Calif. and N.Y. R.Ph.s smarting from Medicaid reimbursement cutbacks

July 3, 2008

Medi-Cal slashed reimbursement for prescription drugs in California by 10%, effective July 1.

Despite three suits that have been filed to prevent Medi-Cal from cutting reimbursement for prescription drugs in California by 10%, the decreases took effect on July 1. According to Lynn Rolston, CEO of the California Pharmacists Association, "The phone is ringing off the hook with pharmacists who are losing lots of money on every script. The stories are heartbreaking as the pharmacists love their patients and can't bear to turn them away."

Regarding the three suits, Rolston said a hearing is scheduled for one of the suits, so one case will be decided soon. The second suit will go back to federal court for a hearing shortly, while the third case will be heard on July 25. So there are still three chances this month to stop the cutbacks, she said. Meanwhile, Longs Drug Stores has issued a press release announcing that even though filling Medi-Cal prescriptions means that pharmacies are getting paid below their actual drug ingredient cost for many products, the chain will continue to serve these patients.

Across the country, New York also saw Medicaid cuts go into effect on July 1. According to Craig Burridge, executive director of the Pharmacists Society of the State of New York (PSSNY), the state could not afford to take Medicaid to court as California did because there is already litigation underway between the two parties over audits. Not only will pharmacists see a decrease in their reimbursement by 2 1/4 points, they are being asked to collect only $1, instead of $3, co-pay for preferred brand-name drugs until October 1, when the Medicaid agency can adjust its eMedNY point-of-service claims system. As a result, Burridge said pharmacies are dropping out of the Medicaid program left and right. To relieve the situation, Burridge, who is running for Congress, said PSSNY will push for legislation that calls for a higher dispensing fee.

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