North Carolina’s largest health insurance provider announced in November that it would mail more than $200 million in health and wellness retail debit cards to its members.

But as small businesses struggle to stay afloat amid rising COVID-19 infection rates, Blue Cross Blue Shield of North Carolina has made accessing this juggernaut of financial benefits near-impossible for the wellness-focused companies that need it most: independently owned pharmacies.

Last month, writer and gardener Frank Hyman called Russell’s Pharmacy & Shoppe in historic Old East Durham to ask about using the $500 gift card he had received in the mail from Blue Cross.

Hyman was one of thousands of Blue Cross subscribers who received gift cards that the insurance provider had distributed to its members to provide them with a little financial relief in the face of a once-in-a-century pandemic.

Hyman wanted to use the card at the two-year-old, Black-owned Russell’s Pharmacy, which is located on Angier Avenue. But his plan skidded off the rails when co-owner and pharmacist Darius Russell told him the drugstore lacked a credit card processing machine that could process the 19 digits on the gift card. Cards like Visa and MasterCard normally have 16, Russell explained.

Hyman wasn’t pleased.

“BCBS is giving him and other local, Black-owned pharmacies the run around so their customers can’t use their debit card with them,” he wrote in an email to the INDY

Black-owned pharmacies aren’t the only ones who can’t cash in on the wellness card bonanza.

Whether intentional or otherwise, it appears the Blue Cross wellness card favors national pharmacy chains such as Walgreens, CVS, and Walmart while giving the boot to local, independently owned druggists struggling to make an extra dollar during a pandemic that has shuttered many small businesses across the Triangle.

The wellness card program has the added effect of “keeping their subscribers from spending their own money at the pharmacy of choice,” Hyman says.

Russell figures he’s lost at least a couple thousand dollars in the month since the health and wellness gift card program began.

“Yesterday, a patient with $400 on her card told me she would love to spend it locally,” he says. “I told her, ‘I wish I could, but I don’t have the capability yet.’”

Russell says he’s called pharmacist colleagues in Durham, Carrboro, and Raleigh about the multi-million dollar gift card effort that has left them out in the cold.

“It’s the same thing—they’re frustrated,” he says. “This is money that people could be spending locally, that we’re literally missing out on. My fear is we’ll get the [card reader] 30 days after the holidays. But by then, all of that money will have walked out the door.”

Vip Patel owns Gurley’s Pharmacy in downtown Durham. He tells the INDY that the potential loss of a few thousand dollars could have effects beyond the holiday season. He explains that independent pharmacies aren’t just losing revenue; they could also lose patients, who might feel the businesses can’t take care of all of their needs.

“The patient learns they can’t use their card, and they get frustrated and go to the large chains,” Patel says. “They start to feel that we can’t take care of the patient as a whole, so what’s the use of going there?”

“I have a BCBS card, and I can’t use it in my own store,” he adds. “But I’m not going to use it at a chain pharmacy. Are you kidding me?”

The gift card wouldn’t work for Maria Herrera at Josefs Pharmacy on Roxboro Street in downtown Durham, where she has been working since March.

“I had to go to Walgreens,” she tells the INDY.

Russell says he first became aware of the health and wellness cards just before Thanksgiving, when one of his patients called the pharmacy to tell him that she had an over-the-counter gift card from BCBS.

“She asked me about being able to spend the $350 on the card here,” Russell says. “I told her, ‘Sure.’”

Russell subscribes to Blue Cross’s health insurance coverage, too. When he went home that evening, he found that the company had mailed him a card that had been loaded with $400.

“So, I was excited,” he says.

The next day, when the customer came in to use the card, Russell noticed it had 19 digits on the front.

He ran the card through the store’s card reader, but it was a no-go. He kept trying. Still no success. So he called the company that handles his credit card processing.

“They had no idea what I was talking about,” Russell says.

He looked on the back of the gift card and called a 1-800 number that turned out to be for InComm Payments, an Atlanta-based company that partners with retailers to provide an array of financial services, including prepaid cards.

Russell says he eventually received a call back from Melissa Flynn-Coffield, who works as an independent channel manager with Incomm Payments.

“She told me I would receive a free card reader, and that the company didn’t realize there were so many independently owned pharmacies in the area,” Russell says. “She made it seem like BCBS had dropped the ball.”

Russell says Flynn-Cofield promised that the company would circumvent the application process that usually takes 30 days to send out a card reader. Instead, he would receive it “as soon as possible.”

Russell felt even more reassured the following day, when he received an email from Flynn-Coffield. She promised that help was just around the corner, and that “we are so close.” 

A week later, Russell still hasn’t seen an application or details about how to get on board, he says.

Patel hasn’t gotten his machine, either.

 “We are still waiting for the special credit card processing machine,” he says.

Russell and Patel both say it would have helped if independent pharmacy owners had been given a heads-up before the card was rolled out to the public. 

They said more information upfront—especially about the special card readers—would have given them a chance to decide if they wanted to even participate in the program, which is funded by the Affordable Care Act’s temporary “risk corridor” program, designed to “stabilize health insurance premiums and backstop insurance companies willing to offer a new and risky product,” according to the Commonwealth Fund.

“Not only are we losing money, but we never got a chance to decide if we wanted to figure it out or not,” Russell says about the card readers.

Prasanna Bafna, who owns the Southpoint Pharmacy on Fayetteville Road, near Southpoint Mall, tells the INDY that he called “10 or 11” BCBS NC departments after he was unable to process the cards for his customers.

“I spent around 15 to 20 hours on the phone with Blue Cross Blue Shield,” he says.

What Bafna heard from Blue Cross officials about when small pharmacies will be able to process the card appears to be at odds with what Russell and Patel were told.

“We were told we would have to wait until the New Year to get started,” he says.

Incomm Payments officials could not be immediately reached for comment.

Blue Cross NC spokeswoman Jami Sowers tells the INDY that participating retailers in the wellness card program “were determined, based on InComm Payments’ existing network of pharmacies; locally, regionally and nationally.”

Sowers says the company is now working to ensure that all independent pharmacies across the state are able to access the benefit dollars from the gift card, and with future programs.

Sowers adds that Blue Cross will also cover the $250 cost of a card processing machine for independent pharmacies that wish to join. Sowers notes that 14 independent pharmacists are already participating in the program, and at least 19 are in the process of being connected. But, according to the most recent figures from the N.C. Board of Pharmacy, from 2018, there are more than 1,800 independent retail pharmacies in the state. That means that less than one percent of independent pharmacies are set up with the Blue Cross program. If local pharmacists’ experience is any indication, the rest are worse off for it.

Bafna, for example, says the loss of revenue has been significant.

“A lot of customers come to the counter and ring up $30 to $40 in purchases and say, ‘We want to use the card,’” he says. “We have to tell them they can’t use the card and [to] put the items back on the shelf.”

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