Pharmacy Groups File Legal Brief in Washington State Medicaid Lawsuit

July 5, 2018

Three pharmacy groups sue Washington State over Medicaid Program.

Retail pharmacy’s two largest trade organizations and the Washington State Pharmacy Association (WSPA) have filed a legal brief with the Washington State Court of Appeals, challenging the state’s refusal to reimburse community pharmacies for the costs of providing care and services to Medicaid patients.

The brief filed by NACDS, National Community Pharmacists Association, and WSPA, states: “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 contend that the state is reimbursing pharmacies far less than it costs pharmacies to aid the state’s Medicaid patients. In a press release, NACDS states that under the federal Medicaid program, each state sets fees to reimburse pharmacies for dispensing medications to low-income people. Those fees, NACDS asserts, 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.

Scott Brunner, senior VP of communications and state government affairs for NCPA tells Drug Topics: “It’s pretty simple. We think the lower court in Washington got it wrong-the state didn’t follow the CMS rule when they set the dispensing fees – so we’re taking our arguments to the court of appeals. The aim is for Washington State Medicaid agency to establish and pay dispensing fees that appropriately reflect pharmacies’ real costs of dispensing medications and providing services to Medicaid patients,” says Brunner,

In the statement, NACDS notes that in 2016, CMS 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 CMS rule requires states to reimburse pharmacies for the costs of purchasing drugs wholesale, i.e., ingredient costs, and for the dispensing fees to Medicaid patients. The dispensing fees must cover other costs of serving Medicaid patients, including reimbursing pharmacies for the costs of dispensing medications.’

The brief contends that Washington State did not obey the new CMS rule for cost-based dispensing fees but rather kept dispensing fees the same. In order to do this, the state 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.

The three groups 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.”