Pharmacy Groups Back Washington State Court Decision on ‘Unsustainable’ CMS Reimbursement Law

The US District Court for the Western District of Washington state has approved a recently filed motion that requires the Centers for Medicare & Medicaid Services (CMS) to reconsider their below-cost reimbursement plan that was implemented in January 2021.¹

The decision was applauded by the Washington State Pharmacists Association (WSPA), the National Community Pharmacists Association (NCPA), and the National Association of Chain Drug Stores (NACDS) in a news release yesterday.¹ Jenny Arnold, WSPA CEO, described the Washington State Medicaid reimbursement rate as “unsustainable” and “the lowest in the country and less than half what pharmacists are paid in every neighboring state.”

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CMS approved the reimbursement plan on the last day of the Trump administration, a move that contradicted their initial position that Washington’s reimbursement was unlawful because it failed to consider the cost of dispensing. WSPA, NCPA, and NACDS filed a lawsuit, arguing that the unsupported reversal was in violation of its own rules.² It also has the potential to disrupt reliable patient access and pharmacy viability, according to the news release.

“Washington’s reimbursement rate is completely unrealistic and unfair, and the outgoing administration made a hasty decision at the last possible moment to approve it in violation of its own rules,” said NCPA CEO B. Douglas Hoey.¹ “We’re proud to fight alongside WSPA and their members in a case that has national implications. If Washington state can get away with an unfair reimbursement rate, it could spread.”

CMS must now decide whether to support or reverse its January decision. The court decision also makes room for further litigation in the event that the pharmacy groups find CMS’ response inadequate. Should CMS disapprove of the below-cost plan, the next step is to submit a new Medicaid state plan amendment. Of course, the pharmacy groups are looking for fair reimbursement rates that support the continued viability of pharmacies.

“Pharmacy reimbursement rates can’t be haphazard shots in the dark; they must consider the actual pharmacy costs associated with filling patients’ prescriptions,” Hoey said. “The federal government formally rejecting this plan is a terrific development for patients and pharmacies in Washington and across the country. Officials should be on notice that you cannot get away with an unfair reimbursement rate.”

References

1. Federal Judge Sends Washington’s Below-Cost Medicaid Pharmacy Reimbursement Plan Back to CMS. News Release. NACDS; July 14, 2021. Accessed July 15, 2021. https://www.nacds.org/news/federal-judge-sends-washingtons-below-cost-medicaid-pharmacy-reimbursement-plan-back-to-cms/.
2. Pharmacy Groups Applaud CMS’ Motion to Remand the Approval of Washington State’s Unreasonably Low Medicaid Reimbursement. News Release. July 9, 2021. Accessed July 14, 2021. https://ncpa.org/newsroom/news-releases/2021/07/09/pharmacy-groups-applaud-cms-motion-remand-approval-washington