Rule would pay pharmacies below cost for Medicaid scripts

OLYMPIA, Wash. — The National Association of Chain Drug Stores, National Community Pharmacists Association and Washington State Pharmacy Association (WSPA) are suing Washington state over a rule they said  would pay pharmacies below the actual cost to dispense Medicaid prescriptions.

The associations said Thursday that they filed an emergency motion for stay in the Superior Court of the State of Washington (Thurston County) to halt what they called “substantively and procedurally flawed” rule. They claim the measure would threaten access to medications needed to ensure patient health and prevent more costly forms of care.

“This motion seeks to halt further reimbursement cuts until such time as the state properly implements Medicaid reimbursement rates that cover the actual costs that pharmacies incur when they serve Medicaid patients, as required by law,” NACDS, NCPA and WSPA wrote in the March 30 motion in the Washington Superior Court. Also filed by the groups was a petition for declaratory relief and emergency stay.

At issue is rule WSR 17-07-001 by the Washington State Health Care Authority, which the associations said changes how the agency calculates pharmacies’ acquisition cost for drugs and pares reimbursement for medications dispensed to Medicaid patients. They noted that the state’s rule doesn’t make adjustments to account for the professional dispensing fee — contrary to a federal rule from the Centers for Medicare & Medicaid Services of the U.S. Department of Health and Human Services.

The dispensing fee must cover actual costs to fill the prescription, such as the pharmacist’s professional services, yet the current dispensing fee in Washington state is much lower than dispensing cost identified in studies conducted by other states and experts, according to NACDS, NCPA and WSPA.

For example, an independent study commissioned by NACDS and NCPA found that the cost of dispensing in Washington state is more than double the proposed professional dispensing fee for Medicaid prescriptions in the state’s new rule.

The associations also claim Washington state violated rulemaking procedures. They said the state informed pharmacies after the formal comment period and after it issued the final rule that dispensing fees wouldn’t be adjusted, thereby not giving pharmacies sufficient opportunity for comment, as required by the state’s Administrative Procedure Act.

“The state’s new rule is both substantively and procedurally flawed,” the associations said in their motion. “First, it should be stayed because it constitutes arbitrary and capricious agency action that violates federal law. Second, it should be stayed because the state failed to follow the clear procedural directives that apply when amending a rule.”

In a survey conducted by Morning Consult and commissioned by NACDS in March 2017, 80% of registered voters in Washington state said they believe pharmacy benefits should be covered under Medicaid. Eighty-eight percent of the poll’s respondents also think pharmacies offer easy access, the highest accessibility among providers tested, which included pharmacies, doctors, emergency rooms, nurses, primary care doctors and specialist physicians.