Retail pharmacy groups were quick to rebuke the Department of Health and Human Services (HHS) for approving proposed reimbursement cuts for Medi-Cal, California's Medicaid program.

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NACDS, NCPA blast California Medicaid cuts

October 28th, 2011

ALEXANDRIA, Va. – Retail pharmacy groups were quick to rebuke the Department of Health and Human Services (HHS) for approving proposed reimbursement cuts for Medi-Cal, California's Medicaid program.

The National Association of Chain Drug Stores and the National Community Pharmacists Association late Friday called the reductions "devastating" to pharmacists and other health care providers in California.

As part of the state's 2011-12 budget proposals, the California Department of Health Care Services (DHCS) on Thursday announced that HHS approved a 10% cut to Medi-Cal reimbursements for doctors, pharmacies, clinics, optometrists, therapists, laboratories, dental offices and durable medical equipment. Including a 5% reduction proposed earlier, pharmacy reimbursements under the program would shrink 15%.

NACDS and NCPA chastised the move, noting it would threaten patient access to pharmacy services and end up hiking health care costs, since health care outcomes might consequently be jeopardized.

"We are extremely disappointed with the unconscionable Medi-Cal reimbursement cuts proposed by the state and approved by HHS. If left in place, we believe that these reductions would greatly harm millions of Californians by effectively reducing their access to community pharmacies and the health care system as a whole," NACDS president and chief executive officer Steve Anderson and NCPA CEO B. Douglas Hoey said in a statement. "The impact in terms of compromised health outcomes for patients or delayed access to needed services could be significant."

Earlier this week, the California Pharmacists Association (CPhA) said the proposed reimbursement cuts to Medi-Cal have pharmacists in California at a "breaking point." CPhA reported that a recent poll by the association found that, when asked about the possibility of another 10% cut to Medicaid prescription payments, pharmacists "clearly indicated they would be forced to flee the program." In that case, 90% of pharmacies indicated they would decline new Medi-Cal prescriptions, and 43% would likely close their pharmacy, CPhA said.

"These cuts alarm community pharmacists and have long been opposed by NACDS and NCPA for three critical reasons. First, community pharmacists provide expert medication advice and promote cost-saving generic drugs. Now patient access will likely suffer as many pharmacies may be forced to cease filling prescriptions and providing counseling to these patients for fear of jeopardizing their pharmacy’s financial viability," Anderson and Hoey explained in their statement.

"Second, we believe that the Medi-Cal cuts will mean fewer jobs and local tax revenue at the worst possible time for the state’s economy. Pharmacy reimbursement by public and private health plans has already been declining for many years. These cuts could be the tipping point that forces community pharmacies to scale back operating hours, employee hours, or to close altogether," the executives stated. "Third, these short-sighted cuts could very well backfire and ultimately increase costs for California and the federal government. Pharmacy services are arguably the best value in health care. As a result of the diminished pharmacy access these cuts will trigger, patients will likely either endure greater and costlier health problems or have to turn to more expensive providers such as emergency rooms for the medication and counseling they need."

NACDS and NCPA also noted that the decision to cut Medi-Cal reimbursements came when a key legal issue of the matter had been presented to the Supreme Court.

This summer, NACDS and NCPA along with the American Pharmacists Association and 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. At issue is the right of pharmacies and other health providers to challenge state cuts to Medicaid on the rationale that they don't comply with federal requirements for "sufficient" patient access to health care.

"It is surprising and disappointing that the federal and state officials involved have acted with such disregard to the judicial system, with a related case pending before the U.S. Supreme Court," Anderson and Hoey said Friday in their joint statement. "No one should presume the outcome of the case of Douglas v. Independent Living Center of California, and the federal review of California's proposed cuts should never have been concluded while the case is active."

The two pharmacy groups added that community pharmacists can work with states to rein in health care costs by ferreting out wasteful medical expenses and boosting utilization of lower-cost generic drugs.

"As state and federal health care officials begin to realize the consequences of these actions," NACDS and NCPA stated, "it is our hope that they will go back to the drawing board to develop a more practical budget approach."

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