NACDS, WSPA and NCPA file legal brief in Washington’s Medicaid lawsuit

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NACDS, WSPA and NCPA file legal brief in Washington’s Medicaid lawsuit

06/29/2018
The National Association of Chain Drug Stores, Washington State Pharmacy Association and the National Community Pharmacists Association filed a key legal brief with the Washington State Court of Appeals, that challenges the state’s refusal to reimburse community pharmacies for the cost of providing care and services to disadvantaged Medicaid patients.

The legal brief states that because Washington’s fees do not reimburse pharmacies for their costs, those fees are dramatically lower than those of any other state in the country, the organizations noted.

All companies also argue that the state is reimbursing pharmacies far less than it costs pharmacies to serve the state’s Medicaid patients.

The Medicaid program under federal law states that each state must compensate pharmacies for the actual costs incurred but Washington State’s do not. The brief argues that it is unlawful and inappropriate for the state to reimburse pharmacies below their costs.

In 2016, the Centers for Medicare & Medicaid Services, or CMS, which administers Medicaid reimbursements, put in place a new rule changing how states must reimburse pharmacies. A key part of the rule indicates that states must reimburse pharmacies for their actual costs in dispensing drugs to Medicaid beneficiaries.

The legal brief argues that Washington State did not comply with the new CMS rule for cost-based dispensing fees and instead kept dispensing fees the same. In order to do this, it had to rely on data from private insurance plans—which do not track actual costs, as required by the CMS rule. Washington State kept in place the same dispensing fees it established many years ago before the CMS rule was put in place.

NACDS, NCPA and WSPA also sent a letter to CMS asking the agency to delay no longer in requiring Washington to comply with federal Medicaid reimbursement law like other states.

The brief states that Washington State’s actions “exceed its authority and are arbitrary and capricious.” The brief notes that Washington’s “rule and decision to pay below-cost dispensing fees are unlawful” and the state should be ordered “to set new rates that follow federal law,” the companies said.