Today, a state court denied eight retail pharmacies’
motion to stop the ten percent Medi-Cal provider cuts. The pharmacies
sought a temporary restraining order (TRO) from Sacramento Superior
Court against the California Department of Health Care Services and its
director Sandra Shewry to block the cuts from being implemented. The
court sided with the Department of Health Care Services (DHCS) finding
that the pharmacies had not demonstrated that DHCS had to obtain federal
approval prior to implementing the cuts. The court also found that the
risk of harm presented by the pharmacies was speculative. Specifically,
the court found that:
1.) Only a select number of branded drugs would be reimbursed below cost;
2.) That it was speculative that the rate cuts would result in
pharmacies operating at a loss; and
3.) That the risk of loss of services to Medi-Cal beneficiaries overall
was speculative. That is, the court determined it was speculative that
the pharmacies would close, lay off workers, reduce hours and refuse to
fill prescriptions.
“We are sorely disappointed with the outcome
of this lawsuit,” said Lynn Rolston, chief
executive officer of the California Pharmacists Association. “However,
the fight is far from over. There are two other lawsuits pending in
federal court and we are confident that we have a strong case to stop
the ten percent provider cuts. Unfortunately, for now, the cuts will be
implemented as scheduled, which could result in tragic consequences for
pharmacies and the patients they serve.”
A recent report showed that if the ten percent Medi-Cal provider cuts
are implemented, pharmacies will be faced with tough decisions including
turning away new Medi-Cal beneficiaries, dropping Medi-Cal altogether or
going out of business. Smaller and rural pharmacies will be hardest hit,
forcing other pharmacies to pick up a larger portion of the Medi-Cal
population, which they may not be prepared to do. As part of the domino
effect, these other pharmacies will feel the strain and might cope with
reduced revenue in other ways, such as cutting staff and hours, which
would mean longer lines and slower service for everyone.
The eight pharmacies, including Farmacia Remedios, Inc., Ross Valley
Pharmacy, South Sacramento Pharmacy, Horton and Converse Pharmacies,
Zweber Apothecary, Komoto Pharmacy and Medical Pharmacy, Pucci’s
Leader Pharmacy and Gregg’s Pharmacy vowed to
continue the fight to seek a preliminary and permanent injunction
against the ten percent Medi-Cal provider cuts.
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