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Ninth Circuit Court of Appeals hears Medi-Cal reimbursement rate cut case


SACRAMENTO, Calif. — A coalition — which includes the California Medical Association, the California Dental Association, California Pharmacists Association, National Association of Chain Drug Stores, California Association of Medical Product Suppliers, AIDS Healthcare Foundation and American Medical Response — continues to work to block the state of California from cutting Medi-Cal reimbursement rates by 10%.

“In January of this year, a federal court issued the decision to block California state officials from moving forward with a 10% cut to Medi-Cal payments,” stated James Hay, CMA president. “Judge Snyder’s ruling clearly indicated that California’s fiscal crisis does not outweigh the serious irreparable injury plaintiffs would suffer absent the issuance of an injunction.”


In spring of 2011, the California legislature passed, and Gov. Jerry Brown signed AB 97, which included a 10% reimbursement rate cut for physicians, dentists, pharmacists and other Medi-Cal providers. Federal approval was required before the state could implement its proposed cuts.


Following the court’s ruling earlier this year, the state appealed Judge Christina Snyder’s decision, and the case was heard this week by the U.S. Ninth Circuit Court of Appeals.


"We urge the court to rule in favor of preserving patient access to pharmacy care," stated NACDS president and CEO Steve Anderson. "Many patients rely on services provided by community pharmacy, such as flu shots, medication counseling and health screenings. If implemented, the Medi-Cal cuts could compromise patient health and access to some of these pharmacy services, which would also drive up healthcare costs. Compromised care is not something patients should have to face when it comes to their health."


The plaintiffs in CMA et al. v. Douglas et al. stand by previous arguments that reducing payments in the Medi-Cal system will hugely impact access to care for patients who need it most.


“CDA has serious concerns about the state’s attempt to cut reimbursement rates, which would negatively impact patients and their ability to access care,” stated CDA president Dan Davidson. “Most adult Denti-Cal services have been eliminated, and the state’s effort to make further cuts to children’s services would be devastating to their oral health.”


Because California Medi-Cal rates are already extremely low and many prescription medications are reimbursed at breakeven rates, many providers cannot afford to participate. Kaiser State Health Facts lists California as the lowest reimbursed state in the nation.


“We expect the appeal to be met with the same verdict Judge Snyder handed down in January, which is to block the Medi-Cal reimbursement cuts,” stated Jon Roth, CPhA CEO. “It’s very clear that if the state moves forward with Medi-Cal payment cuts, access to care for patients is sure to worsen. Many pharmacists throughout the state will have no choice but to turn away new Medi-Cal patients or be forced to stop accepting Medi-Cal all together, which will end up sending California’s poorest, most vulnerable citizens to the hospital or emergency room for care. In the end, California will lose far more many than the projected savings from the cuts.”

The lawsuit was filed against the California Department of Health Care Services and the U.S. Department of Health and Human Services on Nov. 21, 2011.


“Once again, California bureaucrats continue to try to balance the state budget on the backs of some of the poorest and most vulnerable Californians,” added Tom Myers, chief of Public Affairs and General Counsel for AIDS Healthcare Foundation. “This is bad medicine and bad public policy, and we hope that the Ninth Circuit Court of Appeals finds likewise and upholds the federal court ruling from earlier this year blocking the proposed cuts."


“This lawsuit is about patient safety and not profits. EMS is the safety net for these vulnerable patients, and the state’s drastically low reimbursement for emergency ambulance services has resulted in layoffs of EMTs and paramedics, extended response times to medical emergencies and even delayed the implementation of new life-saving equipment and procedures,” added AMR's Region CEO Tom Wagner.


CMA, CPhA and CDA successfully sued in the past to enjoin prior Medi-Cal cuts and expect to once again demonstrate that federal law, which ensures that Medi-Cal patients have equal access to health care, was not followed.


A ruling on the hearing is expected later this year or in early 2013.

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