The Medicaid Pharmacy Study Commission wrapped up its investigation into options for the future of Medicaid’s pharmacy delivery and reimbursement system and found local pharmacies would be affected by a decision to switch to one of three options presented.

Gov. Robert Bentley established the commission in June because of the rising costs for the state’s Medicaid program. State Sen. Greg Reed (R-Jasper) said the programs costs have increased to more than $600 million or 35 percent of the state’s general fund.

The proposals include three pharmacy benefit management groups, who claim savings of $30 to $50 million, according to claims from 2011; Walmart, who claims savings of $14.19 per script and up to $119.88 million in the first year; and Alabama Prescription Cooperative Inc., who claims $48 to $60 million annually in savings.

An independent study by Optumas — a health care consulting agency — found more conservative estimates, with $35 million annually being the greatest savings.

But the savings might also have a negative impact on the state’s pharmacy network.

“Our actuaries would tell you that reducing spending in pharmacies would likely increase the closure rate in pharmacies between one and four pharmacies a year,” state health officer and commission chair Don Williamson said. “For many stores, it would have a negative impact and could result in one or more stores closing in the state. Unfortunately there isn’t a simple answer.”

Walmart’s proposal has particularly been the subject of criticism from pharmacy owners and Selma residents because of its plan to distribute prescriptions through its stores and contract with smaller, independent pharmacies in rural areas.

“It’s not fair, there are hundreds of little drug stores that we all use,” Selma resident Sallie Emerson said. “I don’t think the governor has the right to choose what pharmacy every Medicaid prescription comes from. Would you like to eat at the same place as everyone in town?”

Small, independent pharmacies provide services Walmart can’t imitate, home delivery and in-depth knowledge of each patients needs, according to Swift Drug Company owner Buddy Swift.

“We feel like the independents offer a lot more in terms of patient counseling,” Swift said. “We are small enough to where we know our patients more intimately than Walmart does. We feel like we really do provide a value added service, more than just putting the pills in the bottle and handing it to a patient.”

Williamson said a major challenge in finding a solution to increasing Medicaid costs is saving money without affecting access, especially in rural areas.

The commission also investigated solutions that would have little to no impact on local pharmacies.

One such solution is replicating Georgia’s Most Favored Nation Policy. The policy requires providers to bill Georgia’s Department of Community Health at the lowest rate accepted from any other payer. Optumas said Georgia has realized savings of 2 to 5 percent savings annually.

Williamson said “tinkering around the margins” or small, internal changes could also yield small savings, but none quite equal the projected shortfall in Medicaid for the 2015 fiscal year — when the changes are likely to take effect.

The commission is expected to present its findings to the Bentley in January. After Bentley reviews the findings, Williamson said a number, including the proposal, will be including in the budget.

“The reality is that some of those proposals would have some really dire consequence for pharmacies in Alabama and especially in rural Alabama,” Williamson said. “Medicaid has a structural deficit that we have been able to manage over the years by finding dollars from previous years. Fiscal year 2015 is the year we have to move the funding to a level that will support us.”