Pharmacy groups earlier this month hailed a federal judge for temporarily blocking a Medicaid pharmacy reimbursement cut in Washington state.

Medicaid pharmacy reimbursement, pharmacy reimbursement, Medicaid, Washington state, pharmacies, prescriptions, prescription drugs, Washington State Pharmacy Association, National Association of Chain Drug Stores, National Community Pharmacists Association, NACDS, Steve Anderson, U.S. District Judge Robert Bryan, Julie Akers, Bartell Drug, Walgreen Co., Walgreens, Kermit Crawford, Geoff Walden

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Inside This Issue - News

Judge blocks Medicaid cuts in Washington state

April 20th, 2009

TACOMA, Wash. – Pharmacy groups earlier this month hailed a federal judge for temporarily blocking a Medicaid pharmacy reimbursement cut in Washington state.

U.S. District Judge Robert Bryan on March 31 issued a temporary restraining order against the cut, which was due to take effect at midnight that night. The plan to implement the cut failed to meet procedural requirements and was unfair to pharmacies, Bryan ruled.

He said he would decide by April 9 whether to lift the restraining order or issue a preliminary injunction halting the cut indefinitely. But he later postponed his decision until May 18, leaving the restraining order in place until that date.

The Washington State Pharmacy Association, the National Association of Chain Drug Stores and the National Community Pharmacists Association filed a joint lawsuit on March 30 challenging the plan to cut reimbursement for brand name drugs to the average wholesale price minus 20%. That would make the state’s reimbursement rate the lowest in the nation.

“This is a tremendous victory for patients and pharmacy in Washington state,” NACDS president and chief executive officer Steve Anderson said this month. “While we still have a fight ahead of us in permanently preventing these cuts from taking effect, the court’s ruling will help stave off the cuts so that patients are able to access their prescription medications and other services from their neighborhood pharmacy.

“This poorly calculated effort to save money only penalizes Washingtonians, and the potential costs to patients and health care over the long term could certainly be more devastating.”

The cut would have meant dispensing many drugs at a loss, said Julie Akers, pharmacy district manager at Seattle-based Bartell Drug. Bartell announced that it would accept no new Medicaid patients if the cut went through.

Walgreen Co. announced that it would withdraw 44 of its pharmacies from the state’s Medicaid program as of May 1 if the cut took effect. The pharmacies represent more than 60% of the company’s Medicaid business in the state and are found in large and small communities.

“The state could fill its Medicaid budget gap in a number of other ways,” said Walgreens senior vice president of pharmacy Kermit Crawford. “As an example, independent and chain pharmacies have identified as much as $90 million in potential savings through more effective medication management. These are sound alternatives to payment cuts to pharmacies.”

Walgreens does more than the average Washington pharmacy to save the state money by filling prescriptions with generics, added Crawford. The drug chain fills 77% of state Medicaid prescriptions with generics; the state average is 63%. Bringing the average up to Walgreens’ level “could, by itself, provide the Medicaid program with the savings it’s looking for,” he said.

Washington has “the worst payment rate in the country for brand name medications” and one of the worst for generics, Crawford pointed out. “We can’t operate as usual under that situation.”