Pharmacy Groups Applaud CMS’ Motion to Remand the Approval of Washington State’s Unreasonably Low Medicaid Reimbursement

NCPA July 9, 2021

ALEXANDRIA, Va. (July 9, 2021) — The Washington State Pharmacists Association, the National Community Pharmacists Association, and the National Association of Chain Drug Stores today cheered a move by the Department of Justice that could signal victory in their case against unfairly low reimbursements for pharmacies that treat Medicaid patients.

On Jan. 19, 2021, the last day of the previous administration, the acting CMS administrator approved a scheme by Washington State to reimburse pharmacies for Medicaid patients far below the actual cost of dispensing prescriptions, contrary to the law. The decision was a sharp departure from CMS’ previous position, which was that Washington’s reimbursement was unlawful primarily because it failed to consider the cost of dispensing. WSPA, NCPA and NACDS sued CMS for the inexplicable and unsupported about-face, accusing CMS of violating its own rules. Today, the Department of Justice, which represents CMS in the case, filed a motion asking a federal judge for the Western District of Washington to remand the matter back to CMS because it “agrees with Plaintiffs that the final decision approving the Washington State Plan Amendment” was unsupported by the administrative record before CMS and would not survive the legal challenge.

“This is a big victory for Washington pharmacies and their patients,” said Jenny Arnold, WSPA CEO. “The Washington State Medicaid reimbursement rate is unsustainable. It’s the lowest in the country and less than half what pharmacies are paid in every neighboring state. Our pharmacies are forced to make a terrible choice between losing money or turning away patients on Medicaid.” 

The government’s motion to remand also asks the court to dismiss the matter without prejudice, which would allow the litigants back into court should CMS falter again in its approach.

“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. “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.”

“This issue has serious ramifications for the viability of pharmacies of all sizes and for the patients who rely on them for their health and wellness,” said NACDS President & CEO Steven C. Anderson. “The COVID-19 pandemic has illustrated yet again the importance of addressing the health care needs of the most vulnerable. CMS’ motion offers hope for the ability of pharmacies to continue to meet patients’ needs in Washington State and across the country and for the interests of good public policy to be served.”