Politics & Government

State drops attempt to cut Medicaid drug payments

Washington state has dropped an attempt to cut Medicaid prescription reimbursement rates to drugstores to the lowest levels nationwide, ending a legal struggle.

As a result of budget legislation the state will continue to pay 86 percent of the average wholesale price on name-brand drugs for Medicaid prescriptions through at least July 1, Jim Stevenson, a spokesman for the Department of Social and Health Services, said Wednesday.

Stevenson said agency officials had not decided whether to seek a smaller rate cut after that date.

The state agency moved to lower the rate to 80 percent April 1. State Medicaid director Doug Porter said he knew of no other state with a reimbursement rate that low but maintained it was needed to save about $13.4 million a year.

Pharmacy operators and an AIDS-HIV patient filed suit in federal court in Tacoma and a judge blocked the change, ruling they likely could prove that their concerns had not been adequately considered and that the change would reduce the quality of care for Medicaid beneficiaries.

Walgreen Co. said that if the lower rate took effect, Medicaid prescriptions no longer would be filled at 44 of its 111 stores in the state. Bartell Drugs, a 55-store chain in the Puget Sound area, planned to stop accepting new Medicaid patients. Some small drugstores in remote areas said they might be forced to close.

Medicaid, funded jointly by the federal government and the states, is commonly known as the payer of last resort for the indigent. The last reimbursement rate change in Washington was a cut to 86 percent from 89 percent in 2002.