N.Y. Medicaid plan under fire. (New York state) (RX Government)

ALBANY, N.Y.--A number of pharmacies across the state closed their doors, or refused to fill Medicaid prescriptions, for one day last month in protest of the state's plan to cut Medicaid payments sharply.

Those pharmacists were rebelling against the budget agreement passed by the state legislature on April 1, which slashed Medicaid payments by $1.1 billion.

Currently, pharmacists are reimbursed for most prescription drugs under Medicaid based on the average wholesale price. They also receive a $2.60 dispensing fee for each Medicaid prescription they fill.

The new plan represents a compromise from an earlier proposal, which called for reimbursement of 10% less than the average wholesale price and a dispensing fee of $2.60. The state backed down from that plan, however, after pharmacists threatened to withdraw from Medicaid.

As the new plan stands, pharmacists will be reimbursed by the state at the average wholesale price minus 8%; the dispensing fee will rise to $3 a prescription in October 1992 and to $3.60 in January 1993.

The state says that the cuts are necessary because of a budget deficit and because federal regulations are calling for individual states to bring reimbursement more into line with what drugs cost pharmacists.

Pharmacists are upset by the state's plan, saying it will cause them to lose money or significantly cut into their profits on filing Medicaid prescriptions.