharmacy chains' actions. Vince Solitto, a spokesperson for Gov. Arnold Schwarzenegger (R), had no comment on Margett's bill or the drug stores' actions (Sacramento Bee, 2/4).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.