The backlash over Medicaid prescription reimbursement cuts has intensified in California and Texas.


Medicaid prescription reimbursement cuts, Medicaid, prescription reimbursement, California, Texas, National Association of Chain Drug Stores, NACDS, pharmacists, Medi-Cal, Medicaid managed care, Centers for Medicare and Medicaid Services, CMS, Medi-Cal patients, Jerry Brown, California Department of Healthcare Services, Francisco Silva, California Medical Association, Steve Anderson, community pharmacy, pharmacy services, California Dental Association, California Pharmacists Association, CPhA, Jon Roth, reimbursement rates, Texas Pharmacy Association, Dorinda Martin, Lamar Plaza Drug Store, Dripping Springs Pharmacy, Geoff Walden












































































































































































































































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Rx groups contest Medicaid cuts

December 12th, 2011

NEW YORK – The backlash over Medicaid prescription reimbursement cuts has intensified in California and Texas.

In California the National Association of Chain Drug Stores has joined with groups representing pharmacists, doctors and dentists to sue the state over a 10% reimbursement rate cut in its Medicaid program, known as Medi-Cal.

In Texas an outcry has erupted over that state’s implementation of a Medicaid managed care model that could cut pharmacy reimbursements up to 80%.

The California legislature passed and Gov. Jerry Brown signed a bill that included the rate cut for pharmacists, physicians and dentists. Federal approval was required before the state could implement the reduction. By law, the state is required to submit documents to the Centers for Medicare and Medicaid Services (CMS) showing that access to care for Medi-Cal patients would not be impacted by such a change.

In late September CMS asked the California Department of Healthcare Services (DHCS) for more information to substantiate the need for the cut. “Without receiving that information, CMS went ahead and approved the cuts before them,” said Francisco Silva, general counsel and vice president for the California Medical Association (CMA), one of the plaintiffs.

“It is clear that CMS did not follow protocol and applied the wrong legal standard,” he said, adding that approval of the cut “will have dramatic effects on access to health care for the poorest, most vulnerable ­Californians.”

NACDS president and chief executive officer Steve Anderson commented, “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.

“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.”

The California Dental Association (CDA) says this latest blow for what is an already inadequate Medi-Cal network 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,” said CDA president Dan Davidson. “More cuts to children’s services are unconscionable. California’s vulnerable children deserve better, and we must take a stand against the state’s willingness to obstruct their access to care.”

The information that CMS relied on to approve the cuts does not measure if and how patient access to care would be impacted or otherwise take into consideration, as required by law, the cost of care, according to the plaintiffs. A recent poll and independent studies show that access to care is already unequal, making the recent cut illegal by federal standards, they say.

“Provider cuts may satisfy this year’s state budget but will ultimately result in greater long-term costs,” said California Pharmacists Association (CPhA) CEO Jon Roth. “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.”

Because Medi-Cal rates are already extremely low and many prescription medications are reimbursed at break-even levels, many providers already cannot afford to participate in the program. Kaiser State Health Facts lists California as the lowest reimbursed state in the nation.

The co-payments and arbitrary limits on services will create additional barriers for sick, vulnerable patients seeking care and, ultimately, they will be forced to delay care or use emergency rooms for basic health services, the plaintiffs say.

CMA, CPhA and CDA successfully sued in the past to stop other Medi-Cal cuts and expect again to demonstrate that federal law, which ensures that Medi-Cal patients have equal access to health care, was not followed.

In Texas pharmacy owners traveled from across the state to testify before the legislature that a steep reduction in reimbursement rates will result in pharmacy closures and lost jobs, restricting access to vital medications for Medicaid patients and other Texans.

The testimony “shows firsthand the terrible impact that the move would have on Medicaid beneficiaries, pharmacies and all Texans,” said Texas Pharmacy Association president Dorinda Martin, owner of Lamar Plaza Drug Store in Austin and Dripping Springs Pharmacy.

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