More than 170 Arkansas pharmacies will receive nearly $3.7 million in federal funds, pending approval from a legislative committee, as reimbursement for unpaid insurance claims covering COVID-19 treatments between March 2020 and May of this year.
The Performance Evaluation and Expenditure Review (PEER) subcommittee of the Arkansas Legislative Council approved the funding request from the Arkansas Pharmacists Association on Tuesday. The full council is expected to vote Friday to distribute the money, which comes from the state’s allocation of American Rescue Plan Act funds received in 2021, originally more than $1.5 billion.
The federal Health Resources and Services Administration (HRSA) had a $20 billion program to cover COVID-19 testing, treatment and vaccine costs for uninsured Americans during the pandemic, but the program ran out of money in March 2022.
Pharmacies nationwide then developed backlogs of unpaid insurance claims, especially for administering monoclonal antibodies to treat COVID-positive patients, Arkansas Pharmacists Association CEO John Vinson told lawmakers.
“I don’t know of a single provider in any state for an uncompensated monoclonal antibody injection that got paid through HRSA, even though it was supposed to be eligible,” Vinson said.
In a June 23 letter to Gov. Sarah Huckabee Sanders detailing the funding request, Vinson said 110 pharmacies throughout Arkansas were authorized to administer monoclonal antibodies in 2021 at the urging of the Arkansas Department of Health, in response to the infectious Delta variant of COVID-19.
These pharmacies, mostly in rural areas, administered antibodies to more than 20,000 Arkansans, “reducing death and hospitalizations by 70-85%,” Vinson wrote.
“This effort has not been without financial, mental and physical stress on an already taxed system of patient care,” he wrote. “This is a workforce issue with many pharmacies struggling to maintain staffing and having to reduce hours available for patient care.”
Kyle Lomax, CEO of Southern Pharmacy in Northeast Arkansas, said providing antibodies to COVID patients at the pharmacy’s Jonesboro location reduced the burden of care on the “overwhelmed” local healthcare systems.
Southern Pharmacy is eligible for $44,842 in ARPA funds, $28,545 of which is designated for the Jonesboro location, according to data Vinson provided state officials.
Additionally, De Queen Health & Wellness Pharmacy in Southwest Arkansas is set to receive $291,870 in ARPA funds. Owner Chester Barber said he is grateful for the impending reimbursement.
“Had we not been able to receive the unpaid-claim monies, my pharmacy would have been really put into a tremendous financial strain,” Barber said.
Arkansas Pharmacists Association ARPA request data
“Sacrificial lamb”
The De Queen pharmacy was in a unique position during the height of the pandemic because Sevier County, where De Queen is the largest city, did not have a hospital from 2019 to 2022. The former hospital closed when its out-of-state owner was charged with Medicaid fraud, and a new hospital opened just north of De Queen in December 2022, partially with the aid of ARPA funds.
The lack of a hospital made COVID-19 vaccinations and treatments all the more important to the area, Barber said. The pharmacy he and his two children run was “inundated” with people from the area seeking vaccinations and antibodies throughout the pandemic, and the high demand led to increased supply and labor costs for the facility, he said.
“It was a very trying time,” Barber said. “The billing aspect of [healthcare] kind of got pushed to the side as we tried to save people’s lives, especially through the Delta variant as we tried to get them in and get them treated.”
In March 2022, HRSA notified pharmacies that the program to cover uninsured COVID-19 treatments was running out of money. Lomax and Barber both said they only had a few days’ notice to submit claims to the federal government for reimbursement.
Some of Barber’s claims did not meet the deadline, and some of the ones that did were not reimbursed because HRSA ran out of money, he said.
Former Gov. Asa Hutchinson urged uninsured Arkansans to seek COVID-19 treatments, saying they would not have to pay for them, but this was not always true if patients’ insurance policies were out of date or had unpaid deductibles, Barber said.
“Pharmacies were put out there as the sacrificial lamb for free COVID treatments for Arkansans,” he said.
Gov. Sarah Huckabee Sanders’ administration had to “be brought up to speed” on ARPA funding requests after Sanders took office in January, which slowed the process of the pharmacies’ request reaching state lawmakers for approval, Barber said.
Hutchinson set up an ARPA steering committee in 2021, and Sanders dissolved it in January.
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Aid for rural hospitals
Pharmacies received COVID-19 vaccines and monoclonal antibodies from the federal government for free. The planned reimbursements will not cover pharmacies’ COVID-related labor and supply costs, but they will offset them, Lomax and Barber said.
“We had to invest a lot of infrastructure and treatment and protocol to make sure we protected not only our patients from exposure [to COVID], but our employees too,” Lomax said.
In addition to HRSA, insurance companies from outside Arkansas also did not pay COVID-19-related claims, Andy Babbitt, deputy director of the state Department of Finance and Administration, told PEER members on Tuesday.
The Arkansas Pharmacists Association worked with the state finance department to determine the reimbursable amounts for each eligible pharmacy, Vinson wrote in his letter to Sanders.
Babbitt told lawmakers that pharmacies will have to reimburse the state for ARPA relief funds if HRSA or insurance companies ever reimburse them for the existing claims.
State Sen. Missy Irvin, R-Mountain View, said she was frustrated with the unpaid insurance claims, especially since several rural hospitals have been waiting months for ARPA funds in light of their pandemic-related expenses. Three rural hospitals, including the one in Sevier County, have received ARPA funds from the state.
“I’m ready for the money to get to the hospitals,” Irvin said. “We’ve dragged our feet long enough, and we cannot create an un-level playing field.”
The PEER subcommittee on Tuesday also approved a yearlong extension of a contract with the consulting firm Alvarez and Marsal, which evaluated 18 rural hospitals in 2022 to determine whether they were eligible for ARPA financial relief. The state initially hired the firm to help legislators decide how to prioritize hospitals’ requests for the state’s dwindling ARPA funds.
The state will pay the firm more than $1.8 million in ARPA funds for a year’s worth of continued work evaluating rural hospitals.
Irvin said she hopes Alvarez and Marsal will consider unpaid insurance claims in their considerations of hospitals’ eligibility for financial aid.
