Prescription for disaster

Independent pharmacists are struggling to pay their bills after doling out free emergency medicines to Medicare Part D patients who were not completely covered by their health plans.

“We’re just having an awful problem,” said Curtis Robinson, owner of Robinson’s Apothecary in Northeast.

Pharmacies, including Mr. Robinson’s, reported last month that nationwide computer glitches in systems used by health insurers have forced them to give Medicare patients free medications while the problems are resolved.

The pharmacy, which made all of its roughly $270,000 in revenue last year from prescription-drug sales, gave out a couple hundred dollars worth of medications to patients who experienced problems initially getting their drugs through the Medicare drug benefit, Mr. Robinson said.

The drugs for 12 Medicare patients who couldn’t pay are expected to cause a cash-flow crunch for the business because it will take weeks for health insurers to send reimbursements, Mr. Robinson said.

“Some of [the patients] got a 30-day supply while others got just a few pills,” he said.

The pharmacy will not give out any more emergency medications to patients, he said.

“I worry about that,” he said, adding he may have to turn away some beneficiaries this month.

Small pharmacies nationwide gave out on average 45 emergency medications to Medicare patients during the first two weeks of the program that started Jan. 1, according to the National Community Pharmacists Association.

In response, the Alexandria trade group for 24,350 independent pharmacies last week sent out 300 letters to drug wholesalers, manufacturers and health insurers, pleading with them to give pharmacies “flexibility” in paying their bills in the next few weeks.

“There is certainly a willingness to help. But we are not seeing an overwhelming response to those letters,” said Chief Operating Officer Douglas Hoey.

The $84 billion industry, which makes about 3 percent in pre-tax profits, depends on 92 percent of its sales to come from prescription drugs, Mr. Hoey said.

“The margins are so slim that even a few weeks behind payments can be devastating to these small businesses,” he said.

For some pharmacies, the free prescriptions problem has been compounded with late reimbursements from the government and health insurers.

Michael Kim, the newest owner of Grubbs Care Pharmacy and Medical Equipment in the District, said his business is barely breaking even because of the Medicare debacle.

The pharmacy gave away five to seven days’ worth of supplies in the first two weeks of the Medicare program, he said, adding that he was uncertain how many free drugs were distributed.

On top of the lost revenue, Mr. Kim said insurers have been slow to pay for medications or have paid less than what the pharmacy spent on the drugs.

“I kind of have gotten my head above water a little bit because we got a few checks. It’s enough to get through the bills coming up this week, but we are barely staying afloat,” he said.

Calvert-Arundel Care Pharmacy in Owings, Md., also has been giving out free five- to seven-day supplies to Part D patients who are not correctly covered by their health plans.

It’s a common practice for the pharmacy, said owner and pharmacist Leo Mallard.

But “when Medicare came along, it exploded,” Mr. Mallard said. He declined to say how much his business has given away in emergency supplies.