Opinion: Lawmakers Need to Correct Confusion Created by Legislation on Pharmacy Services
By Crystal Lennartz
The writer is the vice president and general manager of Health Mart Atlas, a pharmacy services administrative organization.
Few things are more confusing to the American public than health care. Navigating insurance, high costs, ever-changing rules and regulations — the list of concerns for the average patient are legitimate and daunting.
So, it is no surprise to see Maryland lawmakers committed to increasing transparency within our health care system, especially in the face of a global health crisis. However, the same complexities that can confuse and frustrate our patients can sometimes lead to misguided legislative proposals.
In 2020, the state legislature was well-intentioned when it passed HB 978. Lawmakers rightly sought to create more visibility into the prices patients pay for medications and help Maryland’s community pharmacies survive in today’s health plan-controlled environment. But as currently drafted, the law confuses two supply chain entities — pharmacy services administrative organization (PSAO) and pharmacy benefit manager (PBMs) — and holds PSAOs accountable for the role PBMs play, threatening unintended consequences.
With minor amendments to clarify the role each plays, we now seek to change the law created by HB978, and better achieve more transparency within drug pricing and empower our community pharmacies just as the law intends.
A PSAO is an administrative liaison hired by community pharmacies to increase efficiencies and performance and to help these small businesses navigate complexity within the pharmacy benefit marketplace. Our role is strictly to assist pharmacies with daily back-of-office responsibilities, including engaging with PBMs, executing PBM contracts on the pharmacy’s behalf, understanding pharmacy performance against PBM specific requirements and other important operational needs.
For example, throughout the COVID-19 pandemic, PSAOs have been a reliable resource for pharmacies. With many challenges and new responsibilities posed by the virus and a continuous influx of patients, PSAOs have been there every step of the way, helping pharmacies to adapt, like working with PBMs to ensure pharmacies are getting reimbursed for the COVID-19 vaccines and tests they administer.
While patients do not deal with PSAOs directly, they do benefit from PSAO services. With the help and expertise of a PSAO, pharmacies may have greater access to payer networks to serve patients in their community. Most importantly though, PSAOs give pharmacists more capacity to service patients and improve clinical outcomes.
If it were not for PSAOs, pharmacists could be forced to sit behind a desk for much of the day, filing paperwork, organizing multiple contracts and communicating with various parts of the health care supply chain.
Despite the confusion, PSAOs are not PBMs. PSAOs do not have any sort of influence over the price patients pay for medication at the pharmacy counter, and they certainly do not dictate a patient’s network access.
PBMs, on the other hand, determine which medications are covered by a health plan or formulary, how much a pharmacy will be reimbursed for dispensing medications and where a patient’s insurance will be accepted. As a result, PBMs have significant influence within the prescription drug market, and it has largely gone unnoticed until very recently.
As lawmakers continue working to improve our health care system, I hope they will remain open to learning more about all of the intricacies, including the differences between PBMs and PSAOs. It has been encouraging to see legislators willing to address confusions created by HB978, and I hope others will follow their leadership.