Let me ask you this question in the same example: If there were no 25 copay and the independent pharmacist would just 252 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 get AWP minus 15 from Rite Aid plus $1.25.
So he or she would get $85 plus the $1.25, but it would come directly from you.
In this scenario, you actually only pay 80 plus $1.25 because they got 5 from the public employee when they walked in and got their prescription.
Right. And the City paid us less than the $69 fee because, remember, at 2.50 --
To 65. The copay has a number of purposes, and one of them is cost-shifting from the plan to the participant.
But doesn't the fact that you've set that $1.25 for -- what do you call that fee?
Dispensing fee. 253 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 That you have control over that, doesn't that mean that, very largely, the economic fate of the independent pharmacist is in your hands?
What he said was he's being -- independent pharmacies are being squeezed.
Well, what's -- what's -- what's -- what's -- I can't analyze for all the --
What was the federal or State level that you were citing before? Is there a dispensing fee?
I don't know the rate at the moment. I think it's under challenge, as a matter of fact.
Well, was it -- I never thought it was intended that Rite Aid, or whoever the contracting company with the City would be, would have the power by itself to set the dispensing fee because it just gives them 254 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 enormous weapon; whether they use it or not may be a different matter, but it gives them an enormous element of control.
We -- independents are, if you will, invited into the -- the network is open and independents are told that they can participate and this is the rate at which you will be reimbursed.
Hmm. Just to make sure I ask all the questions that I wanted to ask, and I think I asked you this before, but I want to make sure. You were going to get me some information, your sales information and percentage breakout between your pharmacy revenues and what 255 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 we'll call everything else for your stores here in Philadelphia. I think I may have asked you that.
It is approximately 50/50 at the moment, the difference between the pharmacy revenues and what we call an front end.
But you didn't know what the -- I think you didn't have the actual figure.
Right, you didn't know what your revenues or sales were for 1997 for your stores, I think, in the first place.
In the retail industry, Lord & Taylor, the department stores have a figure based upon what revenue is produced per square foot. And each segment of clothes, the petites, the other sizes and other things, you 256 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 know have a dollar-figure attached to them and that's how they their make decisions as to whether they're going to maintain a spot for these kinds of clothes. From what you've said now, this tiny area, the pharmacy -- I'm talking of Champlost -- must be an enormous producer of value for that little space because if it is one -- well, maybe it's 1/20th of the space in the Champlost store. I'm just estimating, it could maybe 1/30th, maybe it's 1/15th, I'm not sure, but it's a tiny area physically of the whole operation there. It must be a tremendous revenue producer by the standards used by the rest of the retail industry. Does the pharmaceuticals use that method of calculation? I understood it was generally in all the retail fields.
One reason is because Lord & Taylor doesn't have professional pharmacist that they have to pay. We have to pay a professional pharmacist in that small part of the space.
You mean the 257 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 expenses of operating that --
Speaking of the pharmacist, given the fact that we have one of the premiere pharmacy and science schools in the City, if you could get me information on the 96 stores and some detailed data about the demographic makeup of your pharmacists by way of gender and race as well as store managers, the same information. But I'd also be intrigued to know how many of the pharmacists actually come out of the Philadelphia College of Pharmacy and Science. We have another one of these customer-service matters that you've come to know and enjoy during the course of this hearing. One of one of our staff members got a letter from Eagle Management recently saying that their request for prescription drug reimbursement had been rejected for the following rejection code reasons, numbers 9 and 10. 9 - the reference prescription number was previously paid by Eagle Managed Care; and 258 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 - the amount submitted reflects your copayment, which is not reimbursable through Eagle Managed Care. Now, I was kind of intrigued by this, given the fact that the prescription amount was $57.16. It could or could not be considered some kind of maintenance prescription. And we are left perplexed as to why, if a person's in our prescription drug program, why wouldn't you pay for the prescribed drug. I mean it's got a -- it's from a doctor, it's got a DEA number, it's got everything that seems to make it walk, talk, and sound like a prescription. Why wouldn't you pay for it?
If you would share with me, again, the reason. I thought that the code that you read -- and I don't know it by a number -- said that we had already paid for the prescription, that the prescription had already been paid for.
Well, from what I can tell from this paperwork, you may have paid for one a few months ago.
I'd be happy to look into 259 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 it.
Okay, all right. We'll make sure. Just for the record, as we talked about the technological advances of the Rite Aid Corporation, the receipt for this one also mentions that you can fill your prescription over the Internet.
Okay, very good, you are clearly marching into the 21st century. Miss Seyda, you seem like you might have some information that you might want to share with us?
I think you're just about done, but you've invested so much time and effort into today, I'm sure you'd like to stay till the conclusion. 260 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
Thank you. And we have that customer-service matter that we need to get cleared up. I have all the paperwork up here.
I would like to advise Council that we have resolved the issue with Miss Gallagher, and that her prescription -- her injectable treatment plan will be covered. We are still on an ongoing -- need a process in place on an ongoing basis, but her specific treatment plan has been approved.
And that means what? She's eligible, say, tomorrow to go and get the injectable treatment?
And has she paid out any money under this four- or five-month period, will that be reimbursable to her? If she's paid; I don't know whether she's paid. 261 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
If she has, we will certainly handle it for her. I just don't know what the facts are.
I seem to recall, Mr. Chairman, she may have indicated that she had not had a treatment since, I believe, February of 1998 for financial reasons. Obviously, I don't know how you --
Right. I don't know how you make up for that, I don't know, you know, but we would hope that you would --
The City just has to hope that nobody sues, and the case doesn't go before Judge Shapiro in federal court.
Right. 262 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
As I understand, we've not done too well on these disability cases in the federal courts.
Miss Seyda, one, let me say thank you for working on that and getting a resolution to it. But to also remind you that there are, apparently, other employees who have this same situation, and you were relating to us the need for a larger policy decision or a possible change that you are in the process of working on.
If I could clarify that. The policy decision has been made. What we are in the process of working out is what the medical review process will be for these cases.
Do you expect within a day or so to notify other similarly-affected employees that there has been a policy change and notify them as to what mechanism or process they need to access in order to avail themselves of the same opportunity as Miss Gallagher?
We are in -- as I indicated, we are in the process of working out 263 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 what that medical review process will be and who will do it. I expect to have that revolved very shortly, at which time we will notify any other employee that we are aware of.
Well, let me ask you this question? Do you know what that medical process was back in August of 1996 that allowed Miss Gallagher, at the time that our plan allowed this, to have a letter submitted from her doctor explaining why she needed to have this particular injectable drug that was apparently accepted at that time as the basis for approval? Do we need anything beyond that?
I don't know the answer to that because I don't know -- I don't personally know how that was being handled in the past.
Will you get to us information that kind of wraps up this whole situation and what has been done and what will be done going forward and what this medical review 264 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 plan or system will be?
Thank you. Councilman, any other? (Chairmen Nutter and Cohen confer off the record.)
Miss Seyda, we thank you and we thank the Rite Aid representatives. We know it's been difficult for you, but it's also difficult for us at this end. And we hear these complaints probably more. You hear them at one session here; we hear them on a continuing basis every time we're out in the field, which is very frequently.
Well, that does remind me of one other thing. You heard the testimony, I believe, by Mr. Brog, which talked about the HMOs having some --
Exactly. Which seemed to be more of an on-the-ground, in-the-locale kind of a --
It's an apples-and-oranges situation. It's not relevant. The HMOs have 265 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 grievance procedures to determine whether a particular treatment is warranted in a given case. The City has a plan that says, These drugs are covered.
Well, I understand that. We're not talking about drugs covered, drugs not covered. What we're talking about is resolution of problems, a central complaint system, and we how go about reviewing what happens in the protocols that go with it. Your response has been, We should call 1-800-Rite Aid. That's as it relates to you. I've also asked Miss Seyda, though, to develop a service-standard procedure and program for us. But I asked, I believe, you and Mr. Hushen to think about what else can be done for people right here and who they talk to. I mean, I have no sense of any kind of, I guess, confidence that beyond calling the 1-800 number that there is any further follow-up. I don't know that system, I don't understand how that system works and operates; whether you just call the 1-800 number, you have a conversation with someone, it kind of gets worked out, and then 266 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 it goes away. As opposed to a recall and report system. I mean, we heard some testimony that technically, apparently by way of the RFP, our consultant is supposed to do annual reviews of what goes on. Well, I've never seen anything about that, heard anything about that, never seen a report or anything else on that particular issue. So there is, in my view, and based on my experience, there's no on-the-ground regular monitoring or evaluation of what goes on. We pay a pay per-member per-month employee amount, you pay a dispensing fee, people pay a copay, and that's kind of it. We get what we get. And every open-enrollment period, we get information about what's going on. So I mean there's not a lot of real relationship in ongoing monitoring and evaluating from my standpoint. I don't see it, I don't know how it functions and operates.
Well, we provide the City with reports on a periodic basis with respect to information that they ask for. There are 267 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 standardized reports. I'm sure the City can tell you better than I can because I just don't know of my own knowledge what those reports consist of and what their frequency is. What the Administration does with those reports, I can't tell you.
Well, I understand that. Then what I'm going ask Miss Seyda is --
I want copies of all the past reports as well as, for the moment, some level of agreement that prior to any contract reauthorization, if you decide to proceed down the path, which I totally disagree with, which is this kind of every-year game that we play; or if we're going to into a multi-year contract phase, we would have those reports prior to any reauthorization, signing of contract, letters flying back and forth, people agreeing by way of individual letters that get signed, we really should see those reports before any of that kind of activity takes place.
If you could clarify, you know, for me specifically the reports, the types 268 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 of reports that you're looking for.
Mr. Gurson just said that Rite Aid Corporation provides various reports to the City on a regular or annual basis about, I guess, number of prescriptions filled, utilization rates, a whole --
I can't even ask what I want to ask about them because I don't even know what's in them. Whatever those reports are, I'd like copies of them going back to the beginning of the contract. But, further, prior to any reauthorization, whether it's the one-year contract scheme or if we go to a multi-year contract, we certainly need to have that information before any new contracts are signed.
(Inaudible, off 269 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 mike.)
Well, I was going to say, City Council practice is that the Councilmember that introduced the resolution has a continuing responsibility and to be able to report back to the rest of the Council. Therefore, in this case, I think copies of all reports ought to go to Councilman Nutter. He was the sponsor of the resolution that brought about these hearings. And to make it simple, we think there ought to be a copy of anything that transpires. If there are going to be any more letter agreements or anything corresponding, we ought to get a copy of anything. And if you run into a problem with any of the supervisors you have, Miss Seyda, the Managing Director, the Chief of Staff, or the Mayor, we'd like to know so that we can resolve it. But it's our request that we be kept continually informed. And then in addition, I think what Councilman Nutter said is we want assurance that before there's any effort to exercise the option 270 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 of renewal that we be informed in plenty of time so that we can consider it and express our opinion. So that if we agree, fine, we say we agree, go ahead. And, you know, if we disagree, we'll have a chance to discuss that before the final decision is made by the Administration.
Exactly. Lastly, Mr. Gurson, questions have been asked about the payments to the consultant. Your initial response to that was you weren't sure who was paying whom. You seemed over the rail when Mr. Brog was reading from the RFP.
Yes, we are. As part of the contract, we are paying the consultant's fee as required by the RFP.
Okay. And there seem to be two components to that. Could you go over that? Did you hear what was read into the record about that? There seemed to be a percentage based on the disbursements by the City. And then I was slightly distracted, but I thought I heard something about a per-prescription issue. Can you explain that? 271 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
I thought what I heard was that there were two alternatives. And on a capitated basis, the payment to the broker/ consultant would be 1 percent of the amount paid by the City. And on a fee-for-service basis, it would be paid on a per-prescription basis, a -- I think it was cents that was mentioned. 9
It would be paid on a 11 per-prescription basis. Not both being paid. It 12 depends which way -- which plan the City is using. 13
-- per month per 23 employee and the total dollar-amount paid out by 24 the City to Rite Aid increases, does that mean 25 that there is an automatic increase as it relates 272 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 to the consultant as well? It's just 1 percent of whatever.
It's just 1 percent of whatever. I think that's what RFP said, as I heard it read.
No, it is not because to the extent that -- as I said before, copayments have a variety of functions. One is to make it more attractive for the customer to take generic medication so that the cost is less. And the other is to shift costs, just purely shift cost from the payor (the plan) to the participant. And that's what a copay does. But the 1 percent is not part of the City's payment. I mean, the copay is not included within the City's payment for calculating the amount.
Referring to Councilman Nutter's earlier series of questions about having a local person that everybody could call, Rite Aid did have such a person in part. His name is Manny Stamatakis. He was the original 273 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 representative of Rite Aid. We understand he actually testified sitting where you two are, he and David L. Cohen testified together in support of the original contract. Now, he still may be a representative, but politically, he's moved into a different area. He's Chairman of the Delaware River Port Authority. But he was the person, when nothing else availed and I made complaints to David L. Cohen about the poor service, he said to me, "Well please call Manny Stamatakis." And like that, the problem was resolved. We have a problem here. A member of our staff came under the plan in October of last year and hasn't even been able to get from Eagle Management a -- what do you call it, a membership card? or whatever the card is that send out so he can show his pharmacist that he truly is covered. What could explain that?
Well, it could be that the City has not freshened -- and I don't know that it's the case -- the eligibility data. We rely on the City to tell us the specific names of people 274 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 who are covered by the plan. Now, we --
He's reported that, he says, at least five times. Now, could we find out if it's the City? And if it's the City, could you get on it? Stanley Shapiro, S-H-A-P-I-R-O, is the name. And "Stanley" is like "Stanley Hardware," only he's a lawyer. Could you find out where the fault is so he can get a card?
I certainly recognize the name. I was not aware of the problem. We will follow up on that.
You know, we feel silly raising it, but I know Manny Stamatakis were here, I'd call him on the phone, and he'd have the card within 48 hours, maybe hours. 21
Mr. Chairman, I can only 22 point out that you don't have to have the card to 23 get your prescription filled. You can go in and 24 give your name. It may take longer, but you can go in and get your prescription filled without 275 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 card.
Yeah, well, first they try on the computer to locate you, and then after about ten minutes, they tell you, Well, we can't locate you -- UNIDENTIFIED COUNCIL STAFF MEMBER: And, God forbid, you have a dependent who you need a prescription for.
Well, why can't we have a name -- may I request that without going to official committee action, can't there be somebody who is someone we can tell people -- we know if we have problems -- the reason that we point out our problems is not that we don't know how to get them solved. I know could have called the head of Rite Aid, one of the Grassos, father or son, and gotten him, you know, within hours. 21 But if we have trouble in the normal 22 day-to-day, think of what happens to employees 23 that don't sit on City Council of don't, you know, 24 have enough technical knowledge to know how to pursue it. Why can't there be a person in 276 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 Philadelphia? You've got a big organization. Now, why can't there be a person, a consumer advocate if you will, whatever other name you want to give, that we could tell all employees, If you have any question, call this number and they will be able to respond.
I think that's something we could consider. At the moment, it's a telephone call. And it just so happens that the person who answers the telephone is not sitting in Philadelphia but is sitting elsewhere. They won't be -- we can't have a person in every store, a store manager.
No, we're not asking for that, just one person in Philadelphia. Manny Stamatakis was actually outside the City. He was in a county.
Well, I don't think Manny would like it if we suggested he's the person that every person should call.
Well, I'll tell you, he was awfully good at what he was doing.
Although he has enough phones. 277 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
And maybe you could tell the Philadelphia head and maybe he could have it in his office.
But Mr. Hushen will tell you, in all seriousness, that we get calls at the customer service center. They are directed from the customer service center if the customer service person can't answer them. We get direct calls. We had an instance which Mr. Hushen was aware of where we had a person who had food stamps and was having trouble getting change made when they bought food items. And Mr. Hushen was called directly by the president of the company and asked to rectify the situation, and we rectified it. We can only deal with those things that we know about, and we try to do it quickly for everybody, including just ordinary people. They don't have to be Members of Council.
All right. That's good to hear, but if you could ever move away from 278 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 that form which lists all the for reasons, and for reasons 2 and 7, you're not getting paid, and you could write a normal letter saying, We believe we have paid this prescription, you know, and that's why we're not paying it again. . .
Only because it's late in the day, we would love to be able to do that, but I think the rate the City would pay us would have to go up because of the cost involved in doing things on an individual base like that, as crass as it is. I mean, you can't have -- it would take hundreds of people to stylize and respond to individual complaints. It can't be done economically for us, and therefore, for the City.
But you're working on some kind of on-the-ground, in-Philadelphia complaint response program.
Is the City 279 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 Solicitor going to. . .
No, we have spared the solicitor today. They've provided some good background information.
But the Solicitor wanted a representative to be here to provide any information that we might require, but I think we're okay. Thank you very much for participating. This hearing is adjourned to the call of the Chairs, recessed. Thank you. (Adjourned at 4:08 p.m.) - - - 280 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Thursday, May 21, 1998, were reported and accurately by me, and that this is a correct transcript of same. RE: JOINT COUNCIL MEETINGS ON COMMERCE AND ECONOMIC DEVELOPMENT COMMITTEE, COMMITTEE ON LAW AND GOVERNMENT BILL NO. 970845 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter