A new contract that will ensure Medicaid patients’ continued access to pharmaceutical services on island was recently approved for PHI Pharmacy.
PHI Pharmacy vice president Bruce Cohen disclosed yesterday that the agreement was signed last week after the government made a partial payment on its outstanding obligations.
Due to the CNMI government’s cash-flow problems, its Medicaid program ran out of funds to pay for its local share in the program, incurring millions of dollars in arrears to providers here and off-island.
PHI suspended its services to Medicaid patients in July last year due to the government’s outstanding debt. Saipan Tribune learned that the Medicaid program owed the pharmaceutical firm over $1.5 million, representing two years’ arrears.
Cohen said he recently received a small payment from the Department of Finance with the understanding that regular payments will come next.
Cohen said the new contract was signed by four parties: the company, the Office of the Attorney General, the Finance secretary, and the Medicaid Office. The new agreement takes effect for one year with a provision that regular payments will be remitted to the company on a bimonthly basis. PHI Pharmacy expects regular payments to start by the end of next month.
Cohen said he was elated by the turnout resulting from the signing of the new contract. PHI Pharmacy’s two outlets in Dandan and Navy Hill began accommodating Medicaid patients on Saturday.
According to Cohen, an estimated 400 Medicaid patients visited the pharmacy in just the first four days since the contract signing. Many of them, he said, have been waiting for their medications since June last year. He encouraged more Medicaid patients to visit PHI and get their medications. He also affirmed the company’s commitment to keep medication costs down.
Cohen hopes this development will reduce patient traffic at the hospital’s emergency room, which he said saw a significant increase during the period when services to Medicaid clients were suspended.
Based on the company’s database, there are an estimated 15,000 to 16,000 patients that use Medicaid as their insurance carrier. PHI Pharmacy has been serving Medicaid patients since 1996.
The Medicaid Office earlier disclosed to Saipan Tribune that it owes private medical providers—both off island and on-island—approximately $15 million.
The Medicaid program is designed for low-income individuals and receives funds from both federal and local government through a 45-55 percent matching ratio. The lack of money to match the federal share has been preventing the program from paying all its reimbursements to vendors.