State to freeze Medicaid payments

Friday, June 7, 2002 | 10:54 a.m.

CARSON CITY -- Faced with a $27 million deficit next fiscal year, Nevada's Medicaid program is freezing or reducing rates to those who provide services to the medically needy.

Medicaid Director Charles Duarte said today there will be a 5 percent reduction to pharmacists who supply drugs to Medicaid recipients. That should save $1.2 million, of which $600,000 is state money.

Duarte also said he is cutting about $1 million in payments to HMOs that contract with the state for patient care. In addition, he is freezing rate increases that were scheduled for other medical providers such as hospitals and doctors.

The Medicaid program has already exhausted a reserve fund to pay for costs this year for more than 100,000 recipients. Duarte estimates it will be $71 million in the red next fiscal year, of which $27 million comes from the state.

The deficit arises from the unexpected increase of more recipients than planned.

Duarte said the division is pursuing other cost saving measures as well.

The agency now pays pharmacists at a rate of the average wholesale price of the drug minus 10 percent, and then adds on a $4.76 handling fee for the pharmacy. Duarte said the state will now require the discount of the wholesale price to be 15 percent. But he said he will not touch the handling fee, which he described as one of the best in the nation.

Crystal Wright, vice president of media relations for the National Association of Chain Drug Stores, said 40 other states are cutting Medicaid reimbursement to pharmacies. But Nevada's is one of the most drastic reductions.