The cost of reducing reimbursement rates

Democrats think that they can just save money by reducing the rate that doctors and hospitals are reimbursed for services. This has lead to cost shifting, where private insurance has to pick up the losses imposed on medical care providers. Now this story from Washington state.

Effective April 16, Walgreens drugstores across the state won't take any new Medicaid patients, saying that filling their prescriptions is a money-losing proposition — the latest development in an ongoing dispute over Medicaid reimbursement.

The company, which operates 121 stores in the state, will continue filling Medicaid prescriptions for current patients.

In a news release, Walgreens said its decision to not take new Medicaid patients stemmed from a "continued reduction in reimbursement" under the state's Medicaid program, which reimburses it at less than the break-even point for 95 percent of brand-name medications dispensed to Medicaid patents.

Walgreens follows Bartell Drugs, which stopped taking new Medicaid patients last month at all 57 of its stores in Washington, though it still fills Medicaid prescriptions for existing customers at all but 15 of those stores. . . .

Fred Meyer and Safeway said their pharmacies would continue to serve existing Medicaid patients and to take new ones, though both expressed concern that the reimbursement rate is too low for pharmacies to make a profit. . . .