Any Willing Provider Laws: Can You Keep Your Patients from Going to Larger Chain Stores?

Mar 31, 2017Independent Pharmacy Insights, Pharmacy Growth

Have you had healthcare plans calling or sending letters to your customers informing them that they must get their prescriptions filled at a larger chain store? Are they calling your pharmacy? Some may find this practice alarming but, surprisingly, it isn’t a new tactic. In fact, it’s been in play long enough to cause many local and independent pharmacies to feel the pinch to their bottom line.

Is your pharmacy a specialty provider? You could also be at risk. The practice of using “in-house” specialty pharmacies (SPs) is commonplace with many pharmacy benefit management companies (PBMs). A large percentage of PBMs own or have a controlling interest in in-house SPs, and use their influence to convince health plans to award those pharmacies their lucrative specialty drug program contracts. And, they’re getting more aggressive about obtaining and holding onto those contracts (1).

So, what’s an independent pharmacy to do?

Get Educated on AWP Laws


Independent and community pharmacies have a possible ace-in-the hole to aid them in playing a more active role in customer retention. That ace-in-the-hole comes in the form of Any Willing Provider laws (AWP).

AWP laws (also known as “Any Authorized Provider”) are “laws that require health insurance carriers to allow health care providers to become members of the carriers’ networks of providers if certain conditions are met. These statutes prohibit insurance carriers from restricting, or limiting membership within their provider networks based upon location or other characteristics, so long as a provider is willing and able to meet the conditions of network membership set by the carrier” (2).

Laws can be broad or limited in scope, and can come with some restrictions and regulations. There are twenty-seven states that currently have AWP laws. The state requirements can be viewed here.

Education in Action


Knowledge of local AWP laws can help an organization understand their rights to a level playing field, as well as help formulate a plan of action to retain, win back, or even gain customers.

For example, one independent pharmacy owner in Texas got educated on his state’s AWP law and used that information to hand out flyers to his customers. These flyers informed his customers that, if his pharmacy could meet the requirements put forth by the providers, they may be able to remain customers of his shop, instead of taking their business to one of the big chain stores (3). Though not every patient was able to remain with this independent pharmacy, many of those patients who would have moved their business as instructed, were able to stay on as customers – lessening the impact on the pharmacy’s ability to maintain a profitable business model.

Don’t lose your valued and hard won customers to the larger chain stores if it isn’t necessary. Whether a state’s AWP law can be utilized may vary depending on how each state’s law is written however, one thing remains certain: not knowing what those laws entail puts your organization at a serious disadvantage. But, it’s a disadvantage that, with very little investment of time, may be completely avoidable.

Be sure to follow this blog for more regulatory and reimbursement intel, tips, insights and bulletins that can save you money – all from your partners at AlliantRx.
 
Sources:

  1. http://www.frierlevitt.com/articles/pharmacylaw/pbms-continue-wrongly-exclude-specialty-pharmacies-networks-often-violation-federal-state-law/
  2. http://www.ncsl.org/research/health/any-willing-or-authorized-providers.aspx
  3. http://www.ksat.com/news/small-pharmacies-taking-on-health-care-giants-in-fight-to-stay-afloat