Walgreens to cease Medicaid reimbursements at 64 Washington state pharmacies

DEERFIELD, Ill. Walgreens plans to withdraw 64 of its stores from Washington state’s Medicaid program in response to a continued reduction in reimbursements, reducing its total Medicaid business in the state by 75%, the retail pharmacy chain announced Thursday.

The most recent payment reduction results from a court ruling last fall in Massachusetts that reduced the industry pricing standard despite pharmacies’ acquisition costs having not changed. Many private health insurers have adjusted pharmacy reimbursement rates to limit the effects of the court ruling, but Washington’s Medicaid program has not, resulting in reimbursements that don’t meet the levels needed for the company to break even.

“Walgreens is committed to providing cost-effective pharmacy services across the state,” Walgreens SVP pharmacy Kermit Crawford said in a statement. “We have thousands of loyal patients who appreciate and trust our pharmacists, and we are absolutely committed to patient care. That’s why we have worked, and are committed tow working, diligently with the state on ways to lower its spending on prescription drugs while ensuring patients have access to the full benefit of their drug therapy.”

The retail pharmacy chain said that if pharmacies are forced out of the Medicaid program due to payment reductions, other healthcare costs are likely to increase.

“Now is the time, with the legislature back in session, to fix the state’s pharmacy reimbursement rates,” Crawford said. “We look forward to working with elected officials over the course of the next several weeks to address this important issue.”

Walgreens isn't the only drug store chain involved cutting Medicaid reimbursements in Washington state. Last week, regional pharmacy chain Bartell Drugs announced that it will stop filling Medicaid prescriptions at 15 of its 57 stores, citing recent reductions in compensation from the state to pharmacies filling DSHS/Medicaid prescriptions. The move is effective Feb. 1, 2010. Of those stores that will stop filling Medicaid prescriptions, 12 are located in King County and three are in Snohomish County.