As state budget negotiations continue, pharmacists from Harlem to the Hudson sent a letter calling on Gov. Kathy Hochul and the NY State Legislature to avoid enacting regulations that could harm the operation of independent pharmacies.
A little-known policy provision in the proposed budget language would create new regulations, fees, and liabilities for pharmacy services administrative organizations, or PSAOs. These organizations provide back-of-house administrative and compliance services for independent community pharmacies.
As the pharmacists write in their letter, “all of these time-consuming tasks could take away from our ability to serve our customers. That is why we choose to work with PSAOs. They take substantial administrative burdens off our plates so that we can focus squarely on patient care.”
The full letter can be found below:
Dear Governor Hochul, Senate Majority Leader Stewart Cousins, and Assembly Speaker Heastie:
RE: Executive Budget Health & Mental Hygiene Article VII (S.4007A/A.3007) Part Y Subpart B – Registration of Pharmacy Services Administrative Organizations
Small, independent pharmacies are crucial community partners, bringing quality and affordable healthcare services to our neighbors from near and far. Our customers have come to expect personal attention from our caring and dedicated staff, and we pride ourselves on being part of the fabric of our community and public health.
We rely on Pharmacy Services Administrative Organizations (PSAOs) to achieve our core functions. These critical administrative partners help independent pharmacies like ours serve our patients and allow us to focus on their health. Running a small pharmacy is a lot of work. We must coordinate with large pharmacy benefit managers (PBMs) and insurance companies, comply with government regulations, and keep back-of-house administrative affairs in order. These time-consuming tasks could take away from our ability to serve our customers. That is why we choose to work with PSAOs. They take substantial administrative burdens off our plates so that we can focus squarely on patient care.
As you can imagine, we are concerned that provisions within the Executive and Senate’s 2024 FY Budget proposals would impose onerous registration requirements on PSAOs, treating them as if they were PBMs. However, from the independent pharmacist’s perspective, this couldn’t be further from the truth. PSAOs do not serve the same function as PBMS. They are simply back-office service providers without influence over prescription prices or patient insurance coverage. The Assembly’s budget language does not include this provision and we hope that the final budget proposal does not as well.
We support more transparency in the healthcare supply chain. However, that must be brought forward with a thorough understanding of the supply chain itself. Suppose New York lawmakers target PSAOs without understanding the crucial support they provide businesses like ours. In that case, we may see even more independent pharmacies close their doors, impacting patients’ ability to access crucial healthcare services.
Thank you for considering our concerns and hope that you will leave the above-mentioned provisions out of the final budget.