Traffic passes by Fred Meyer in Juneau in November 2019. Many Juneau residents may need — or at least want — to get their prescriptions somewhere other than Fred Meyer as of Jan. 1, since its parent company Kroger has announced the termination of an agreement with a pharmacy benefit manager that works with insurers such as Cigna and Premera Blue Cross Blue Shield of Alaska. (Michael Penn / Juneau Empire File)

Traffic passes by Fred Meyer in Juneau in November 2019. Many Juneau residents may need — or at least want — to get their prescriptions somewhere other than Fred Meyer as of Jan. 1, since its parent company Kroger has announced the termination of an agreement with a pharmacy benefit manager that works with insurers such as Cigna and Premera Blue Cross Blue Shield of Alaska. (Michael Penn / Juneau Empire File)

Insured prescriptions from Fred Meyer may end for many Jan. 1

Corporate parent severing contract with company that reimburses city, military, other local workers

Many Juneau residents may need — or at least want — to get their prescriptions somewhere other than Fred Meyer as of Jan. 1, since its parent company Kroger has announced the termination of an agreement with a pharmacy benefit manager that works with insurers such as Cigna and Premera Blue Cross Blue Shield of Alaska.

The agreement is likely to affect people signing up for insurance through the Affordable Care Act, military personnel and other government employees at the municipal and federal levels. Kroger, in a corporate statement, claims 90% of customers will be unaffected. Local employers, pharmacists and others interviewed this week said they believe residents who are affected by the change should mostly be able to make alternative prescription arrangements with relatively little difficulty.

About 1,000 City and Borough of Juneau employees, for example, will have to adapt since they and their families are covered by Premera Blue Cross Blue Shield of Alaska, said Natasha Peterson, the city’s benefits administrator. But that doesn’t necessarily mean they’ll need to switch pharmacies if they prefer not to.

“They would be responsible for paying for prescriptions upfront” since Fred Meyer would no longer “in-network” for the insurer, she said. “They would then provide a receipt to Premera and Premera reimburses them. It just means more upfront expense from the (employee) and then a little bit more effort to get reimbursed.”

Information about the change was sent earlier this month to all insured employees, which includes workers at Bartlett Regional Hospital and a handful of Juneau School District administrators, Peterson said. She said so far there have been few inquires, although “I would imagine I’ll start to get questions after Jan. 1 when employees start to fill their prescriptions.”

Kroger announced in September its intention to end its agreement with Express Scripts, a company that processes reimbursements between pharmacies and insurance companies, claiming renewing the contact “required Kroger to fill our customers’ prescriptions below our cost of operation.” The company said it remains open to new terms before Jan. 1.

Juneau pharmacies said they believe they will be able to handle any patient transfers smoothly.

“We’re getting a fair amount of calls from people asking what they’re options are and what we’ll be able to do,” said Scott Watts, co-owner Ron’s Apothecary Shoppe.

He said despite ongoing issues such as supply chain disruptions “we would be able to provide services for any additional customers looking to transfer their prescriptions. It could be impactful, but I think we have the capacity since the transfers would be spread around among different pharmacies.”

Katrina Tapon, a pharmacy technician at Juneau Drug, said they’ve heard considerable discussion about Fred Meyer altering its services, but there aren’t many actual requests for transfers so far since most of the downtown store’s customers are residents living in the vicinity.

Alaska’s military members are insured through TRICARE, which also uses Express Scripts. But as with Juneau’s municipal employees, local U.S. Coast Guard officials said they believe the change at Fred Meyer “will be low impact to Coast Guard members and their families.”

“The Juneau Coast Guard clinic has been made aware of the change, and local Coast Guard members have other options to pick up their prescriptions as needed,” Erin Bohner, deputy regional practice manager for the Coast Guard’s 17th District Health Safety and Work-Life department, stated in an email.

All Premera Blue Cross Blue Shield customers were sent letters earlier this month notifying them of the three closest non-Kroger pharmacies, along with mail-order options, said Amanda Lansford, strategic communications manger for Premera Blue Cross. She said Kroger represents only 8% of Premera’s in-network pharmacies in Alaska.

“Every city that has a Fred Meyer pharmacy has at least one other pharmacy with a Premera network they can use,” she said.

A last-minute agreement that avoids any such dilemmas remains a realistic possibility.

A news release by Kroger states the company “remains willing to negotiate any contract with Express Scripts that results in a fair, transparent agreement at a rate that benefits everyone — particularly our customers — and prevents any disruption of services.” Lori Wing-Heier, director of the Alaska Division of Insurance, told the Anchorage Daily News “it is not unusual for there to be posturing between the two parties as they negotiate” and Lansford at Premera echoed that observation.

“It is certainly possible they’ll reach an agreement by the 31st,” she said.

But concerns are being expressed about potential impacts for rural communities and individuals relying on limited pharmacies and/or mail for prescriptions. Issues such as distance, reliable supply chains and extreme weather conditions are among the problems cited.

“It’s not good health care for people to lose access to their pharmacies,” Justin Ruffridge, a Soldotna-based pharmacist, told the Anchorage Daily News.. “It’s not good health care for people to have to question whether or not their prescription is coming in the mail, whether it’s going to be OK sitting outside in a freezing mailbox for the next four hours.”

Another future complication may be the announced merger of Kroger and Albertsons, the latter of which owns Safeway stores, since that could eliminate another of the remaining local pharmacies affiliated with Express Scripts. The merger — with Kroger essentially purchasing Albertsons — is expected to occur in 2024 if regulatory approval is received.

• Contact reporter Mark Sabbatini at mark.sabbatini@juneauempire.com

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