Provider groups file lawsuit against DHCS, HHS over Medicaid program cuts

November 29, 2011

Pharmacy and medical groups are suing the California Department of Health Care Services and the U.S. Department of Health and Human Services over the Centers for Medicare and Medicaid Services’ recent approval of a 10% reimbursement rate cut in California’s Medicaid program.

Pharmacy and medical groups are suing the California Department of Health Care Services (DHCS) and the U.S. Department of Health and Human Services over the Centers for Medicare and Medicaid Services’ (CMS) recent approval of a 10% reimbursement rate cut in California’s Medicaid program.

In late November, the California Pharmacists Association (CPhA), the National Association of Chain Drug Stores (NACDS), the California Medical Association (CMA), and the California Dental Association filed the suit in the California Central Federal District Court.

Although the California legislature passed AB 97, which included a 10% reimbursement rate cut for physicians, dentists, and pharmacists, federal approval was required before the state is allowed to implement its proposed cuts. Meanwhile, CMS asked the DHCS for more information to substantiate its state plan amendments (SPAs) for the cuts, according to Francisco Silva, general counsel and vice president of CMA.

“Without receiving that information, CMS went ahead and approved the cuts before them. The approval of the SPAs will have dramatic affects on access to healthcare for the poorest, most vulnerable Californians,” Silva said.

Instead, the information that CMS relied on to make the cuts did not measure how patients’ access to care would be impacted and the costs to provide the care, as required by law. “This case isn’t about pharmacists’ profits; it’s about pharmacists being reimbursed less than what they pay for the medication itself, not to mention any consideration for their professional services as a healthcare provider. Patients are the ones who are going to suffer,” said Jon Roth, CPhA CEO.

For more information, visit www.cpha.com or www.nacds.org.