Armed with a new legal opinion indicating there are no federal or state legal restrictions barring Oakland County from selecting a new discount prescription drug card vendor, county officials may forge an agreement with a new company to provide additional discounts to county residents and a modest amount of revenue for the county government. In light of the legal opinion, we hope to see a formal proposal submitted to the appropriate county board committee or committees for review and debate, ideally culminating with implementation of an agreement with the new vendor.
Legal counsel to the Oakland County Board of Commissioners, at the request of one member of the county’s governing body, has determined “based on the limited information available to (him) in the form of two letters from other lawyers,” the county wouldn’t be violating state or federal law if it switched vendors for the prescription drug discount card program in favor of one that could double the amount of savings the program’s participants now enjoy, as well as double the amount of people participating in the program.
County Commissioner Jim Runestad (R-Waterford, White Lake) brought forward the idea of changing vendors to the county board’s GOP Caucus in May and the board’s Republicans heard the arguments for switching from CVS Caremark to the Coast2Coast Rx Card, a move that Runestad estimates could bring between $150,000 and $200,000 to the county for health programs through a per-prescription royalty the county would receive.
The royalty is what’s at issue — whether entering into an agreement with Coast2Coast would violate state and federal anti-kickback statutes. Attorney Richard B. Poling, Jr. wrote in an Aug. 12 memo to county board Chairman Michael Gingell (R-Lake Orion) and Runestad that it wouldn’t seem to, at least in part, since the contract would be publicly disclosed.
Another key point stated by Poling is that the actual intent of switching discount prescription drug card vendors is to help indigent citizens get cheaper medical goods and services — not for the county to gain “profit.” In addition, Poling states the change wouldn’t violate state or federal laws because any money paid by the new vendor to the county would go to the county government, not a specific person, thereby thwarting any “kickback” implications.
“Logically, with all of the other local governments that are using the Coast2Coast program, it would seem that if the federal government felt it was illegal, it would have stopped the program somehow,” the memo reads.
Runestad said the GOP Caucus will “have a discussion” about the legal opinion and the merits of making the change. He added that he hasn’t heard one commissioner say they don’t think the change is worth exploring, given the many additional potential benefits of going to Coast2Coast over Caremark.
According to Runestad, Coast2Coast can offer a 50 percent discount on prescriptions for eligible county residents, as opposed to Caremark’s 24 percent discount.
It’s believed that Coast2Coast would pay the county $1.25 for every prescription drug filled using the company’s discount cards.
Oakland County began offering free prescription drug discount cards to uninsured and underinsured citizens five years ago. Participants, according to the county, realize average savings on prescription drugs of 20 percent, plus savings on specialty medications.
Runestad’s proposed change in discount card vendors sounds well worth the time and resources to thoroughly and seriously consider, yet there are a few questions that will need to be answered before the county board plows ahead to make the change.
Doubling the discount county residents can get on prescriptions is enough of a benefit to make the vendor change worthy of consideration. But the change is expected to also double the amount of eligible resident participation under the current vendor and its program, from 20 percent penetration to 40 percent.
If that’s not compelling enough, there’s the payments from Coast2Coast to the county to consider. True, as much as $200,000 a year in payments to the county may not seem like much considering an annual county budget approaching $800 million, but we’re confident that money could be put to good and significant use.
It would appear that county commissioners are in sync in supporting the general concept of the vendor change and the benefits that would follow. What commissioners need to focus on from here are provisions of a marketing agreement that Coast2Coast would require and details of another company requirement: Providing a link on the county’s website to a special website regarding the discount prescription card program.
According to Poling’s memo, it’s unclear who would create and maintain the program website and whether there’s to be oversight by the county over the website’s content and links.
So long as those issues can be resolved to the county’s satisfaction, we expect to see Runestad’s proposal move through the committee process and addressed by the full county board.