State Supreme Court Rejects Pharmacy Medi-Cal Rate Appeal
On Wednesday, the California Supreme Court rejected pharmacies' appeal of a ruling that managed health care plans in the state do not have to consider how much pharmacies pay to obtain prescription drugs when setting their reimbursement rates for Medi-Cal, San Francisco Chronicle reports.
Medi-Cal is California's Medicaid program (Egelko, San Francisco Chronicle, 6/11).
Federal law requires plans to set rates high enough to provide "quality care" and "adequate ... access" for prescription medications.
A 1997 ruling by the Ninth U.S. Circuit Court of Appeals in San Francisco ordered states to consider health care providers' costs when setting Medi-Cal reimbursement rates. However, the First District Court of Appeal of California in May 2013 overturned that ruling, saying regulators can guarantee access and care quality in various ways and do not have to take into account providers' costs.
In response, pharmacies in several northern California counties challenged the Medi-Cal rates set by their managed care network, Partnership HealthPlan of California.
The pharmacies said Partnership's Medi-Cal reimbursement rates were less than the cost of acquiring the prescription medications and caused the pharmacies to lose money. An attorney for the pharmacies said the low rates discourage pharmacies from serving Medi-Cal beneficiaries and has caused two pharmacies to go out of business.
However, the First District Court of Appeals in a 3-0 ruling said that managed health care plans in the state do not have to consider how much pharmacies pay to obtain prescription drugs when setting their reimbursement rates for Medi-Cal (California Healthline, 3/5).
California Supreme Court Ruling
Owners of California pharmacies appealed the ruling to the state Supreme Court, arguing that the process for setting Medi-Cal reimbursement rates in the state has driven some pharmacies to go out of business and would discourage others from serving Medi-Cal beneficiaries.
However, the state's high court unanimously denied review of the case. The court's ruling means the appellate court's decision will stand and serve as a binding precedent for trial courts in the state, the Chronicle reports (San Francisco Chronicle, 6/11).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.