Proposed reimbursement cuts in Medi-Cal, California's Medicaid program, continue to draw fire from pharmacy organizations and other groups.


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Groups blast Medi-Cal Rx reimbursement plan

February 13th, 2012

SACRAMENTO, Calif. – Proposed reimbursement cuts in Medi-Cal, California's Medicaid program, continue to draw fire from pharmacy organizations and other groups.

The National Association of Chain Drug Stores has joined with the California Pharmacists Association (CPhA) and the California Retailers Association (CRA) in a letter to the Centers for Medicare & Medicaid Services (CMS) that urges the agency prevent the implementation of a state plan amendment (SPA) that would allow the California Department of Health Care Services (DHCS) to set up what they called "an unpredictable pharmacy reimbursement structure."

In the letter, NACDS, CPhA and CRA cited "serious" concerns that the reimbursement cutbacks could lead to store closings plus reduced pharmacy hours and services for Medi-Cal patients.

"Reducing pharmacy reimbursement rates in the Medi-Cal program will inevitably harm beneficiaries' access to drug benefits, violating federal law and very likely resulting in increased health care costs," the groups stated in the letter. "We believe DHCS should abandon its short-sighted strategy of cutting provider payments and instead focus on more innovative ways of improving efficiencies in the Medi-Cal program."

The groups noted that "DHCS proposes to reduce the reimbursements for some drug products by less than 10%, others more than 10%, with the ultimate goal of the overall cuts to reimbursements not exceeding 10% in the aggregate. However, the proposed solution is flawed. While it may correct access problems with one drug or drug class, in turn it may readily lead to reduced access to other drugs and drug classes and, ultimately, to overall reduced pharmacy access."

What's more, NACDS, CPhA and CRA questioned the capability of DHCS to sufficiently monitor access to pharmacy services to respond when access problems arise.

"Monitoring plans that DHCS has communicated to the public are limited to monitoring utilization data that is reported quarterly at best. We anticipate reduced access to occur quickly — for example, in rural areas where few providers are located or with certain specialty drugs that are not carried by many pharmacies," the groups said. "Delays by DHCS in responding to such access problems are unacceptable for patients with serious medical conditions."

Earlier this month, a federal judge blocked California state officials from proceeding with a 10% Medi-Cal reimbursement rate cut for pharmacies and other providers. NACDS, CPhA and CRA pointed out that the proposed amendment by DHCS — not related to that court ruling — marks another move by California to reduce pharmacy reimbursement.

"This proposed pharmacy reimbursement structure is not a remedy for the budget challenges in the Medi-Cal system," NACDS president and chief executive officer Steve Anderson said in a statement. "Community pharmacy provides unsurpassed value in improving patient health and reducing health care costs across the board. We urge CMS to prevent these cuts from being implemented to ensure fair and adequate access to community pharmacy."

The latest SPA by California represents "nothing more than an extension of the failed policies that have been proposed before," according to CPhA CEO Jon Roth. "We have approached the state with pharmacy benefit plan design changes that would permanently improve efficiency and reduce overall drug costs within the Medi-Cal program. Rather than saving money by encouraging the use of less expensive drugs, the state seems intent on these short-sighted plans that will force local community pharmacies out of business."

DHCS "should step away from flawed policies like this one" commented CRA president and CEO Bill Dombrowski. "They only create barriers to care for millions of Californians. When they do, our coalition stands ready to work with them to put forth real cost saving measures that will score savings within the Medi-Cal program without the risk of harming patients."

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