CVS Says It Will Stop Filling Prescriptions for Massachusetts Medicaid Beneficiaries If Payment Cut Stands
CVS Corp., the largest pharmacy chain in Massachusetts, might have to stop filling prescriptions for Medicaid beneficiaries, reduce its hours of operation and close stores if a 12% Medicaid rate cut as contained in the budget recently passed by the state Legislature is approved, the Providence Journal reports. CVS, which fills one out of every three prescriptions for the state's Medicaid beneficiaries, maintains that "deep cuts" in reimbursement rates to pharmacies would cause the company to lose money (Fasig, Providence Journal, 7/26). The proposed payment reduction also could affect other pharmacies throughout the state and may cause independent pharmacies to shut down, the Boston Herald reports. On prescriptions for Medicaid beneficiaries, pharmacies currently receive reimbursement equal to the wholesale cost of the drug plus 10% and a $3 dispensing fee. According to Dan Haron, vice president of Brooks Pharmacy, as it is, pharmacies "barely break even" because the actual cost of dispensing a prescription is $9 to $10. Under the budget plan approved by the state Legislature and currently being considered by acting Gov. Jane Swift (R), pharmacies would receive reimbursement for the cost of the drug minus 2% and the $3 dispensing fee. The cut would mean a loss of $120 million for pharmacies, the Herald reports (Powell, Boston Herald, 7/26).
Criticizing the Cut
Thomas Ryan, chairman and chief executive officer of CVS, said, "The reimbursement rates set forth in the proposed budget are lower than those of any of the other 32 states in which we do business and are not economically rational." CVS has requested that Swift hold a hearing with the state Division of Medical Assistance to determine whether the proposed reimbursement reduction would affect beneficiaries' access, the Providence Journal reports (Providence Journal, 7/16). A spokesperson for Swift said the governor is reviewing the state Legislature's budget but has not made any decisions regarding the reimbursement rate reduction (Boston Herald, 7/26).
