California court denies attempt to stop Medi-Cal cuts

7/7/2008

SACRAMENTO, Calif. The Sacramento Superior Court has denied eight retail pharmacies’ motion to stop the 10 percent Medi-Cal provider cuts. The pharmacies had sought a temporary restraining order against the California Department of Health Care Services to block the cuts from going into effect.

The ruling, however, was based on the court's finding that the pharmacies had not demonstrated that the department had to obtain federal approval prior to implementing the cuts. The three outcomes the court did agree upon were:

  1. Only a select number of branded drugs would be reimbursed below cost.
  2. That it was speculative that the rate cuts would result in pharmacies operating at a loss.
  3. That the risk of loss of services to Medi-Cal beneficiaries overall was speculative. That is, the court determined it was speculative that the pharmacies would close, lay off workers, reduce hours and refuse to fill prescriptions.

“We are sorely disappointed with the outcome of this lawsuit,” said Lynn Rolston, chief executive officer of the California Pharmacists Association. “However, the fight is far from over. There are two other lawsuits pending in federal court and we are confident that we have a strong case to stop the ten percent provider cuts. Unfortunately, for now, the cuts will be implemented as scheduled, which could result in tragic consequences for pharmacies and the patients they serve.”

The eight pharmacies included in the case were: Farmacia Remedios, Ross Valley Pharmacy, South Sacramento Pharmacy, Horton and Converse Pharmacies, Zweber Apothecary, Komoto Pharmacy and Medical Pharmacy, Pucci’s Leader Pharmacy and Gregg’s Pharmacy.

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