ARLINGTON, Va. — The National Association of Chain Drug Stores reported that Medi-Cal, California’s Medicaid program, will begin sending letters to pharmacies about recoupment of funds stemming from a reimbursement reduction that had been blocked in court and then later allowed to proceed.

NACDS said the 60-day notices on funds owed to Medi-Cal will go into effect from the date on the letter for claims dating from June 1, 2011, to Feb. 6, 2014.

In the spring of 2011, the California legislature passed and Gov. Jerry Brown signed AB 97, which included a 10% reimbursement rate cut for doctors, dentists, pharmacists and other Medi-Cal health care providers. Federal approval was required before the state could implement its proposed cuts.

However, in February 2012, NACDS and other health care stakeholders obtained an injunction from a federal court to halt the reimbursement cut. The California Department of Health Care Services (DHCS) requested to have the injunction suspended but was denied. Then in December 2012, a federal appeals court reversed the decision to suspend the 10% cutback. The court in late May 2013 denied a request for a review of that ruling, clearing the way for the reduction to be implemented.

Starting this August, California plans to retroactively reduce reimbursement for some drugs dispensed by pharmacies after June 1, 2011, NACDS said. Some medications will be exempted from the cuts, as will drugs dispensed to Medicaid managed care plans.

NACDS said its preliminary calculations found that, with the exemption of those drugs, the pharmacy reimbursement reduction is closer to 1.7%. The association noted that medicines not on the exemption list are subject to prospective and retrospective cuts, and all drugs are subject to certain months where the exemption for pharmacy didn’t apply.

Meanwhile, NACDS has aligned with a coalition of providers calling on lawmakers to quash the 10% Medi-Cal provider reimbursement rate cuts — prospectively and retroactively — for pharmacy, medical supply and durable medical equipment (DME) services. The association said efforts in the Capitol are focused on budget conferees. Earlier this month, the “We Care for California” health provider coalition held a rally at the Capitol, and NACDS and allied California stakeholders urged Budget Conference Committee members to rescind the 10% payment reduction for Medi-Cal providers.