CMS rejects Louisiana proposal to increase Medicaid dispensing fee

June 4, 2008

The Centers for Medicare & Medicaid Services has turned down a proposal from Louisiana to increase the state's Medicaid dispensing fee to more than $10.

The Centers for Medicare & Medicaid Services for the second time in as many years has rejected a Louisiana proposal to raise the dispensing fee for Medicaid drug reimbursement. The proposal would have increased the dispensing fee from $5.77 to $10.10 for all medications. CMS also rejected an earlier proposal to increase the fee pharmacists receive to $10 for brand drugs and $15 for generic medications. In turning down the state proposal, CMS questioned the need for an increase, since the Louisiana dispensing fee was one of the highest in the nation. CMS also questioned the accuracy of a study commissioned by the state that found that the average cost to dispense medications was $8.32. In a letter to the Louisiana department of health and hospitals, the agency also noted that the state had not made a convincing argument for the need to increase the fee. In its application Louisiana officials had pointed out that the CMS' plan to implement reimbursement based on its calculation of average manufacturers price was expected to reduce pharmacy reimbursement. Any increases in Medicaid reimbursement by the states must be approved by CMS.

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