News Releases

Pharmacy Groups Join in Support of CMS' Rejection of Below-Cost Medicaid Dispensing Fees in WA

by NCPA | Mar 18, 2019

Washington State's inaccurate justification for reimbursing pharmacies below cost—lower than any state in the country—threatens patient access to care

Washington, D.C. – The National Association of Chain Drug Stores (NACDS), the Washington State Pharmacy Association (WSPA) and the National Community Pharmacists Association (NCPA) filed an important legal brief last week in support of the Centers for Medicare & Medicaid Services' (CMS) rejection of Washington State's below-cost reimbursement of community pharmacies providing care and services to Medicaid patients, as inconsistent with federal Medicaid rules. That decision is under review at the request of Washington State.

As background, in 2016, CMS put in place a new rule changing how states must reimburse pharmacies. A key part of the rule indicates that states must reimburse pharmacies for their actual costs in dispensing drugs to Medicaid beneficiaries.

The legal brief asserts that Washington State has failed to comply with that rule, maintaining its below-cost dispensing fees. Since CMS released the rule, the "vast majority of states have adopted" cost-based dispensing fees, but Washington State has refused to do the same, maintaining the same below-cost dispensing fees—lower than any state in the country—which may impede patient access to care. Contrary to federal rules, the State argues that it does not need to "consider a pharmacy's actual costs in determining dispensing fees." To back up its decision to continue to impose insufficient dispensing fees, the State relies on a misreading of the requirements of the federal rule and inapplicable payment data from private insurance plans—which do not track actual costs, as required by the CMS rule.

The groups state in the brief that after more than three years of trying to work with Washington State, CMS should require the State to adopt cost-based dispensing fees and that such fees must be made effective April 1, 2017, according to regulation.

In June of 2018, NACDS, NCPA, and WSPA sent a letter to CMS asking the agency to "delay no longer in requiring Washington to comply with federal Medicaid reimbursement law like other states." An important brief filed in the same month with the Washington State Court of Appeals described the associations' position in great detail.

Previously, in March 2017, NACDS, WSPA, and NCPA sued the State of Washington to stop a "substantively and procedurally flawed" rule that would pay community pharmacies below the actual cost to dispense Medicaid prescriptions.


The National Association of Chain Drug Stores (NACDS) represents traditional drug stores, supermarkets and mass merchants with pharmacies. Chains operate over 40,000 pharmacies, and NACDS' over 80 chain member companies include regional chains, with a minimum of four stores, and national companies. Chains employ nearly 3 million individuals, including 157,000 pharmacists. They fill over 3 billion prescriptions yearly, and help patients use medicines correctly and safely, while offering innovative services that improve patient health and healthcare affordability. NACDS members also include more than 900 supplier partners and over 70 international members representing 21 countries. Please visit

The Washington State Pharmacy Association (WSPA) represents pharmacists, technicians, and interns practicing within community pharmacies, clinics, nursing homes and hospitals. WSPA members provide care to Medicaid patients throughout Washington's urban, rural and underserved communities. Please visit

Founded in 1898, the National Community Pharmacists Association (NCPA) is the voice for the community pharmacist, representing 22,000 pharmacies that employ 250,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America's most accessible health care providers. To learn more, go to