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Pharmacies reach 'breaking point' with Medi-Cal
October 25th, 2011
SACRAMENTO, Calif. – Proposed reimbursement cuts have pharmacists in California ready to "flee" Medi-Cal, the state's Medicaid program, according to the California Pharmacists Association (CPhA).
CPhA said Monday that it has sent a letter to Donald Berwick, administrator for the Centers for Medicare & Medicaid Services (CMS), that explains why planned cuts by the California Department of Health Services (DHCS) Medicaid program violate federal law and would compel pharmacists to exit the program.
The association noted that in 2009 and this year, DHCS submitted requests to CMS to cut reimbursements for pharmacists, doctors, hospitals and dentists. For pharmacists, Medi-Cal prescription payments — which CPhA said are already at the break-even point for most pharmacies — would be slashed by 15%. The requests are currently pending with CMS.
"A recent CPhA survey makes it clear that pharmacies are at their breaking point and will have no choice but to leave the Medi-Cal program," CPhA chief executive officer Jon Roth said in a statement.
"When presented with the facts that Medi-Cal would no longer cover the cost of the drug and pharmacist's services, seven in 10 (72%) [pharmacies] would decline to fill Medi-Cal prescriptions, which is contrary to their longstanding record of service to these patients," Roth stated.
CPhA said the survey asked pharmacies what they will do if the pharmacy reimbursement cuts are approved. The findings support data presented to DHCS in 2009 indicating that even the 5% reduction being considered at that time would result in 99% of the most-used drugs in Medi-Cal being reimbursed below the pharmacy's actual cost.
When asked about the possibility of another 10% cut to Medicaid prescription payements, pharmacists "clearly indicated they would be forced to flee the program," CPhA said. In that scenario, 90% of pharmacies reported that they would decline new Medi-Cal prescriptions, and 43% would likely close their pharmacy.
CPhA pointed out that the proposed cuts also violate federal regulations requiring patient access to care, known as Section 30A.
"Provider cuts to pharmacy services may satisfy this year's state budget, but the result will be an overall increase in costs as patients seek care from hospital emergency departments," Roth explained. "Over the long term, these cuts will lead to higher chronic disease rates and utilization of more expensive health care services, resulting in much greater state financial resources."
The pharmacy industry has brought the battle against the California Medicaid payment cuts to the Supreme Court and Capitol Hill.
In August, the National Association of Chain Drug Stores, National Community Pharmacists Association, 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 care providers to challenge state cuts to Medicaid on the basis that they don't comply with federal requirements for "sufficient" patient access to health care.
Also in August, a coalition called the Alliance for Patient Care (APC) went to Washington to urge lawmakers and CMS to reject planned reductions to Medi-Cal. APC members — including the CPhA, NACDS and the California Medical Association — met with congressional leaders, Berwick and CMS' Cindy Mann, director of the center for Medicaid and state operations.
Another coalition of pharmacists, businesses and consumers, dubbed Pharmacy Choice and Access Now (PCAN), in July called on the Department of Health and Human Services (HHS) and CMS to reject California's state plan amendment to reduce Medi-Cal reimbursement rates for Medi-Cal. PCAN said the amendment, a result of California's March 2011 budget, would lead to a significant reduction in health care access. And just days earlier, NACDS and the California Retailers Association submitted a letter to CMS urging the agency to deny California's state plan amendment to lower Medicaid reimbursements to pharmacies and other health providers.