Drugstores Give Shots, Then Wait for Payback

Drugstores Give Shots, Then Wait for Payback
Scott Pace is a pharmacist, a lawyer and co-owner of Kavanaugh Pharmacy in Little Rock. He also has his own pharmacy staffing company, Pace Management LLC. (Karen E. Segrave)

Don’t get the idea Arkansas pharmacists are harping about long waits for fees on coronavirus vaccinations, even though some drugstores have waited weeks and even months for reimbursement of administrative costs of about $35 a shot.

Like patients, the pharmacists have had their sleeves rolled up.

Independent drugstores and chains like Walmart and Walgreens led the vaccine attack in Arkansas, providing 72% of all injections so far, according to John Vinson, CEO of the Arkansas Pharmacists Association. Doctors’ offices, hospitals, clinics and other outlets have combined to deliver the remaining 28%.

“We have much higher demand by Americans choosing to go to their local pharmacy for convenience and ease of access for the COVID-19 vaccine, far more so than they do for flu vaccine,” Vinson told Arkansas Business. “A few years ago, about 25% of all flu shots were received in a community pharmacy, with others getting vaccines from their employer on site, in a physician’s office, a hospital or elsewhere.

“The COVID-19 vaccines, which were purchased through federal contracts and then distributed either through a federal retail program or local health departments, were something people wanted to get from their pharmacies,” Vinson continued. “Three times as many COVID vaccines [as flu vaccines in a typical year] have been provided through community pharmacies. These pharmacies are proud of the accomplishment.

“Yes, there have been hurdles to getting the administrative fee to our members, but there is a great deal of pride in the accomplishment.” More than half of vaccinated Arkansans got their shots through independent community pharmacies, Vinson said.

Arkansas lags behind many states in COVID vaccines per capita, with 48.4% of its 3 million residents fully vaccinated. But steady work by the pharmacies and other health outlets has raised the percentage who have had one shot or more to 58% of Arkansans, according to figures from the Mayo Clinic.

As vaccine figures have risen this fall, COVID-19 cases have fallen in Arkansas, from a seven-day rolling average of nearly 2,300 cases on Aug. 19 to a weekly average of 430 last week.

Leader in NWA

Carl Collier, owner of Collier Drug Stores of Fayetteville, said his operation in northwest Arkansas bought a deep freeze for the Pfizer vaccine even before the shot was approved. “We’ve taken a lead in this. Collier’s has managed giving 80,000 shots,” said Collier, who has eight locations. “We’re the leader in this area, and proud of it.”

He said convincing vaccine resisters has been a bigger headache than slow reimbursements, even for a drugstore trusted for more than a century. M.M. Collier, Carl’s grandfather, opened a pharmacy on Fayetteville’s town square in 1917. The family’s flagship store has been a Dickson Street fixture since 1950, and Carl began working there as a boy, dusting shelves long before becoming a pharmacist in the 1970s.

Still, that’s no guarantee people will listen.

“We talk to churches, civic groups, all sorts of people, and a lot of them have bought into hoaxes about the vaccine, which is safe,” Collier said. “It’s the safest and best vaccine ever. We know it is; we’ve given 80,000.”

As for reimbursement, the drugstore owner said he’s accustomed to slow repayment. “We have to re-run claims, they’re lost and you have to refile. It’s the same commonly with pharmacy benefit managers, any excuse for them to keep their money longer and have us wait.”

The reimbursements come from three main sources — one for Medicare and Medicaid patients, another for those with private health insurance and a third for recipients with no insurance at all. “If we do a flu shot, our payment expectation is about 14 days within normal terms,” Collier said. “With a COVID shot, you’re looking at 30 to 60 days,” and that is for patients with insurance.

Shots for the uninsured, unsurprisingly, are the hardest to collect on promptly, said Scott Pace, a lawyer, pharmacist and co-owner of Kavanaugh Pharmacy in Little Rock. He detailed the three-track process to repayment.

Headaches and Red Tape

Shots for insured patients are first submitted through their carriers, and Medicare and Medicaid claims filter through those programs. But reimbursements for shots to the uninsured or underinsured go through a program of the federal Health Resources & Services Administration, a branch of the U.S. Department of Health & Human Services. HRSA selected a vendor to operate the reimbursement program, one that was already widely known to pharmacists: OptumRx, the pharmacy benefits manager for United Healthcare.

“There’s a process of asking the government to assign the uninsured person an ID number, then you have to turn around and bill the fees through a medical clearinghouse and figure out if it actually gets paid some weeks or months down the line,” Pace said. “They’re looking to see if the patient has any other commercial insurance that could pay for the administration fee.”

Some of the red tape involves getting patient ID numbers for uninsured patients, but those numbers can expire, leading to delays as the government issues new ones.

Vinson told Arkansas Business that the fee the government returns to pharmacists has settled at about $35 a shot after starting closer to $15. As the number of shots mount, so do pharmacists’ expenses in staffing, paperwork and medical waste disposal.

“It’s a strain to do all this and not be compensated quickly, and it’s definitely a hurdle for small-business,” Vinson said. “In the grand scheme of things, the number of uninsured people isn’t large, because of expansions in Medicaid and Medicare and commercial insurance in our state. It’s less than 10%. But considering the number of shots, it’s a big deal. I don’t want to say it isn’t, but it hasn’t stopped our providers from providing the service.”

Vinson said one pharmacy in northwest Arkansas had administered shots to the uninsured without seeking reimbursement through HRSA. “They just internally decided it wasn’t worth the headache, and they would just do those vaccines for free and write them off.”

Drugstores are compensated for the time it takes to schedule, administer and document every shot, and notably for the cost of biohazard waste disposal.

“When you inject a needle into someone’s arm, you can’t just throw that in a regular trash can; you have to put it into a biohazard waste container,” Vinson said.

The cost stuns most people, he said. “It’s pretty expensive. I could have a really small sharps container, the size of a shoebox, and that can cost as much as $60 per shoebox to destroy properly under federal regulations.”

The Labor Market

Pace said that pharmacists, like almost all employers, have higher payroll expenses and problems with retaining workers these days in a competitive labor market. Devoting employee time to the vaccine effort without compensation would particularly hurt, he said. “Everybody is struggling to find employees right now, costs are up, and when you’re dealing with downward reimbursement pressures, that certainly doesn’t help.”

Pace, who preceded Vinson as CEO of the Pharmacists Association, is a partner in Impact Management Group of Little Rock and runs his own pharmacy staffing and management firm, Pace Management LLC. He hopes the reimbursement issues will soon be a fleeting memory, and that Arkansans will continue to get the vaccines.

“It’s just a new process, and I’m very hopeful we’ve made strides since January of this year on the administration side as it pertains to the uninsured,” Pace said. “I hope that most of this will be worked out in the coming months.”