Louisiana used an improper reimbursement formula to pay pharmacists for the last two years through the state’s Medicaid program, the federal Medicaid agency informed state officials this week. As The Associated Press reports, if the U.S. Centers for Medicare and Medicaid Services decides it wants Louisiana to reimburse the payments, the state could be on the hook for up to $25 million in repayments.
But Calder Lynch, chief of staff for the state Department of Health and Hospitals, says the department hasn’t heard if the state will be asked to repay anything; he added that the department is appealing the disapproval.
Any possible budget impact, if there is one, wouldn’t be felt for years, because appeals tend to take a long time before a final decision is made. Lynch says appeals of these types of Medicaid disapprovals on average take five years or more. At issue was a reimbursement formula Louisiana enacted in late 2012. In a letter received by the state health department this week, federal officials rejected drug mark-ups the state negotiated with pharmacists that serve Medicaid patients. The Centers for Medicare and Medicaid Services claim the mark-ups didn’t comply with federal requirements.
Lynch says the mark-ups were designed to keep pharmacists in the Medicaid program, after concerns were raised that reimbursement changes enacted by the state health department had cut payments to pharmacies too steeply.
“We felt it was necessary to implement the changes to preserve access,” he says.
Even with the drug mark-ups, the state still saved more than $60 million with the formula revisions made two years ago, Lynch says.
