Politics & Government

State wields hatchet, not ax

SEATTLE – Washington state officials moved again Friday to cut Medicaid prescription reimbursement rates to drugstores but only by one-third as much as previously sought.

The proposed rate as of July 1 would be 84 percent of the average wholesale price for brand-name drugs, 2 percentage points lower than the current 86 percent, according to a statement issued Friday by the Department of Social and Health Services.

The change is expected to save about $12 million a year, a figure that includes state and federal money, said Doug Porter, state Medicaid director.

A state analysis concluded that a 3 percentage point cut would have been justified, Porter said, but budget legislation precludes a reduction bigger than 2 percentage points.

Earlier this year, while budget legislation was being debated in Olympia, the state agency attempted to cut the reimbursement rate to 80 percent of the average wholesale price on April 1, but drugstores went to court and a federal judge blocked the move.

Porter estimated an 80 percent rate would have saved about $25 million a year in state and federal dollars.

The chief executive of the Washington State Pharmacy Association, Jeff Rochon, did not immediately return a call or e-mail request for comment.

While the court case was pending, Walgreen Co. said that if an 80 percent rate were implemented, Medicaid prescriptions no longer would be filled at 44 of its 111 stores in Washington. Porter said the company recently informed the governor’s budget office that no similar action will be taken if the rate goes to 84 percent.

Porter said the state also is planning other pharmacy purchasing and payment changes to save taxpayers an estimated $183 million in the two years beginning July 1. Those moves include a greater reliance on generic drugs and tighter controls on prescriptions for narcotics and some other medications.

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