California, Pharmacies File Arguments in Suit Over Medi-Cal Pay Cuts
Attorneys for the California Pharmacists Association and the state Department of Health Care Services were expected to submit legal arguments on Monday in the pharmacists' case to block Medi-Cal pay cuts from taking effect, the Riverside Press-Enterprise reports.
DHCS administers Medi-Cal, California's Medicaid program (Hines, Riverside Press-Enterprise, 7/21).
On July 11, the Ninth U.S. Circuit Court of Appeals in San Francisco issued a temporary injunction barring the state from cutting payments to pharmacists, but the court revoked the injunction on Wednesday after attorneys for DHCS argued that the injunction would cost the state more than pharmacists would lose under the payment cuts.
The Legislature and Gov. Arnold Schwarzenegger (R) approved a 10% cut in Medi-Cal provider payments in February to help address the state budget deficit (California Healthline, 7/21).
Lynn Rolston, CEO of the California Pharmacists Association, said that pharmacies have no control over drug prices because Medi-Cal reimbursements are based on wholesale prices. She said that the dispensing fee pharmacists receive for each Medi-Cal prescription they fill also has been reduced to about $6.50.
Rolston said pharmacies have lost the most money on medications that do not have generic substitutes, including treatments for psychiatric conditions, HIV/AIDS and cancer.
In many cases, independent pharmacies are referring Medi-Cal beneficiaries to larger chain pharmacies or hospital pharmacies for prescriptions that independent pharmacies say they cannot afford to fill.
In a statement, DHCS spokesperson Anthony Cava said that the payment cuts are permitted under state and federal law.
Dev Gnanadev -- president elect of the California Medical Association and medical director at Arrowhead Regional Medical Center -- said he is concerned that problems Medi-Cal beneficiaries encounter filling prescriptions will prompt them to stop taking their medications, potentially leading to an increase in people seeking treatment at hospital emergency departments (Riverside Press-Enterprise, 7/21).
CMA is a plaintiff in another suit seeking to block the Medi-Cal cuts (California Healthline, 7/3).
On Monday, KPBS' "KPBS News" reported on the pharmacists' lawsuit (Goldberg, "KPBS News," KPBS, 7/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.