Washington State Medicaid access in limbo
The state of Washington is trying to keep Medicaid patients out of pharmacies. That’s the charge leveled by the Washington State Pharmacists Association (WSPA), National Association of Chain Drug Stores (NACDS), and National Pharmacists Association (NPA).
The three groups recently filed suit to stop Washington from cutting Medicaid reimbursement by 60 percent, saying the cut would seriously reduce access to pharmacy care. A U.S. District Court promptly issued a temporary restraining order blocking the cuts for ten days. The state later asked that the temporary order be extended until May 18, when the court will hear arguments for a preliminary injunction. The court could grant a preliminary injunction, continue the restraining order, or allow the cuts to go into effect.
“If these cuts go through, pharmacies would be losing $5 on every brand-name prescription,” said Holly Henry, pharmacy owner and NCPA president. “I don’t know many businesses that could survive by losing $5 on every sale.”
Chain stores apparently agree. Bartell Drugs, a large regional chain, announced that it would stop accepting new Medicaid patients on April 1, when the cuts were scheduled to go into effect. Walgreens said it would stop filling Medicaid scripts at 44 of its 111 Washington pharmacies on May 1. The 44 stores account for 60 percent of the chain’s Medicaid sales in Washington.
A company spokesman said the deadline is on hold until the District Court hearing on May 18. If the reimbursement cuts go through, Walgreens will stop taking Medicaid scripts. It won’t be the first time Washington pharmacies have said no to reimbursement cuts. In 2001, Henry stopped accepting outpatient Medicaid scripts when the state cut reimbursement from AWP minus 12 percent to AWP minus 14 percent.
She continued to accept Medicaid scripts for long-term-care patients, most of whom are now covered by Medicare Part D. In 2008, Walgreens accounted for $49 million of the $413 million Washington paid in state Medicaid reimbursement, according to Doug Porter, assistant secretary for health and recover service in the state Department of Social and Health Services. The chain filled about 18 percent of all Medicaid scripts in the state.
“We have made the decision to stop filling Medicaid prescriptions in these pharmacies after long and careful deliberations,” said Kermit Crawford, Walgreens senior vice president of pharmacy. “The state could fill its Medicaid budget gap in a number of other ways. Independent and chain pharmacies have identified as much as $90 million in potential savings through more effective medication management. There are sound alternatives to payment cuts to pharmacies.”
One of those alternatives is medication management, including increased use of generics. Another alternative is federal stimulus dollars that have been designated for state Medicaid budgets. “Congress has said this money is an alternative to state reimbursement cuts,” said NACDS legal counsel Don Bell. “We believe it should be used as Congress intended.”
So far, Bell added, Washington governor Chris Gregoire has declined to request federal dollars to help ease the state’s Medicaid shortfall. At issue is a two-year state budget that would cut reimbursement for brand-name Medicaid prescriptions from the current AWP minus 14 percent to AWP minus 20 percent. The proposed rate works out to a 60 percent reimbursement reduction on the typical $100 Rx, Henry said.
Washington, like most states, is in the midst of a budget crisis because of the recession, said WSPA chief executive officer Jeff Rochon. The proposed budget includes about $200 million in overall Medicaid cuts, including $13.5 million to $14 million from pharmacy reimbursement cuts.
The loss will put many independent pharmacies out of business, he said. Inner city and rural pharmacies, which have the higher percentage of Medicaid patients, will be particularly hard hit. Many counties are currently served by only one pharmacy, which may well be forced out of business.
Once those stores close, patients will be without pharmacy access. “You have to get the state to realize that what they are doing is hurting patients,” said John Coster, NCPA senior vice president of government affairs. “Medicaid is all about providing healthcare to low-income patients.”
Federal law requires states to provide Medicaid patients with the same level of service, access, and quality that non-Medicaid patients receive, Bell added.
“A state can’t cut reimbursement rates so low that it reduces the quality of care or reduces provider participation below that of the general population,” he said. “State law also requires the health department to assess the impact on access of any proposed rate changes and consult with stakeholders. Washington failed on both counts.”