How many Iowa pharmacies hold contracts with Medicaid managed-care companies?

With federal officials on their way to Des Moines this week to conduct readiness reviews on the state's decision to shift its $5 billion Medicaid system to four private, out-of-state companies, it will be key for the managed-care organizations to prove they have adequate provider networks set up in time for the Jan. 1 launch date.

Data released Thursday by the Iowa Department of Human Services showed that the managed-care organizations - Amerigroup Iowa, AmeriHealth Caritas Iowa, UnitedHealthcare Plan of the River Valley and WellCare of Iowa - still have a ways to go in securing contracts with many types of providers.

But one provider type stood out - a huge number of pharmacies have joined the managed-care organizations' ranks.

Amerigroup has contracts with 99.6 of the state's 747 pharmacies, AmeriHealth has contracts with 90 percent, UnitedHealthcare with 79 percent and WellCare with 100 percent.

However, noted Kate Gainer, the chief executive officer of the Iowa Pharmacy Association, 'That number is misguiding but not inaccurate.”

That's because pharmacy contracting is unique when compared with other medical providers, she said. Pharmacies use a middleman called a pharmacy benefit manager - or a PBM. PBMs work with insurance companies to manage drug costs as well as drug manufacturers and individual pharmacies to negotiate prices.

PBMs typically make money through charging a service fee. And Gainer said the county's three largest PBMs influence 80 percent of all American's prescriptions, which is why the Iowa Pharmacy Association has made increasing transparency and regulation of PBMs a legislative priority for the past several years.

She went on to explain that while the four managed-care organizations have contracts with PBMs and the PBMs have a network set up of Iowa pharmacies, the pharmacies do not have specific Iowa Medicaid contracts signed with the managed-care organizations.

'We're working with the governor's office on how contracts could and should look,” Gainer said, adding she believes Iowa pharmacies are 'close to a resolution” but she does not yet know what reimbursement rates will look like.

Gainer said the group will have a representative present at Monday's Legislative Oversight Committee meeting in Des Moines with state legislators, which will have presentations from the four managed-care organizations, and DHS as well as a public comment period.

Hy-Vee - which has the largest number of pharmacies in its eight-state trade area of Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, South Dakota and Wisconsin - would not directly comment on managed-care contracts or reimbursement rates.

'We continue to pay close attention to the issue and are in communication with state officials and pharmacy benefit managers,” said Tara Deering-Hansen, a spokeswoman for Hy-Vee. 'We are analyzing the proposed changes and won't know their full impact until all contracts are presented.”

The federal Centers for Medicare & Medicaid Services officials still need to put a final stamp of approval on Iowa's Medicaid transition plan.