Inside This Issue - News
Suit aims to block Del. Medicaid cuts
June 29th, 2009
ALEXANDRIA, Va. – Two national trade associations representing community pharmacies have filed a lawsuit in federal court to stop Delaware from implementing lower Medicaid reimbursement rates next month.
The legal action by the National Association of Chain Drug Stores and the National Community Pharmacists Association seeks to halt cuts on reimbursements to pharmacies for brand name prescription drugs from going into effect when Delaware’s 2010 budget year starts on July 1.
NACDS and NCPA have asked for a preliminary injunction to prevent the reimbursement rate cuts from going into effect until a judge can consider the groups’ contention that the new reimbursement scheme violates several laws and could put patients’ well-being at risk.
The new rates, the associations say, would result in reimbursements for many drugs at a level below a pharmacy’s break-even cost.
NACDS and NCPA estimate that the cuts would result in an average reduction of $3.63 per pharmacy reimbursement for brand name prescription drugs.
That reimbursement level is lower than the average pharmacy’s break-even cost for more than 76% of all brand name prescription drugs, they contend, and would cause drug stores to lose an average of $3.84 on every prescription filled with such drugs.
The associations say Delaware officials violated the federal Social Security Act by ignoring the negative impact that the reimbursement cuts will have on patients’ access to quality care.
They also contend that by enacting the rate cut, the state failed to comply with Delaware’s Administrative Procedures Act.
Perhaps most important, the associations say the lower reimbursement rates will have a negative impact on thousands of patients.
Because the lower rates will lead to pharmacies filling prescriptions below cost, some retailers who are currently participating in the state’s Medicaid program may opt out and stop providing these medications, they point out.
“This lawsuit was filed by pharmacies, but it is truly on behalf of Delaware’s Medicaid patients, whose access to medications is threatened by these devastating cuts,” states NCPA executive vice president and chief executive officer Bruce Roberts.
“During these challenging economic times, Medicaid patients should not be on the losing end of the state’s attempt to reconcile its budget,” says NACDS president and CEO Steve Anderson. “If pharmacies are reimbursed at a loss, the patients also lose, and that loss can result in patients not receiving their medications and other health services from their neighborhood pharmacy so that they can maintain their health and that of their families.”
Representatives of the pharmacy groups say that immediately after state lawmakers voted on April 1 to include the reimbursement cuts in the state’s budget for next year, they began talking with officials from the Delaware State Department of Health and Social Services and with Gov. Jack Markell to see if a compromise acceptable to both sides could be reached.
But the organizations say those discussions stopped earlier this month, leading them to take legal action.