NACDS, California pharmacy groups urge CMS to block proposed state plan amendment

SACRAMENTO, Calif. — The National Association of Chain Drug Stores and California pharmacy groups have banded together to urge the Centers for Medicare and Medicaid Services to prevent the implementation of a state plan amendment — proposed by the California Department of Health Care Services — which they say would place significant limitations on access to pharmacy care and services for the state’s Medi-Cal patients.

In a letter to CMS, NACDS, the California Retailers Association and the California Pharmacists Association cited “serious” concerns about the proposed amendment, which would allow DHCS to establish and implement an unpredictable pharmacy reimbursement structure. The groups emphasized that reimbursement cuts could result in store closings, as well as reduced pharmacy hours and patient services.

“Reducing pharmacy reimbursement rates in the Medi-Cal program will inevitably harm beneficiaries’ access to drug benefits, violating federal law and very likely resulting in increased healthcare costs. We believe DHCS should abandon its short-sighted strategy of cutting provider payments and instead focus on more innovative ways of improving efficiencies in the Medi-Cal program,” the groups stated in the letter.

The letter continued, “DHCS proposes to reduce the reimbursements for some drug products by less than 10%, others more than 10%, with the ultimate goal of the overall cuts to reimbursements not exceeding 10% in the aggregate.  However, the proposed solution is flawed. While it may correct access problems with one drug or drug class, in turn, it may readily lead to reduced access to other drugs and drug classes and, ultimately, to overall reduced pharmacy access.”

NACDS, CPhA and CRA also expressed concerns about the capability of DHCS to adequately monitor access to pharmacy services to respond when access problems arise.

“Monitoring plans that DHCS has communicated to the public are limited to monitoring utilization data that is reported quarterly at best. We anticipate reduced access to occur quickly — for example, in rural areas where few providers are located or with certain specialty drugs that are not carried by many pharmacies. Delays by DHCS in responding to such access problems are unacceptable for patients with serious medical conditions,” the letter stated.

Last week, a federal judge blocked California state officials from moving forward with a 10% Medi-Cal reimbursement rate cut for pharmacies and other providers. The proposed amendment by DHCS, not related to that ruling, is yet an additional effort by the state to implement pharmacy reimbursement cuts. For that reason, pharmacy must remain vigilant in preventing harmful cuts that can impact patient access, according to the pharmacy groups.

“There is no substitute for the quality, accessible patient care provided by community pharmacy,” stated NACDS president and CEO Steve Anderson. “This proposed pharmacy reimbursement structure is not a remedy for the budget challenges in the Medi-Cal system. Community pharmacy provides unsurpassed value in improving patient health and reducing healthcare costs across the board. We urge CMS to prevent these cuts from being implemented to ensure fair and adequate access to community pharmacy.”

"The department should step away from flawed policies like this one," stated Bill Dombrowski, president and CEO of the California Retailers Association. "They only create barriers to care for millions of Californians. When they do, our coalition stands ready to work with them to put forth real cost saving measures that will score savings within the Medi-Cal program without the risk of harming patients."

“This most recent SPA is nothing more than an extension of the failed policies that have been proposed before,” added CPhA CEO Jon Roth. “We have approached the state with pharmacy benefit plan design changes that would permanently improve efficiency and reduce overall drug costs within the Medi-Cal program. Rather than saving money by encouraging the use of less expensive drugs, the state seems intent on these short-sighted plans that will force local community pharmacies out of business."