California Officials Fight Delay for Medi-Cal Pharmacy Cuts
Officials for the California Department of Health Care Services said they asked a federal appeals court to suspend its ruling to bar the state from cutting Medi-Cal reimbursement rates to pharmacies while a lawsuit proceeds, the San Francisco Chronicle reports. Medi-Cal is California's Medicaid program (Egelko, San Francisco Chronicle, 7/17).
The Legislature and Gov. Arnold Schwarzenegger (R) approved a 10% cut in Medi-Cal provider payments in February, but last week, a three-judge panel of the Ninth U.S. Circuit Court of Appeals in San Francisco ruled that the state could not drop the reimbursement rate until at least August 11.
The delay is intended to allow time for a lower court to hear a complaint seeking to block the cut from taking effect at all.
The pay cut was scheduled to take effect on July 1 (California Healthline, 7/15).
In its ruling last week, the appeals court stated that plaintiffs had shown that the pay cut would reduce Medi-Cal reimbursements to a level that would not cover pharmacists' costs for stocking and dispensing nearly half of drugs they provide, raising concerns that pharmacists would stop participating in Medi-Cal.
Lynn Carman, an attorney for plaintiffs in the case, said federal law requires state Medicaid rates to be high enough to ensure that beneficiaries have the same access to care as the general population.
DHCS officials asked the court to suspend the payment freeze while state attorneys prepare an appeal and argued that the rate cuts do not violate federal law.
In addition, DHCS officials said that it would cost the state $12 million per month to continue using the higher reimbursement rates, exacerbating the state budget deficit.
Department personnel also maintain that it will take three weeks to reprogram computers to pay pharmacies at the higher reimbursement rate, but Carman says that in the past, the state has been able to comply with similar orders immediately (San Francisco Chronicle, 7/17).