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Pharmacy groups applaud CMS’ rejection of below-cost Medicaid dispensing fees

The National Association of Chain Drug Stores, or NACDS, the Washington State Pharmacy Association, or WSPA, and the National Community Pharmacists Association, or NCPA, praised the Centers for Medicare & Medicaid Services, or CMS, for its rejection of Washington State’s below-cost and lowest-in-the-nation Medicaid pharmacy dispensing fees.

In 2016, CMS put a new rule in place, which changed states’ calculation of reimbursement to pharmacies for Medicaid prescriptions. A key part of the rule indicates that states must at least reimburse pharmacies for their actual costs in dispensing drugs to Medicaid beneficiaries. The associations have advocated in all branches and levels of government that Washington State’s below-cost reimbursement violates the new rule, jeopardizes reliable patient access to medications responsible for ensuring patient health, and leads to more costly forms of care that result from untreated conditions.

“This action by CMS should spur Washington State to increase its dispensing fees and demonstrate to other Medicaid programs that dispensing fees must cover pharmacies’ costs. This increase in dispensing fees must be supported by pharmacy cost data, and under federal rules should be applied retrospectively effective April 1, 2017. The State has indicated it plans to ask CMS to reconsider its decision,” the pharmacy groups said.

NACDS, WSPA, and NCPA issued a joint statement in support of CMS’ decision: “CMS has taken action that is consistent with the Covered Outpatient Drugs final rule and that is consistent with the health and wellness of our most vulnerable patients. We strongly support this pivotal development, which will prove highly significant for pharmacy patient care in Washington State and nationwide. We will continue to advocate in support of this pro-patient and pro-pharmacy position.”

In June of this year, NACDS, NCPA, and WSPA 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.”

In March 2017, NACDS, WSPA, and NCPA sued the State of Washington to stop a “substantively and procedurally flawed” rule that would pay community pharmacies below the actual cost to dispense Medicaid prescriptions. An important brief filed this summer in the Washington State Court of Appeals described the associations’ position in great detail. NACDS, WSPA and NCPA are continuing their litigation challenging the state’s inadequate dispensing fees.
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