Md. high court upholds Blues' cut in pharmacy fees

January 21, 1995|By John Fairhall | John Fairhall,Sun Staff Writer

Independent neighborhood pharmacists, already a dwindling group, say it will be even harder for some of them to stay in business as a result of a Maryland Court of Appeals decision that upholds a cut in their fees by Blue Cross and Blue Shield of Maryland.

The fee cuts are "devastating," said attorney Joseph S. Kaufman, representing the Maryland Pharmacists' Association and Pikesville pharmacist Phillip Weiner, who filed a lawsuit against the Maryland insurance commissioner's office in 1993.

Pharmacists said reduced fees don't compensate them for the time they take to provide consumers counseling and informational service. "If all I had to do was slap 40 pills in a bottle . . . it would be easy," Mr. Weiner said.

Mr. Kaufman termed independent pharmacists "an endangered species," of which he said there are 300 to 400 left in the state, a third fewer than in 1990. James A. Miller, executive director of EPIC Pharmacies of Maryland, a group of independents, said "there needs to be legislation" to protect them.

The court's ruling Thursday doesn't affect chains such as Rite Aid, Mr. Kaufman said, which are paid under separate contracts.

The decision ends the efforts of the pharmacists' association to fight a fee decrease imposed in 1993 with the approval of the Maryland Insurance Administration.

Blue Cross, the state's largest health insurer, reduced in two ways the amount it pays independent pharmacists for filling prescriptions for subscribers.

Instead of paying the average wholesale price for a drug, as the company had been doing, it began paying that price minus 10 percent, Mr. Kaufman said. Blue Cross also cut the dispensing fee per prescription from $3.30 to $3. The Blue Cross fee structure is now the "standard" among insurers in Maryland, Mr. Weiner said.

The association and Mr. Weiner argued that the insurance commissioner's office, which held an "informational" hearing on the fee cuts before approving them, was obligated to hold a more substantial quasi-judicial hearing at which the pharmacists could have cross-examined witnesses.

When the insurance commissioner rejected this proposal, the pharmacists sued in Baltimore Circuit Court, lost and appealed to the Court of Special Appeals. The Court of Appeals, the state's highest court, instead took the case.

The court said the law didn't entitle the pharmacists to a quasi-judicial hearing and, given that, the court couldn't second-guess the insurance commissioner's decision.

Had the commissioner held the informational hearing a few weeks later, in June 1993, a change in state law that took effect then might have required a quasi-judicial hearing, the court observed. Mr. Kaufman said this could prove useful if Blue Cross cuts fees in the future.

A spokeswoman for Blue Cross said this "ruling confirms the Insurance Division approach, which Blue Cross and Blue Shield supported."

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