Retail News Breaks
Coalition forms to thwart Calif. Rx reimbursement cut
July 12th, 2011
SACRAMENTO, Calif. – A coalition of pharmacists, businesses and consumers is urging the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) to reject California's state plan amendment that would reduce reimbursement rates for Medi-Cal, the state's Medicaid program, by 10%.
Dubbed Pharmacy Choice and Access Now (PCAN), the newly formed coalition said the state plan amendment, a result of California's March 2011 budget, would lead to a significant reduction in health care access.
Medi-Cal payment rates are 20% lower than the national average Medicaid rates, and California ranks 47th out of 50 in provider payment rates, PCAN reported, citing figures from the California Academy of Family Physicians.
"We urge the federal government to block the state's request that would threaten health care access to millions of Californians on Medi-Cal," coalition member Paul Rohrer, president and chief executive officer of the Professional Pharmacy Alliance of California (PPAC), said in a statement. "If the state action is granted, both rural and urban underserved communities across California will be adversely impacted as independent pharmacists are often the only access these Medi-Cal patients have to the medications they need, and it will become too costly for many pharmacies to remain open."
Another PCAN coalition member, Bill Dombrowski, president and chief executive officer of the California Retailers Association (CRA), also warned of the impact that the proposed cutback would have on Medicaid patients. "The California Retailers Association is urging the federal government to reject the proposed Medi-Cal state plan amendment as it will severely restrict beneficiaries' access to important health care services," he stated.
If granted by HHS and CMS, California's request under its state plan amendment would make already low reimbursement payments even lower, according to Rohrer.
"The cuts to pharmacies will reduce reimbursement rates for the dispensing of medications, in some instances, below their actual cost of service," he noted. "If pharmacies cannot recover fair compensation for drug acquisition and servicing costs, we will likely see a severe reduction in the number of pharmacies that participate in Medi-Cal and employ thousands of Californians."
Courts have previously blocked similar proposed reimbursement cuts, PCAN said, citing a 2008 decision by the U.S. District Court for the Central District of California in which it ruled that patients would be "irreparably harmed" if the cuts were not rejected. And this autumn, PCAN added, the U.S. Supreme Court will hear this case and consider whether Medi-Cal beneficiaries and providers have legal standing to bring a lawsuit enforcing the Federal Medicaid Act and declare that a provision of the federal law preempts state laws that lower reimbursement rates.
"We are deeply concerned by the state's decision," CRA's Dombrowski stated, "as we believe that a better solution is to work with the provider community to develop alternate cost-saving proposals that will maintain health care access."
Last week, the CRA and the National Association of Chain Drug Stores sent a letter to CMS calling on the agency to deny the proposed state plan amendment for Medi-Cal because of the impact that the reimbursement cuts would have on patients and community pharmacies. NACDS also noted that California has previously proposed to scale back Medicaid reimbursements.
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