California pharmacies win court order to halt cut in Medi-Cal reimbursements

SACRAMENTO, Calif. The California Pharmacists Association is hailing a federal court ruling that temporarily blocks a 10-percent payment cut for prescription drugs dispensed under the Medi-Cal Program.

Pharmacy providers in California were notified late Friday that a three-judge panel of the Ninth Circuit Court of Appeals had acted to halt the ten percent payment cuts for prescription drugs dispensed under Medi-Cal, the state’s version of Medicaid. The ruling came in response to an emergency appeal in the case, Independent Living Center of Southern California, et.al. v.Shewry, that challenges a lower court ruling that the plaintiffs did not have standing to sue under the Supremacy Clause of the U.S. Constitution.

The 10-percent cut went into effect July 1. It has already caused disruptions in service to some patents enrolled in the program, said Lynn Rolston, the association’s chief executive officer. “Patients have experienced significant problems in getting lifesaving prescription medicines since the cuts went into effect on July 1, and the Court’s action will prevent additional patient harm,” Rolston said. She called the decision “a victory for pharmacy and patients alike.”

The court suspended the cuts from taking effect until at least Aug. 11, 2008, and sent the case back to the Federal District Court in Los Angeles for further consideration of the plaintiffs’ motion for a preliminary injunction. “As this case makes its way back to District Court, other legal actions are still proceeding,” noted the association in a statement. “A preliminary injunction hearing in a lawsuit filed by the California Medical Association, CPhA and other provider groups is scheduled for July 25 and will be key in putting a more permanent hold on the cuts for all providers, including pharmacy.”

The lawsuit is one of three supported by the Coalition for Community Pharmacy Action, whose members include the CPhA, the National Community Pharmacists Association and the National Association of Chain Drug Stores. Several independent pharmacies have also joined the suit.

“We are pleased that the concerns of pharmacy were heard,” said NACDS president and chief executive officer Steve Anderson. “Maintaining pharmacy access is important not only to Medi-Cal beneficiaries’ health and safety, but also to the Medicaid program’s overall ability to constrain healthcare costs, including those related to preventable emergency room visits and catastrophic care.”

Rolston added a note of caution. “The judgment is only temporary and unfortunately doesn’t apply to any other provider,” she said. Her group also warned that Electronic Data Systems, which processes prescription claims for the Medi-Cal program, “will not have a ‘fix’ in place immediately for the online electronic billing system used for prescription claims.”

For that reason, the group noted, “Pharmacies may continue to see payment information that shows below cost reimbursement and may have to re-bill claims once the fix is in place.”

At press time, it was unclear whether the State of California would appeal the court action.