Pharmacies lose Medi-Cal reimbursement appeal

June 18, 2014

The California State Supreme Court recently upheld a ruling that allows healthcare plans serving the poor to ignore what it costs pharmacies to obtain drugs when establishing Medi-Cal reimbursement rates.

The California State Supreme Court recently upheld a ruling that allows healthcare plans serving the poor to ignore what it costs pharmacies to obtain drugs when establishing Medi-Cal reimbursement rates.

Several pharmacies in Marin, Sonoma, and Solano counties challenged the reimbursement rates set by Partnership HealthPlan of California. The pharmacies complained they are losing money because the reimbursement rates, in some cases, are less than the costs of buying the drugs.

The court ruled that the law doesn’t require states to consider pharmacies’ costs when deciding reimbursement rates. It also said federal law requires rates to be sufficient to provide quality care and adequate access to medications.

In May 2013, the Ninth U.S. Circuit Court of Appeals in San Francisco ruled that state regulators did not have to consider providers' costs when setting reimbursement rates.

Pharmacy owners say the reimbursement rates are discouraging pharmacies from serving Medi-Cal patients and have forced some pharmacies out of business. Medi-Cal is California's Medicaid healthcare program.