Court puts halt on Medi-Cal prescription cuts

On July 1, California health care providers all saw their Medi-Cal reimbursement rates cut by 10 percent, despite the fact that California already ranks near the bottom of the nation in Medi-Cal reimbursement rates.

As a result of the cuts, many health care providers are being forced to end their participation in the under-funded Medi-Cal program or even stop providing services altogether.

"These cuts have definitely had a negative impact on my business and the service I provide to many of my customers," said Bill McFadden, owner/operator of Clark's Pharmacy, in Corning. "There are some prescriptions that if I fill them I would be actually losing money."

To resolve this recent problem, McFadden talks with Medi-Cal customers' doctors to see if the doctor can change the medication to a profitable substitute, if not, he has to transfer the prescription to a chain pharmacy.

But health care providers in the state are not taking the funding cuts without a fight.

On July 11, the emergency panel of the Ninth Circuit Court of Appeals reversed the June 25, order of the U.S. District Court in Los Angeles which had denied a preliminary injunction to stop the 10 percent Medi-Cal payment cut. Medi-Cal is the state's version of the federal Medicaid program.

The Ninth Circuit Court of Appeals issued a one-month interim emergency order enjoining the 10 percent payment cut to pharmacies in the fee-for-service Medi-Cal program until August 11.

The emergency panel also stated it would continue the interim relief if by August 11 the District Court has not reheard and ruled on the plaintiffs' motion for preliminary injunction.

The plaintiffs in this case are a mix of Medi-Cal fee-for-service and managed care beneficiaries, pharmacies, and two Gray Panther groups, according to the Medicaid Defense Fund (MFD), which claims the Supremacy Clause of the U.S. Constitution prevents the California Legislature from reducing Medi-Cal rates for purely budgetary reasons, in violation of the Medicaid Act.

McFadden recently filled out a questionnaire he received from MDF. In response he explained to MDF that his business functions on 95 percent pharmacy sales and five percent other sales, and that his percentage of prescription gross sales for Medi-Cal is 24 percent, Medicare Part D is 34 percent, other third party is 40 percent, and private is two percent.

"The features that distinguish my pharmacy operation from other pharmacies is that this is an independent, locally owned pharmacy," McFadden said. "We, like Prices Pharmacy in town, are becoming a dying service as we are being eaten up by chain pharmacies that don't give the personal service independent pharmacies offer."

According to Michael Burke, of Mercy Medical Center, in Redding, other health care cuts in the proposed state budget will increase the number of uninsured Californians, put more pressure on already overburdened and overcrowded emergency rooms.

In addition, the state governor's proposed budget would bring substantial reductions to virtually all state-supported services including those to low-income seniors and persons with disabilities.

Health Insurance Counseling and Advocacy Program said in the five-county area which it serves, including Tehama County, the following people will be affected by the Governor's proposal:

· 17,039 low-income seniors and persons with disabilities, would lose the state cost-of-living adjustment for Supplemental Security Income/State Supplementary Payment cash assistance grants.

· 4,800 low-income seniors and persons with disabilities would receive fewer hours of services through the In-Home Supportive Services Program.

· 76,650 low-income Medi-Cal recipients who may have reduced access to health care services because of payment cuts to health care providers.

In addition, more than 5,400 In-Home Supportive Services workers in the HICAP, Chico, area would have their wages and working hours cut.

"These people provide services to low-income seniors and people with disabilities who live in their own homes to help prevent more costly out-of-home care," said Tatiana Fassieux, HICAP program manager. "Total wage cuts in the area would be more than $2.6 million."

As the state legislature continues to wrangle over the now overdue state budget, health care providers must continue to sit in a tenuous-at-best wait-and-hold position.

Julie Johnson may be contacted at 824-5474 or jjohnson@tcnpress.com.