Thousands of small pharmacies across the country were tapped by the Biden administration last week to stand on the front lines of the coronavirus pandemic and carry out vaccinations.
For each of these mom and pop pharmacies, that has meant investing huge sums of money to purchase freezers for vaccine storage, buying personal protective equipment, acquiring scheduling software, hiring additional staff or shuffling employees around to allow them to run vaccination clinics within their storefronts or in firehouses, parking lots and community centers.
It’s crucial work in slowing Covid-19 infection rates, but there is a growing problem: These small businesses are often not getting paid for the work and costs associated. The reason lies within a decades-old system of medical billing and insurance long left unaddressed by state governments and federal agencies.
If the policies aren’t tweaked soon, these small pharmacies could fall in their efforts to help end the yearlong pandemic.
“My entire career has been a scramble to try to make up the losses because the reimbursement model isn't good or healthy,” said Neal Smoller, who owns the Village Apothecary in Woodstock, New York. “We're doing a tremendous amount of work to provide this vaccine compared to others, and the reimbursement this time should be simple and represent that.”
As the piecemeal rollout of vaccinations continues, the Biden administration moved last week to fully partner with community pharmacies in an effort to reach more Americans.
That was the method used by West Virginia, which has received accolades for its swift rollout compared to other states that focused the majority of their vaccination efforts through central hubs. Small community pharmacies in West Virginia and states such as North Dakota and South Dakota have proven more agile and aware of their customer base, which helps with outreach and community trust.
The issue that pharmacists in 11 states said they have run into, however, is that they’re having difficulty billing insurance companies for their work because many insurance providers do not allow them to file for reimbursement outside of pharmacy benefits. Instead, vaccine dose administration falls under medical benefits.
Pharmacists are typically only allowed to provide certain vaccinations because they are not considered medical providers, but under federal emergency authorizations they are able to administer the Covid-19 vaccinations.
To give a patient two shots of the Pfizer or the Moderna vaccinations, most pharmacies expect between $30 and $40 from insurance companies to cover their bills. Some, however, are just taking on financial losses because of the complexities of the insurance system and the insurance status they hold within it.
“It's a legacy problem,” said Antonio Ciaccia, a senior adviser to the American Pharmacists Association. “We don't really have a seamless integration of pharmacy services into traditional care benefit plans, and we have yet to see any guidance from a number of the plans outside of the Medicaid sector in terms of how they're going to handle this.”
A problem of benefits
Those who have private insurance typically have two insurance cards: one for their prescriptions that they use at the pharmacy, and one for their medical benefits that they use at their doctor's office. The former is for products or prescription drugs, like insulin or pills to treat high blood pressure. The latter is for a service — a doctor’s visit, a vaccination or a medical procedure, for instance.
For decades, those lanes have run parallel to each other, but in recent years the distinctions have begun to blur. As hospital systems have consolidated, rural medical centers have closed and private practices have disappeared, pharmacies are often the only health institutions left in some communities.
The United States is expected to face a shortage of up to 55,200 primary care doctors and 139,000 total physicians by 2033, according to the Association of American Medical Colleges’ 2020 workforce projection. Pharmacists argue that — with more than 186,000 community-based pharmacists situated in towns across the country — they can help shore up the gaps in health care access.
Many said they are already serving in that role. They just aren’t being paid for it.
“There are a few pharmacies that I do know that are actually billing on the medical side,” said Dirk White, who owns Harry Race Pharmacy, which has helped vaccinate residents of Sitka, Alaska. “But they're really breaking trail, so to speak, for all the rest of the profession. They are very few and they're the unicorns in our profession.”
Recognizing this as an issue, the Ohio Legislature unanimously passed a law in early 2019 that gave pharmacists provider status, allowing them to bill to patients’ medical benefits and circumventing some of the insurance company bureaucracy.
Two years later, the state and Ohio pharmacies are still negotiating an agreement with private insurance companies that would make pharmacists eligible providers within their networks. The state’s Medicaid program, meanwhile, is already on board.
“I’m not surprised it’s taking a long time, but I was hoping we’d get there by now,” said state Sen. Matt Dolan, a Republican, who introduced the bill. “It’s hard to know how much the pandemic has slowed things down. I’m not making excuses, but Medicaid did their due diligence. I would’ve hoped private insurance would have moved a little quicker.”
The biggest roadblock they’ve run into, pharmacists said, is billing the vaccination to disparate private health plans. Each filing, in some ways, is a unique negotiation with a different company’s bureaucracy.
That has already become frustrating for some, but the floodgates haven’t opened yet. As most states are currently only allowing those above the age of 65 to receive the vaccination, pharmacists have typically only had to deal with Medicare. Once states move to the next stage of the vaccination rollout, pharmacies will have to juggle a greater number of private health plans, as well as those without any insurance at all.
The National Community Pharmacists Association has put up a link on its website for pharmacists to report Covid-19 vaccination billing issues.
Kurt Proctor, the association's senior vice president of strategic initiatives, said they’ve only received about 40 reports so far, but he also reiterated that most pharmacists have only had to deal with Medicare or Medicaid so far. They expect a lot more complaints once the greater public starts getting their Covid-19 shots.
“It’s really when you get into the commercially covered plans that there’s a lot of variance whether it’s a prescription benefit or a medical benefit,” he said.
It gets even more complicated, though. Health systems and employers who provide the insurance plan may make changes to the coverage plans. Pharmacy benefit managers, which oversee prescription drug plans for insurance companies, might have different requirements for different clients.
“The commercial market is where this gets the most challenging,” Proctor added.
‘It’s a lot for very little’
Among pharmacists right now, figuring out how to carry out vaccinations without sinking their business is a professionwide effort.
Smoller, who owns the pharmacy in Woodstock, New York, has created “a quick and dirty course” to help colleagues across the country learn how to get vaccination clinics off the ground without losing their heads within the administrative details.
“A lot of these guys don’t know how to use Excel or do all the data submission, appointment scheduling and infrastructure building. It’s a massive undertaking, and that’s just the business side,” he said. “On the clinical side, you have the certification with the CDC and our state governments to handle this particular process, get our staff up to speed on how to store the vaccines — it’s big,” he said, referring to the Centers for Disease Control and Prevention.
But even those who know their way around billing are frustrated.
Abby Rice runs two pharmacies, Ward Drug and Moffet Drug, in two small Kansas towns that both have fewer than 3,000 residents. She has been vaccinating patients for weeks now and anticipates that she’ll receive more doses in the coming days as part of the recent Biden administration effort.
“At times, we just eat those claims,” she said of private insurance vaccinations. “Let's be honest here, the work on the back end, as far as the time you put in for the reimbursements, it’s a lot for very little.”
Some have said, however, that they simply can’t take on the potential financial drag of the vaccinations. It’s too much of a risk because of the potential reimbursement issues.
Download the NBC News app for full coverage of the coronavirus outbreak
Small pharmacies nationwide have faced a growing financial challenge, as they face rising prescription costs and the financial squeeze from chains like CVS — a company that along with Walgreens has a separate and direct private contract with the federal government for vaccine distribution. In comparison, the margins really aren’t there for independent pharmacies to take on much of a monetary burden.
“It’s got to be economically feasible,” said Mike Koelzer, a pharmacist in Grand Rapids, Michigan, who runs Kay Pharmacy, which decided not to pursue vaccinations. “If you're not making much money from it, you probably don't want to do it long term. If you are making a lot of money on it, the problem is, is how long will this last and how much will the model suddenly change without warning?”
‘We just didn’t do anything about it’
Pharmacists said it would be difficult to continue vaccinating for long without support and consistent reimbursement. But they, as well as experts, noted their unique position within their communities to administer vaccine doses, provide medications, track records and conduct tests.
Giving them provider status — even temporarily as proposed in various coronavirus stimulus bills, such as the Health, Economic Assistance, Liability Protection and Schools Act proposed by Sen. Mitch McConnell, R-Ky., over the summer — would better position pharmacies to respond to the nation’s health crisis and serve their local communities.
“It's kind of a no-brainer to keep giving them more responsibility, especially when we have such a fragmented public health system and such an overburdened medical system right now,” said Gigi Gronvall, senior associate at the Johns Hopkins Center for Health Security. “They’re accessible, they're in the communities, they have stronger networks within these communities, they are there for advice and they often have a more complete picture of what patients are being prescribed and their medical records.”
Gronvall, who has spent the pandemic examining the development of Covid-19 testing and the national strategy surrounding its rollout, and other Johns Hopkins researchers noted in a 2017 report that leveraging pharmacies would be the best way to bolster the public health system in the U.S. and help remedy some of the issues of access, especially during an emergency.
The researchers noted that pharmacies have often been on the front lines in the past during health crises. Whether it was the emergence of a new virus, the surge of the opioid epidemic in the U.S. or medical challenges created by a natural disaster, pharmacies have often had a center role.
The issue is that they weren’t always compensated for it.
“Some pharmacies have reported that they have been unable to obtain reimbursement from insurance companies for some services provided during emergency responses, particularly if those services are outside the scope of their normal authorized operations,” the report said.
The report warned that to fully optimize the partnerships with pharmacies, planning would have to begin “well in advance of a crisis.”
“This will probably be another one of those things that falls into the ‘Oh, we thought about this ahead of time, but we just didn't do anything about it’ category,” Gronvall said.