California court halts prescription cuts under Medi-Cal

California's pharmacies won a court order last Friday to halt the proposed 10 percent payment cuts for prescription drugs dispensed under the Medi-Cal program.

The action was made in response to an emergency appeal in the case Independent Living Center of Southern California, et al v. Shewry, to challenge a lower court ruling that the plaintiffs did not have standing to sue under the supremacy clause of the U.S. Constitution.

The Ninth Circuit panel reversed the ruling, issued an order to stop the 10 percent Medi-Cal cuts for prescription drugs until at least Aug. 11, 2008, and sent the case back to the Federal District Court in Los Angeles for further consideration of the plaintiffs' motion for a preliminary injunction.

The lawsuit is one of three supported by a coalition of pharmacy interests, including the California Pharmacists Association (CPhA), the National Community Pharmacists Associations and the National Association of Chain Drug Stores. Several independent community pharmacies have also contributed to the lawsuit.

As the case makes its way back to District Court, other legal actions are still proceeding. A preliminary injunction hearing in a lawsuit filed by the California Medical Association, CPhA and other provider groups is scheduled for July 25 and will be key in putting a more permanent hold on the cuts for all providers, including pharmacies.

"The California Pharmacists Association, which represents pharmacists in the state of California, applauds the Court of Appeals for making this crucial decision," said Lynn Rolston, chief executive officer of the California Pharmacists Association. "This is a victory for pharmacy and patients alike. Patients have experienced significant problems in getting lifesaving prescription medicines since the cuts went into effect on July 1 and the court's action will prevent additional patient harm."

"The judgment is only temporary and unfortunately doesn't apply to any other provider," continued Rolston.

It is not known if the state will appeal the action by the Court of Appeals.

It is expected that Electronic Data Systems, which processes prescription claims for the Medi-Cal program, will not have a fix in place immediately for the on-line electronic billing system used for prescription claims. Pharmacies may continue to see payment information that shows below-cost reimbursement and may have to re-bill claims once the fix is in place.

"We are pleased that the concerns of pharmacy were heard," said Steve Anderson, president and CEO of the National Association of Chain Drug Stores, whose organization is a member of the Coalition for Community Pharmacy Action. "Maintaining pharmacy access is important not only to Medi-Cal beneficiaries' health and safety, but also to the Medicaid program's overall ability to constrain healthcare costs, including those related to preventable emergency room visits and catastrophic care."