Understanding PSAOs in our fight against Omicron

Understanding PSAOs in our fight against Omicron

Image by Gerd Altmann from Pixabay

While we all have high hopes for the new year, our country and state remain in the throes of COVID-19. The new omicron variant has spread quickly across Maryland, dominating total caseloads and setting hospitalization records. More people than ever are testing positive for COVID-19 and experiencing a wide range of symptoms—once again dangerously straining our healthcare system and those providing care.

The local pharmacy community remains on the frontlines in fending off this virus, providing COVID-19 tests, vaccines, and boosters and answering questions about this confusing disease. At the same time, pharmacies are managing their other responsibilities to keep Marylanders safe and healthy. Like other frontline professionals, pharmacists’ long shifts continue to strain their ability to provide care just when our communities are most counting on them as truly trusted and accessible care providers.

Knowing the role community and small chain pharmacies play for patients across Maryland and the country, pharmacy services administrative organizations (PSAOs) likewise continue stepping up to the plate. As administrative intermediaries, PSAOs were created to help small, community pharmacies navigate the ever-changing, ultra-competitive pharmacy reimbursement landscape. Now, more than ever, their roles are critically important to the livelihood of the 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 many that operate here in Maryland. Pharmacists rely on PSAOs when dealing with complicated and every-changing pharmacy benefit managers (PBMs) and health plan contracts or other burdensome administrative tasks that would otherwise take pharmacists away from patient care.

As COVID-19 continues to change the healthcare landscape and expand the role of pharmacies, PSAOs are helping them to adapt. Curbside pickup, testing, large-scale vaccines, home deliveries—PSAOs are supporting and streamlining all of these changes for our pharmacies in Maryland and across the country.

Unfortunately, because PSAOs work behind the scenes, few understand their critical role, and that lack of knowledge negatively influenced the 2020 legislative session. When passing HB 978, the Maryland General Assembly mistakenly conflated the role of PSAOs with PBMs. As written, certain aspects of the law now limit PSAO abilities to most effectively support pharmacy partners.

The truth is, PSAOs and PBMs play entirely different roles within the supply chain, and the legislation must be changed to reflect this important distinction. Unlike PBMs, PSAOs do not influence the price Marylanders pay for medications or a patient’s health benefit design. Instead, they are solely focused on creating efficiencies and relieving administrative burdens for pharmacies. A PSAO advocates for its member independent pharmacies and is aligned in their opposition to many abusive PBM practices that threaten independent pharmacists’ ability to provide frontline care. Ultimately, PSAOs serve pharmacists and patients by using their expertise to ensure pharmacists can stay at the counter serving patients instead of being stuck in a back office crunching numbers and filing paperwork.

As COVID-19 rages on and lawmakers head to Annapolis for the start of the 2022 legislative session, it is critical they keep public health—and those who are supporting it—top of mind in making decisions. This informed focus must include PSAOs. In this new year of hope, I encourage Maryland policymakers to learn more about these critical organizations and amend HB 978 to properly reflect the role PSAOs play. Our healthcare system, pharmacies and patients will be better for it now and into the future.

About The Author

Peter Kounelis


Peter Kounelis serves as Vice President of Elevate Provider Network for AmerisourceBergen where he leads network strategies and serves as a liaison to the industry. He holds responsibility for developing and leading PBA 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.

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