Drug store and pharmacy groups sue over Medicaid reimbursement

Dover, Del. Officials for the state of Delaware said Thursday they will not be intimidated by a federal lawsuit challenging a reduction in Medicaid reimbursements to Delaware pharmacies.

The lawsuit was filed this week in federal district court in Wilmington, Del., by the National Association of Chain Drug Stores and the National Community Pharmacists Association.

The two trade groups are seeking a preliminary injunction to halt the 2% reduction, which took effect April 1.

The lawsuit was filed just days after Walgreen Co. said its 66 stores serving Delaware patients would drop out of the Medicaid program because of the state's decision to increase the discount applied to the average wholesale price for prescription drugs from 14% to 16%.

Delaware Gov. Jack Markell said the lawsuit would not intimidate his administration into paying Walgreens higher reimbursement rates.

"If these are negotiating tactics, they are not good ones," Markell said in a prepared statement. "We are always open to conversation, but we will not be bullied, especially when we are asking so many individuals and organizations in Delaware to share in the sacrifices necessary to close an $800 million budget gap."

The lawsuit names Markell and state health and social services secretary Rita Landgraf as defendants, along with the Department of Health and Social Services.

In their complaint, the trade groups claim the reimbursement reduction violates both state and federal law in that it will reduce the quality of care for Medicaid patients and fails to comply with the care and access requirements of the Social Security Act.

The plaintiffs also claim state officials failed to get approval from federal Medicaid officials before implementing the change, and violated their own administrative procedures.