Rite Aid Threatens to Drop Out of Medicaid Program

Rite Aid Threatens to Drop Out of Medicaid Program

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SALT LAKE CITY (AP) -- Rite Aid Pharmacy, one of Utah's largest drugstore chains, is threatening to stop filling prescriptions for Medicaid customers because of the state's cuts in its pharmacy reimbursement rates.

Rite Aid said Monday that it is considering dropping out of Utah Medicaid, the government health program for low-income residents.

In full-page newspaper ads and printed notices handed out to customers, Rite Aid said that the rate reductions mean many prescriptions are being filled below cost, "and your local drugstore may no longer be able to fill Medicaid prescriptions."

The state Department of Health issued a statement Monday saying the rate cut, effective Jan. 1, is the result of an unexpected increase in the number of Medicaid applicants and because of dwindling budget appropriations.

"The reductions the department is making are only the latest in a long series of rollbacks taken over the past 18 months," said Michael Deily, director of the state's division of Health Care Financing.

"While the reduction in reimbursement to pharmacies is clearly significant, the reduced Medicaid reimbursement will still be competitive with, and in some cases higher, than that of other large payers in Utah," Deily said.

The rate cut was announced in mid-December. Deily's office said it would need to reduce $5.2 million worth of Medicaid services to cover an unexpected jump in applications and to keep the program running in the black for the current budget year.

Rite Aid has 27 stores in Utah.

It is unknown how many of the 250,000 Medicaid beneficiaries in Utah might be affected if Rite Aid carries out its threat.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

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