Massachusetts Officials Say They Will Consider Report on Medicaid Pharmacy Payments When Reviewing Payment Cut

Revisions to a federal study that prompted Massachusetts officials to cut Medicaid pharmacy reimbursement rates by 10% indicate that states may not be overpaying pharmacies as previously thought, the Boston Herald reports. The original report suggested that states were overpaying pharmacies for drugs dispensed to Medicaid beneficiaries, but a revised version of that report released Sept. 16 by the HHS Office of Inspector General shows that may not be the case (Heldt Powell, Boston Herald, 9/17). Acting Gov. Jane Swift (R) in July approved the state budget, which included a reduction in Medicaid payments to pharmacies from 10% above the wholesale price to 2% below wholesale. The pharmacy payment cuts were expected to save the state about $60 million a year. In response, CVS, Brooks Pharmacy and Walgreen -- the state's three largest drugstore chains -- announced that they would discontinue their participation in the state's Medicaid program unless the state raised the reimbursement rate. Under a temporary agreement reached in August, the state will continue to reimburse pharmacies for Medicaid prescriptions at the current rate through Oct. 2, when it will hold a hearing to establish a new rate (Kaiser Daily Health Policy Report, 9/6). Officials said the revised report will be "take[n] into consideration" at the hearing. National Association of Chain Drug Stores spokesperson Crystal Wright said, "While we think this is a step forward, we wish it could have been released earlier. It appears to me that they're admitting their original study was flawed" (Boston Herald, 9/17).