Pharmacists strapped by Medicaid budget problems

Pharmacies have been notified by Nevada's Division of Health Care Finance and Policy their Medicaid payments will be delayed until July 9.

The delay could mean financial hardship for some, according to Loreen Hautekeet, manager of Mike's Pharmacy in Carson City.

"The state Medicaid program paid us through June 6," she said. "In my case, the delay means a loss of $12,000 to $18,000. As a small-business owner, I'll have to take money out of savings to meet my bills. For a big organization like Longs Drugs, $18,000 is a drop in the bucket. To me, it's my livelihood.

"I'll do whatever is necessary to keep this business afloat," she said. "But we can't do this indefinitely."

Kirk Wentworth, pharmacist and owner of The Medicine Shoppe in Carson City, said 78 percent of his overhead is paid twice a month to pharmaceutical wholesalers for drugs. Right after that payment, his cash flow is at its lowest.

"It may be just a week delay, but we depend on that cash flow to meet our current obligations," Wentworth said. "When we don't pay our wholesaler on time, our drugs are more expensive. That affects profits. A few pennies each day makes a huge difference.

"This has never happened before, and it could be devastating for some pharmacy businesses," he said. "Some pharmacies may have to borrow short-term to cover their shortages, but we have a hard time borrowing because our budgets are getting thinner."

Wentworth said profits in the pharmacy business have dropped with decreasing reimbursements from Medicaid and Medicare. Medicaid patients make up about 10 percent of his business, and every year, he must increase his volume to maintain his profit margin.

So far, he's won that battle. He said his volume has increased significantly since The Medicine Shoppe moved to 1851 N. Carson St.

"I have to keep growing, or I won't survive," he said.

Charles Duarte, director of the Division of Health Care Finance and Policy, said every effort was made to accurately estimate the money needed to finance their budget. But pharmaceutical costs have exceeded all projections, and Medicaid funding for drugs is being withheld, pending legislative approval.

In-patient hospital costs were 12 percent, physician payments 13 percent and pharmacy costs 10.5 percent more than the April projections used to determine the budget.

"We made the best estimates we could," he said. "The Legislature gave us the money requested, plus $11.6 million in supplemental funding to carry us through fiscal year, but we had a spike in utilization.

"In early July, we'll have the budget authority, and the message is the claims will get paid," Duarte said.