Compromise Ends Medicaid Pullout

Massachusetts’ three largest drugstore chains will temporarily continue to fill Medicaid prescriptions in exchange for the state’s reconsidering a planned cut in reimbursement rates.

Gov. Jane Swift announced the agreement Thursday, for now resolving a dispute with CVS, Walgreens and Brooks Pharmacy. The chains had threatened to withdraw from the state’s Medicaid program because of an 11% reduction in prescription reimbursement rates.

Altogether, the companies operate more than half of Massachusetts’ 1,014 drugstores and fill 60% of the state’s Medicaid prescriptions.

Under the agreement, Massachusetts will continue repaying pharmacies for Medicaid prescriptions at the current rate until Oct. 2. In the meantime, the state will hold a public hearing and then set an appropriate reimbursement rate.

The new rate will be announced Oct. 2 and will be applied retroactively to any prescriptions filled after Thursday, Swift said.

CVS, the state’s largest drugstore chain and the leader of the pharmacy revolt, issued a statement welcoming Swift’s action and saying it has suspended its decision to stop filling Medicaid prescriptions on Aug. 19.

Walgreens confirmed the agreement but had no further comment. A Brooks spokesman did not immediately return calls.

Starting today, the state will also require pharmacies to give 30 days’ notice before withdrawing from the state’s Medicaid program. Previously, pharmacies were not required to give any notice.

State officials decided to reduce the reimbursement rate to help keep down rising Medicaid costs.