CNMI Pharmacy Stops Services Over Unpaid Medicaid Insurance

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Patients welcome, but Medicaid plan no longer considered

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, June 29, 2012) – Patients on Medicaid will no longer be able to avail of the services of Saipan’s PHI Pharmacy following its decision to stop accommodating clients of the indigent health program until such time that the government pays its delayed reimbursements to the company.

PHI Pharmacy vice president Bruce Cohen confirmed with Saipan Tribune yesterday that effective July 1, the company's outlets will stop accepting patients who use Medicaid as their insurance. He disclosed that the program owes the company in excess of $1 million, representing arrears of more than a year.

Cohen said that Medicaid patients who want to avail of their services would have to pay for their prescription drugs upon pickup.

"Medicaid patients are still welcome at PHI, but they have to pay for their prescription. The decision is due to lack of reimbursement by the Medicaid program," Cohen told Saipan Tribune.

Based on the company's database, there are an estimated 15,000 to 16,000 patients who may be affected by this suspension of service.

PHI Pharmacy has been accepting and serving Medicaid patients since 1996 and Cohen said this is the first time they will suspend services to these patients.

He said the nonpayment of Medicaid reimbursements for more than a year now has gravely affected the company's operation, resulting in the shutdown of its Kagman outlet starting tomorrow.

Kagman is one of the company's three branches in the Commonwealth. It was open for only a year. It is currently holding a clearance sale until tomorrow, June 30, where it offers up to 75 percent discount of over-the-counter products.

Besides the outlet's closure, Cohen said the company also has to let go of some employees as a result the company's tight financial situation.

After June 30, supplies from the Kagman outlet will be available at their Dandan and Navy Hill outlets.

Cohen said the decision to suspend services to Medicaid patients was made after hearing from the Medicaid program that it has no money to pay for its arrears and that no concrete date has been set as to when the obligation may be fulfilled.

Cohen assured, however, that they would resume services to Medicaid patients just as soon as Medicaid pays them.

"This is a very difficult time for us but we ensure that PHI Pharmacy has an adequate supply of pharmaceuticals for the people of the CNMI," he said.

In April this year, many private dental clinics also suspended their services for Medicaid patients for the same reason-non-reimbursement. The government, which handles the Medicaid program, earlier disclosed that it owes dental clinics $1.6 million.

Medicaid is a federal/state program that requires 55-45 matching funds. Saipan Tribune learned that for fiscal year 2012, the Medicaid program was allocated only $2.4 million, an amount not enough to cover the increasing number of eligible patients under the program.

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