Lawmakers are trying to craft changes in how the state administers Medicaid as the April 1 budget deadline approaches.

It's an effort to save small pharmacies without hurting hospitals.

Some local pharmacists are excited they could get major relief from changes, while some health care providers are concerned their programs for lower-income patients could be gutted.

Joseph Cruz says he prefers going to Prestige Pharmacy in Middletown instead of chain pharmacies because of the community.

"You can actually talk to the pharmacist and chit-chat. Say, 'Is this the right dosage? Is this the right medication?’” Cruz says.

Prestige Pharmacy owner Ajay Patel says he gets reimbursed a few cents for most Medicaid prescriptions and ends up taking a loss on each refill. That's tough when 40% of his customers are Medicaid recipients.

Patel says companies hired by the state to negotiate drug prices and set reimbursement rates give good deals to chain pharmacies and hospitals, known as Pharmacy Benefit Managers, while giving terrible deals to smaller pharmacies.

"They control everything. So, what we get paid, with the fees and everything, it's up to them,” Patel says.

State Sen. James Skoufis has been pushing a plan to do away with Pharmacy Benefit Managers and let the state directly negotiate prices and reimbursements. His plan would also set minimum reimbursement rates for pharmacies like Prestige at just over $10 per prescription.

"Something must be done to address this crisis,” Skoufis says. “It would save the state and taxpayers ...actually hundreds of millions of dollars."

Groups such as the American Hospital Association and Children's Hospital Association are concerned that the steep discounts on drug prices they get from Pharmacy Benefit Managers would go away and that they'd lose millions that should go toward community health.

The groups say it would hurt patients who are uninsured, underinsured or on Medicaid.

Skoufis promises the state would fill in those gaps, using money saved under the new plan.

"We are adamant that we are not supporting 'fee for service' unless the providers are made whole. It's part of the package,” he says.

The state budget must be finalized and approved by the state Legislature by April, and this Medicaid provision could end up changing.

State Sen. Gustavo Rivera is working on an alternative that would raise reimbursements for small pharmacies but keep Pharmacy Benefit Managers in the equation.