Pharmacy groups file lawsuits over Medicaid cuts

October 1, 2009

Pharmacy groups have filed three lawsuits that argue that California, New York, and Washington have not met their legal requirements to assure Medicaid patients receive access and quality care at least equal to patients in the general public.

Pharmacy groups have filed three lawsuits that argue that California, New York, and Washington have not met their legal requirements to assure Medicaid patients receive access and quality care at least equal to patients in the general public.

The lawsuits challenge the states’ failure to take action to prevent pharmacies from being reimbursed at below cost for prescription drugs under state Medicaid programs, according to the lawsuits filed in the three states by the National Association of Chain Drug Stores (NACDS), the National Community Pharmacists Association (NCPA), state pharmacy organizations and community pharmacies.

In addition to NACDS and NCPA, the Pharmacists Society of the State of New York filed as a co-plaintiff in the lawsuit. In addition to NACDS and NCPA, the Washington State Pharmacy Association, as well as individual pharmacy companies have filed as co-plaintiffs in Washington State.

“We are deeply concerned about the health of our patients. Pharmacists are on the front lines of our health care system protecting patients by ensuring safe and appropriate medication use. Commercial healthcare payers and Medicaid programs in some states have already adjusted pharmacy reimbursement necessary to maintain patient access to the essential care provided by pharmacies,” said Jeff Rochon, Pharm.D.,Chief Executive Officer, Washington State Pharmacy Association.

The lawsuits challenge the states’ failure to take action to prevent pharmacies from being reimbursed at below cost for prescription drugs under state Medicaid programs.

In addition to violating the Social Security Act, the pharmacy organizations also maintain that states must obtain approval by the Centers for Medicare & Medicaid Services for changes to reimbursement, and that the cuts resulting from the AWP reductions were not approved as required. Also, the plaintiffs maintain that the cuts run contrary to the states’ certifications that current reimbursement is the states’ best estimate of actual acquisition cost, as required by federal law. The plaintiffs also raised some state-specific claims.

“Pharmacies provide vital medications and services to Medicaid patients that improve and save lives, and help prevent higher long-term healthcare costs. Some private payers and some states already have taken action to adjust reimbursements appropriately, to maintain the quality and accessibility of pharmacy patient care and its benefits. Federal Medicaid law obligates the states, including California, New York and Washington, to do the same,” said NACDS President and Chief Executive Officer Steven C. Anderson, IOM, CAE.