Retail News Breaks
NACDS joins in lawsuit against Medi-Cal cuts
November 22nd, 2011
SACRAMENTO, Calif. – The National Association of Chain Drug Stores has allied with the California Pharmacists Association (CPhA), California Medical Association (CMA) and California Dental Association (CDA) to file a lawsuit against the California Department of Healthcare Services (DHCS) and the U.S. Department of Health and Human Services (HHS) over a reimbursement rate cut in Medi-Cal, California's Medicaid program.
NACDS said Tuesday that the suit, filed with the California Central Federal District Court, comes in response to a 10% reduction in Medi-Cal reimbursements to health care providers recently approved by the Centers for Medicare & Medicaid Services (CMS).
The California Legislature passed and Gov. Jerry Brown signed AB 97, which included a 10% reimbursement rate cut for doctors, dentists and pharmacists. The groups claim that the reimbursement reduction didn't follow proper legal channels. They said federal approval was required before California could implement its proposed cuts and, by law, the state must submit underlying documents to CMS showing that access to care for Medi-Cal patients wouldn't be impacted by the state plan amendments.
"In late September, the Centers for Medicare & Medicaid Services asked DHCS for more information that would substantiate its state plan amendments (SPAs) for cuts in the Medi-Cal program. Without receiving that information, CMS went ahead and approved the cuts before them," Francisco Silva, CMA general counsel and vice president, said in a statement. "It is clear that CMS did not follow protocol and applied the wrong legal standard. The approval of the SPAs will have dramatic affects on access to health care for the poorest, most vulnerable Californians."
According to the groups, many health providers can't afford to participate in Medi-Cal because its rates are already extremely low and many prescription drugs are reimbursed at break-even. They reported that data from Kaiser State Health Facts list California as the nation's lowest-reimbursed state. That ultimately could limit patient access to health care, forcing them to postpone seeking care or use emergency rooms for basic health services.
"As studies have shown repeatedly, jeopardizing patients' access to community pharmacy services diminishes health and increases the reliance on costly forms of care. These drastic cuts are not in the best interest of patient care, nor are they in the best interest of the state's finances," stated Steve Anderson, president and chief executive officer of NACDS. "Community pharmacies help to reduce direct drug spending through strategies including utilization of generic medications. They also help to make health care more affordable through health-improving services such as medication counseling, vaccinations, education and screenings. These cuts would turn the state's back on innovative and affordable approaches to patient care, and turn the state's back on patients themselves."
Late last month, NACDS and the National Community Pharmacists Association blasted HHS for approving Medi-Cal reimbursement cuts, saying the reductions would be "devastating" to pharmacists and other health care providers in California.
The groups in the suit also claim that the information used by CMS to approve California's cuts don't take into account the reimbursement reductions' potential impact on patient access to care and don't consider, as required by law, the costs to provide the care. They said a recent poll and independent studies indicates that access to care is currently unequal, making the recent cuts illegal by federal standards.
"Provider cuts may satisfy this year's state budget but will ultimately result in greater long-term costs," stated said Jon Roth, CEO of CPhA. "This case isn't about pharmacist profits' it's about pharmacists being reimbursed less than what they pay for the medication itself, not to mention any consideration for their professional services as a health care provider. Patients are the ones who are going to suffer."
Last month, CPhA said that reimbursement cut proposals, on top of earlier ones, had pharmacists in California "at their breaking point" and ready to "flee" Medi-Cal.
CDA said Tuesday this latest reimbursement cutback will further hinder dentists' ability to provide appropriate care. "The state's elimination of adult dental services in 2009 was devastating to low-income Californians. More cuts to children's services are unconscionable," commented Dan Davidson, president of the CDA. "California's vulnerable children deserve better, and we must take a stand against the state's willingness to obstruct their access to care."
In their announcement on the filing of the lawsuit, the groups noted that the California Hospital Association recently filed a suit on behalf of the Subacute Distinct Part Nursing Facilities that is due to be heard on Dec. 19 and that CMA, CPhA and CDA successfully sued in the past to enjoin prior Medi-Cal cuts.
Over the summer, NACDS, NCPA, the American Pharmacists Association and the National Alliance of State Pharmacy Associations filed a legal brief with the Supreme Court in the case of Douglas v. Independent Living Center of California. The case will examine the right of pharmacies and other health care providers to challenge state cuts to Medicaid — specifically, in Medi-Cal — on the basis that they violate federal requirements for "sufficient" patient access to health care.
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