By the end of this summer, two new independent pharmacies will have opened in Bend. But if you’re among the thousands of Oregonians who bought a Moda health insurance policy, you’ll have to continue picking up your prescriptions elsewhere.

Westside Pharmacy, which officially opened in June, and Cascade Custom Pharmacy, which opens Aug. 1, were told by MedImpact, the pharmacy benefits manager for Moda Health and other insurance carriers, they had to wait five and six months, respectively, before they could get clearance to fill its prescriptions. Pharmacy benefits managers, or PBMs, are third-party companies that large, self-insured employers hire to manage their prescription drug programs, which typically means working with pharmacies, deciding which drugs are covered and paying claims.

MedImpact implemented a policy roughly a year ago that requires pharmacies that have been in business less than one year to undergo on-site inspections, a costly and time-consuming change designed to bring down the high rate of fraud, which, according to MedImpact, occurs among more than half of pharmacies open less than a year.

Aside from having to pay a hefty $1,200 inspection fee, the pharmacies’ owners say not being able to fill Moda prescriptions when they open will hurt business. Angela Valerga, who owns Cascade Custom Pharmacy with her husband, Erick Scheiderman, said when people learn they can’t fill their prescriptions at the pharmacy for the first couple months, they might just decide to stay with their current one indefinitely.

“They may not be 100-percent happy there, but they think it’s a pain to transfer their medications all over to a new pharmacy,” she said. “That might be a deciding factor when you first open and you don’t take their insurance and then they say, ‘Oh, well, you know, I’m pretty comfortable where I’m at at Safeway.’”

Cascade Custom Pharmacy used to be a compounding pharmacy only — one that creates custom medications for patients — but will expand to a full-service pharmacy in its new location in the Brookswood Meadow Plaza.

Kristen Godfrey, the owner of Westside Pharmacy, which opened in a former bank on Century Drive, said it’s frustrating to have to turn away would-be customers.

“I hate when people come in and they’re all excited that we’re open and then they’re like, ‘We’re Moda,’ and I’m like, ‘Ugh, I’m so sorry, but here’s the story,’” she said.

Moda sold far and away more individual policies than any carrier in Oregon in 2014, covering more than 95,000 people and 40 percent of the individual market. The company wooed enrollees with attractively low premiums, but has applied for a 12.5-percent premium increase in 2015. The Oregon Insurance Division has not yet approved the increase.

MedImpact spokesperson Gordon Romanas wrote in an email that the new policy is meant to protect the company’s clients. Inspections will include verifying the stores’ inventories and making sure they’re storing products properly, have appropriate signage and have a pharmacist there at all times.

“MedImpact is not focused on excluding pharmacies, simply verifying the good standing of a pharmacy before allowing it to participate in the network,” he said.

Pharmacy fraud — meaning pharmacies that open, bill PBMs for prescriptions they never filled and then close quickly — likely costs the U.S. health care system more than $50 billion annually, said Susan Hayes, an accredited fraud investigator and principal with Pharmacy Outcomes Solutions, an Illinois firm that helps health plans eliminate pharmacy fraud. Hayes bases her estimate on the fact that government officials and law enforcement agencies place health care fraud-related losses as high as 10 percent or $230 billion annually, and pharmacy represents 25 percent of the cost of health care.

“It’s like whack-a-mole,” she said. “They pop up and then they go underground and they pop up some other place and they go underground. We’re worried about those kind of pharmacies.”

Although MedImpact is at the forefront of implementing such a rigorous inspection process, Hayes said she thinks more PBMs will soon follow suit. Given that a typical fraud investigator can charge $1,000 per day, Hayes said she thinks MedImpact’s $1,200 fee is reasonable.

“To put it in perspective, that’s the cost of a drug that can be processed in 3 seconds or less,” she said.

PBMs prefer to wait at least 90 days before green-lighting pharmacies to make sure the business is legitimate, hence the five- to six-month wait, Hayes said.

Hayes’ advice to independent pharmacies: Plan ahead. Anticipate long waits with PBMs and apply long before you open.

But that gets complicated when you consider that pharmacies must first have a license to practice, a lease for their store and other approvals to practice, said Valerga, who worked for a number of local chain pharmacies, including Costco, Safeway, Fred Meyer and Walmart, before opening her own.

Godfrey shut down her private counseling practice in favor of opening a pharmacy after noticing a dearth of such services locally. After Ray’s Food Place on Century Drive closed, Godfrey said the need for more pharmacies was a constant conversation, so she decided to take matters into her own hands.

But now, her hands are tied when it comes to accepting Moda policies, although she said she calls MedImpact whenever she has time — anything she can do to speed up the process.

“It’s so unfortunate because there are so many Moda patients in Bend,” she said. “I don’t know that Moda themselves understands how much their patients are being impacted by what MedImpact is doing.”

— Reporter: 541-383-0304,

tbannow@bendbulletin.com