Judge sends Washington’s Medicaid pharmacy reimbursement plan back to CMS

The Washington State Pharmacy Association, the National Association of Chain Drug Stores, and the National Community Pharmacists Association praised the U.S. District Court for the Western District of Washington for approving a motion filed last week by the U.S. Department of Justice seeking to remand back to the Centers for Medicare & Medicaid Services an unlawful, below-cost Medicaid pharmacy reimbursement plan in Washington state.

The pharmacy groups had filed a lawsuit challenging the plan, saying it may jeopardize both reliable patient access to care and pharmacy viability alike. The court order also dismisses the matter without prejudice, which would allow the litigants back into court should CMS falter again in its approach, the groups said. 

The groups pointed out that "In a sharp departure from CMS’ previous position, the Trump administration’s acting CMS administrator had approved this flawed scheme on Jan. 19, 2021, the last day of the previous administration. CMS’ previous position was that Washington’s reimbursement was unlawful primarily because it failed to consider the cost of dispensing."

WSPA, NCPA and NACDS sued CMS, accusing it of violating its own rules.

The organizations said that if CMS disapproves the plan, Washington should be required to submit a new Medicaid state plan amendment. They noted that a new plan should reflect the cost of dispensing in the state and create a reimbursement rate consistent with federal Medicaid rules.

“Pharmacies are essential sources of health care, ensuring the safe and appropriate use of medications through their highly trained pharmacists and technicians. The Medicaid pharmacy dispensing fee must support patient care for our state’s most vulnerable population,” said Jenny Arnold, WSPA CEO.  “We celebrate CMS upholding the importance of patient access to quality care by remanding the state plan agreement.”

“This is a precedent-setting fight that we have engaged in to protect vulnerable Medicaid patients and the viability of pharmacies’ work on their behalf,” said NACDS president and CEO Steve Anderson. “The court’s swift action is an extremely positive step in reversing a completely unjustifiable approach to Medicaid pharmacy reimbursement in Washington state and to the Trump administration’s response to it in one of its final actions. This sends a vivid message throughout the nation.”

“Pharmacy reimbursement rates can’t be haphazard shots in the dark; they must consider the actual pharmacy costs associated with filling patients’ prescriptions,” said NCPA CEO Douglas Hoey. “The federal government formally rejecting this plan is a terrific development for patients and pharmacies in Washington and across the country. Officials should be on notice that you cannot get away with an unfair reimbursement rate.”