Eight California Pharmacies File Lawsuit Against the California Department of Health Care Services to Stop the 10 Percent Medi-Cal Provider Cuts to Pharmacies

Wednesday, June 11, 2008 General News
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SACRAMENTO, Calif., June 10 Today, eight retail communitypharmacies filed a lawsuit against the California Department of Health CareServices and its director Sandra Shewry to stop the ten percent Medi-Calprovider cuts to pharmacies from going into effect on July 1, 2008. Theaction claims that the state Department of Health Care Services (DHCS) has notmet all the requirements of the statute that imposes the ten percent cuts,which was passed by the California Legislature and signed into law in February2008. DHCS must meet all of those requirements before the cuts can beimplemented. The pharmacies are filing this action because of their concernabout the drastic impact these cuts will have on California's network ofpharmacies as well as the tragic consequences to Medi-Cal patients.

California law requires DHCS to "promptly seek any necessary federalapprovals for implementation of [the 10% cut]," which in turn requiresCalifornia to file with the federal Centers for Medicare and Medicaid Services(CMS) a State Plan Amendment to implement the 10% cuts. The State Plan is acomprehensive written statement prepared by DHCS, which both describes thenature and scope of the Medi-Cal program and gives assurances that DHCS willadminister the plan properly. DHCS cannot show that they have obtained "allnecessary federal approvals" including the State Plan Amendment nor can theyshow that they have received approval to implement the cuts from CMS.

"This lawsuit was carefully drafted to include only issues of state law inorder to avoid the fate of two other provider lawsuits that have been filedwith the state only to be removed to the federal court at the request ofDHCS," said Lynn Rolston, chief executive officer of the CaliforniaPharmacists Association, which is a plaintiff in one of the provider lawsuitsand supporter of the new pharmacy action. "Moving these cases to federalcourt is nothing more than a delay tactic that will cause the cuts to go intoeffect before the providers' legal claims can be heard by a judge."

If these cuts go into effect on July 1, 2008, pharmacists may have to turnaway new Medi-Cal beneficiaries, stop serving Medi-Cal altogether or be forcedto close their doors. The impact of the cuts on access to life savingmedications for Medi-Cal beneficiaries and the impact on pharmacies inCalifornia are detailed in the report from Stephen Schondelmeyer and thedeclarations of the individual pharmacies that are part of the complaintfiling.

The hearing regarding the temporary restraining order is set for Friday,June 20 at 11:00 am in Department 29 of Sacramento Superior Court.

The pharmacies have retained Duane Morris as their legal counsel in thematter.

SOURCE California Pharmacists Association

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