Understanding PSAOs in a Complex Healthcare Era

By Peter Kounelis

While we all have high hopes for the new year, the spike in COVID cases again last month led to a concerning influx of patients on our healthcare system.

The local independent pharmacy community remains on the frontlines of patient care, continuing their day-to-day service to patients on top of providing COVID-19 tests, vaccines, boosters, COVID-19 therapies in many states, and answering patients’ questions about their medical concerns. Unlike many other healthcare professionals, community pharmacists are also business owners – responsible for providing care to their patients and managing back-office business responsibilities – all while trying to stay competitive against larger chains. Small, owner-operated pharmacies are struggling amidst this fight, but their viability is essential for access to critical healthcare – especially in rural or socially vulnerable communities where a pharmacy may be the only accessible healthcare destination for miles.

Knowing the role community pharmacies play for patients across Florida and the responsibilities these small business owners bear, pharmacy services administrative organizations (PSAOs) continue stepping up to the plate to help, serving as crucial partners. As administrative intermediaries created to help small, independently-owned pharmacies navigate the ever-changing, ultra-competitive reimbursement landscape, PSAOs are perhaps more important than ever to the livelihood of the small business pharmacy community.

About 80% of community and small chain pharmacies choose to be represented by a PSAO. Elevate Provider Network, for example, represents about 5,200 pharmacies across the United States, including hundreds serving patients here in Florida. Part of Elevate’s mission is to preserve, protect and promote the value of independent pharmacies in the communities that they serve. Pharmacists rely on PSAOs like the Elevate Provider Network when dealing with complicated and ever-changing pharmacy benefit managers (PBMs) regarding health plan contracts, as well as other burdensome administrative tasks that otherwise take pharmacists away from patient care at the counter.

Over the past few months, however, the role of PSAOs has been called into question by PBMs. PBMs are powerful middlemen within the healthcare supply chain and recently launched a misinformation campaign in Florida, inaccurately representing the role of all PSAOs and their community pharmacy partners. In order to bolster knowledge of PSAOs and avoid any flawed policies, it is important to set the record straight here in the Sunshine State.

The role that PBMs play in our healthcare system is often unknown to the public, especially the extent to which they truly impact what patients pay at the pharmacy counter for their medications. As the intermediary that manages prescription drug benefits on behalf of health insurers and employers, PBMs create drug formularies and manage drug manufacturer rebates, directly impacting the price of medications. Unfortunately, PBMs are notorious for take-it-or-leave-it contract terms that small, often rural, community pharmacies struggle to navigate.

PSAOs, on the other hand, advocate for community pharmacy partners and address the operational and administrative challenges PBMs often create. Ultimately, the services provided by PSAOs ensure community pharmacies have the resources and assistance to provide patients with access to fair and equitable healthcare.

As community pharmacies across Florida continue to serve their patients’ needs, it is critical that we educate ourselves on each player in the healthcare supply chain, including PSAOs. In this new year, I encourage Florida policymakers to seek out accurate information about PSAOs and how they provide critical support to communities. Our healthcare system, pharmacies, and patients will be better for it now and in the future.

Peter Kounelis serves as Vice President of Elevate Provider Network where he leads network strategies and serves as a liaison to the industry. He holds responsibility for developing and leading PSAO Services for the organization and oversees the provider network advisory board. Kounelis earned his pharmacy degree at the Purdue University School of Pharmacy and his MBA at the Purdue University Krannert Graduate Business School of Management.