Medicaid Payment Cuts: Ripple Effects on Rural Healthcare Access and Pharmacy Viability

Scott Soefje, PharmD, MBA, BCOP, FCCP, FHOPA, discusses how Medicaid payment cuts to rural community hospitals could trigger widespread closures, creating “healthcare” and “pharmacy wastelands” across multiple counties. He warns that these changes threaten already fragile retail pharmacies and could severely limit patient access to care. Soefje emphasizes the need for pharmacists to closely monitor developments over the next year and actively engage in policy discussions to protect communities.

Until the outcome is clear, pharmacists and other healthcare stakeholders must be prepared for potential disruptions and work collaboratively to ensure patients in underserved areas continue to receive essential services.

Pharmacy Times: CMS has eliminated narrowed risk corridors for 2026—does your pharmacy expect more aggressive utilization controls, and will pharmacists step up appeals or exception management?

Scott Soefje, PharmD, MBA, BCOP, FCCP, FHOPA: I think utilization control is something that’s going to be part of this whole process as the push comes to control costs. Pharmacists, more and more, are getting pulled into areas like denial management—how do we go back in and help push for a patient when their insurance denied it? But we have the data, the literature, the guideline—whatever it is—that tells us to pick, to select that med. We’re getting to be more and more part of that whole process.

As we evolve utilization controls, what pharmacists are going to have to be involved in is understanding that these controls are guidelines. They never should be hard and fast—or at least that would be the ideal. And so, what’s the exception? When can we violate it? When can we step outside the guidelines? Those are the things that I think pharmacists are going to have to understand. And who’s going to be granted the authority to do that? Is it the local pharmacist dispensing the medication, or is it somebody in an office, sitting somewhere in a corporate headquarters, that we have to pick up the phone and call to ask for permission? And is that person a pharmacist? I think some of those things are going to have to be worked out as we go.

I would like to hope we see more pharmacists get into these managed care–type roles—those who are helping set these utilization review concepts and these formularies and tiered therapies, and all this other stuff. That gives us the ability to talk peer to peer and say, “Why did you do that? Does that really make sense? Can we do this instead?” And I think a lot of times, maybe we can come to something that is a win-win. Maybe it’s a lower-cost drug, but it’s still effective for the patient, and that’s where we will be ultimately.

Pharmacy Times: Is there anything else you would like to add?

Soefje: I think we don’t know yet the full implications of the changes in Medicaid. If you start doing the little scenario, Medicaid is going to reduce payments to these hospitals. These hospitals are rural community hospitals that only survive because of Medicaid payments. This hospital closes—what’s the ripple effect on the next hospital and the next hospital? And what’s the ripple effect on the community and the pharmacies in the community?

And, you know, retail pharmacies that are barely hanging on by the margins they’re getting—because they have these slim, slim margins—and now you take away something that maybe was a steady margin for them, maybe it was a loss, and they liked it. We don’t know yet. These are all of the things that we’re going to have to take a look at.

But where do these patients go? I think there’s going to be a ripple effect. We’ve been talking here in Minnesota, and we think we’re going to find across the country pharmacy wastelands and healthcare wastelands—whole sections, whole areas where there might not be a healthcare provider in the area, multiple counties. If that happens, then I think healthcare is going to be in for a tough ride until we can work through this, figure this out, and figure out how to get support back to those patients.

I know there are some proposals in Congress right now to reverse the cuts, and again, maybe this is all speculation and it goes away. I think we really need to pay attention over the next six months to a year to figure out how this pans out and where things are going. I think pharmacists are going to be right in the big middle of it, so we need to really be part of this whole discussion.