In a Major Victory for Patient Access, WSPA, NACDS, NCPA Help Ensure Washington State Makes the Move to Cost-Based Dispensing Fees

Settlement reached with the State of Washington brings to an end Washington State’s flawed pharmacy reimbursement plan; offers hope for the ability of pharmacies to continue to meet patients’ needs in Washington State and across the nation

NCPA September 13, 2023

The Washington State Pharmacy Association (WSPA), the National Community Pharmacists Association (NCPA), and the National Association of Chain Drug Stores (NACDS) are applauding a major victory in Washington State for patient access and for the viability of the pharmacies of all sizes and types on which they rely.

WSPA, NCPA and NACDS today announced that they have negotiated an unprecedented settlement with the State of Washington in their joint six-year state lawsuit challenging Washington State’s failure to move to cost-based dispensing fees.

In exchange for the pharmacy groups dismissing their lawsuit, Washington State has agreed to:

  • conduct a cost of dispensing study to move to cost-based dispensing fees, subject to necessary state and Centers for Medicare and Medicaid Services (CMS) approval;
  • provide more than $60 million in retroactive payments to pharmacies in Washington State’s fee-for-service Medicaid program— covering under-paid claims from April 1, 2017-July 1, 2023; and
  • use, as an intermediate step, Oregon’s cost-based dispensing fees and tiers from July 1, 2023, going forward, until a new cost-based dispensing fee obtains necessary state and CMS approval.

The positive news follows a critical and final decision by CMS in June 2022 – facilitated by joint WSPA, NCPA and NACDS federal litigation — in which the Agency reversed its approval of Washington State’s unlawful pharmacy reimbursement plan, and determined that the Washington State Plan Amendment, which unfairly reimbursed pharmacies of all sizes well-below cost, was disapproved.

“Pharmacies serve as lifelines for Washington State communities, delivering vital medications, guidance, vaccines, and indispensable services,” said WSPA CEO Jenny Arnold. “For six years, they have cared for Medicaid patients, hoping their care would be rightly reimbursed. This settlement marks a crucial stride in preserving access to care, keeping pharmacy doors open, and rectifying the long-standing underpayment of essential healthcare.”

“This is a massive victory for independent community pharmacists in Washington state and the patients they serve. Pharmacies that are reimbursed below their cost cannot remain in business, and patients lose access to their most trusted healthcare providers,” said NCPA CEO B. Douglas Hoey. “We are very pleased pharmacists in Washington will finally be reimbursed fairly, and that they will recoup some of the loses imposed on them by the previous system.”

“This is a decisive victory for Washington State pharmacies and their patients, and it also demonstrates the importance of fairness for vulnerable Americans across the nation and the pharmacies that serve them,” said NACDS President and CEO Steven C. Anderson. “The move to cost-based dispensing fees in the states is critical to support the ability of pharmacies to continue to deliver the essential health and wellness services that patients rely on and expect.”