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3 Chains Drop Out of Mass. Medicaid

July 31, 2002

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BOSTON (AP) _ Three major drugstore chains say they are withdrawing from Massachusetts’ Medicaid program, meaning poor and disabled people could soon be shut out of more than half of the state’s pharmacies.

CVS, Walgreens and Brooks Pharmacy cited state budget cuts signed into law Monday that reduce reimbursement rates for Medicaid prescriptions by 11 percent.

The companies said they have not decided exactly when they will stop filling Medicaid prescriptions.

But on Wednesday, Walgreens joined CVS in rejecting the state’s request that the chains stay in the program for 60 days while the state considers reversing the cuts. Brooks did not immediately respond to the request for a delay.

Altogether, the three chains operate 555 of the state’s 1,014 drugstores and provide 60 percent of the prescriptions to Massachusetts’ 900,000 Medicaid recipients.

With the state budget saddled with a $2.4 billion decline in revenue, legislators cut the reimbursement rate to save $60 million. Acting Gov. Jane Swift signed the budget Monday.

``This rate ... puts Massachusetts dead last in reimbursement among the Medicaid programs we participate in,″ Walgreens spokesman Michael Polzin said. ``We are developing a timeline to withdraw. If the rate is restored in the meantime, we’ll reconsider it.″

CVS, the state’s largest pharmacy chain with 300 stores, announced last week that it would withdraw from the program unless Swift vetoed the reductions. Brooks, which operates 165 stores in the state, and Walgreens, which operates 90, announced Tuesday that they planned to withdraw.

While states across the country have tried to save money by reducing the Medicaid pharmacy reimbursement rate, this is the first time the cuts have prompted large chains to withdraw from the program, according to the National Association of Chain Drug Stores.

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