Federal Judge Issues Ruling on CPhA Lawsuit Against Department of Health Care Services (DHCS)
On February 21, 2020, the federal District Court issued a ruling partially denying CPhA’s request for issuance of a preliminary injunction. The Court ruled that the Department of Health Care Services can continue to implement, on a prospective basis only, the new NADAC pharmacy reimbursement methodology first made effective last year on February 23, 2019.
However, the Court refused to authorize implementation of the new NADAC reimbursement methodology on a retrospective basis. As we reported last week, at the Court’s request, the Department agreed to suspend retrospective application of the new methodology by recouping or clawing back supposed “overpayments” as an offset against current Medi-Cal pharmacy payments. In today’s ruling, the Court expressed concern that implementation of the new NADAC methodology on a retrospective basis may cause or exacerbate access concerns for Medi-Cal recipients and may cause irreparable harm to the members of the Association. The Court has requested further briefing on the Department’s plan to recoup payments retroactively and on the Association’s claim that retroactive application of the new methodology is an unconstitutional and improper impairment of a provider’s reasonable contract expectations.
In light of the recent introduction of CPhA-sponsored Assembly Bill 2100 (Wood) earlier this month, the Association also believes and intends to advise the Court that it makes little sense for the Department to take any further action which has the potential of being reversed by legislative action later in this current legislative session, thus requiring the same pharmacy claims to be reprocessed for a third time. Among other things, AB 2100, once enacted, would expressly preclude the Director’s efforts to apply the new NADAC reimbursement methodology for services between April 1, 2017 through February 22, 2019.
The Association will continue to keep you updated on further developments in the federal court proceedings as well as the progress of AB 2100 in its course through the Legislature.
Contact: Michelle Rivas, Vice President Center for Advocacy firstname.lastname@example.org.
Community Pharmacists throughout California have united to form Californians for Access to Life-Saving Medicine: a coalition of the Community Pharmacy Advocacy Group (CPAG). The purpose of CPAG is to help save your community pharmacy and preserve patients’ rights to come to your practice.
Consumer access to independent community pharmacies is at grave risk. Multiple factors by outside entities such as Medi-Cal program cuts and PBMs continue to erode the viability for independent pharmacies to survive.
Many community pharmacies have already experienced the recent reductions to Medi-Cal reimbursements under the new NADAC payment system. On May 31, 2019 a bureaucratic state decision made by former Governor Brown’s Administration became effective that denies life-saving medicines to Medi-Cal patients. Since implementation, it prevents community pharmacies from being able to provide vital medicines for California’s most vulnerable populations.
So how did we get here? In the summer of 2016, the federal Centers for Medicare and Medicaid Services adopted a rule to change how pharmacies are paid for dispensing prescription medicines. CMS is requiring every state to adopt new rules to conform with the federal standard but did not say how states should do this.
The new methodology developed by the California Department of Health Care Services will result in denying life-saving medicines for Medi-Cal patients. In fact, it has already started resulting in catastrophic reductions to Medi-Cal reimbursement rates for hundreds of locally owned pharmacies that serve Medi-Cal patients.
And what’s worse, is that it is not JUST forward-looking cuts. DHCS announced it is collecting two years of retroactive payments from community pharmacies that currently serve Medi-Cal patients, dating back to April 2017.
What does this mean? About 3 million medically fragile beneficiaries stand to lose access to their essential, life-saving medicines. Particularly those patients with:
- Behavioral health challenges
- Seniors and adults with disabilities living in long-term care facilities.
The new state rules will bankrupt many community pharmacies, effectively eliminating this important health care safety net for California’s most vulnerable populations.
California CAN and MUST do better.
The State of California’s practice to discriminate against patients and pharmacies is why Community Pharmacists statewide are fighting back against the state and standing up for Medi-Cal patients, their right to life-saving medicines and for all community pharmacists.
In addition, CPAG is taking on Pharmacy Benefit Managers (PBMs) who continue to negatively impact owner’s viability as an independent community pharmacy. It seems as if each year they develop creative new ways to financially penalize taking care of your patients. Whether it is DIR fees, GER, or insultingly low professional service dispensing fees, there seems to be no end to what PBMs will do to threaten independent community pharmacies.
CPhA was proud to work with Assemblymember Wood on the signing of AB 315 last year. For the first time, PBMs are now regulated by the Department of Managed Health Care (DMHC) in California. The implementation of this legislation will take some time as the agency rolls out the rule-making process. But in the meantime, PBMs continue to extract millions of dollars from independent community pharmacies. AB 315 was a huge victory, but we know that more needs to be done.
CPAG’s first priority is to address the DHCS’ clawback that began on May 31, 2019. Next we are challenging the flawed methodology that led DHCS to adopt the NADAC proposal for specialty medicines in the first place. Finally, we are mounting an aggressive legislative and public affairs campaign to shine more light on PBM practices and eliminate harmful policies, such as DIR fees, from being implemented in California.
Part of the public relations efforts to outline the negative impacts that PBMs have on the viability of community pharmacies. One strategy is to provide a video testimonial that will be used in advocacy and media outreach efforts. If you are willing to share your story, please email Nick Chiappe at email@example.com and we will add you name to the list of interview candidates.
In order to successfully build out this aggressive plan, we need resources to fight back.
We are asking pharmacy owners and friends of pharmacy to make a contribution to Californians for Access to Life-Saving Medicine, a coalition of the Community Pharmacy Advocacy Group. These contributions are reserved for these independent owner issues only, and are necessary to hire the best and brightest attorneys and public relations firm. Can we count on your support and contribution for the Community Pharmacy Advocacy Group fund? To contribute, click here.
Please email firstname.lastname@example.org.
The coalition is led by a group of independent, community pharmacists:
Amy Nguyen, Pharm.D., MBA
Eddie Gozini, Pharm.D.
Jack Vasoya, R. Ph.
Express Pharmacy, Pomona, CA
Jae Suh, Pharm.D.
Katie Bass, Pharm.D.
San Joaquin Drug Corporation
Ken Thai, Pharm.D.
986 Degrees Corporation
Kevin Komoto, Pharm.D., MBA
Liz Altmiller, PharmD
Your Drug Store, Bakersfield, CA
Micah Hata, Pharm.D.
Western University of Health Sciences
Mohammad Etminan, R.Ph., MS
Total Remedy and Prescription Center
Raja Sannidhi, Pharm.D.
Tamir Wertheim, Pharm.D., MBA
West Knoll Pharmacy
Advantage Healthcare Services
Thank you to all the 130+ pharmacies who have agreed to submit a declaration. The attorneys are working through the list of community pharmacy owners to assist in the suit. Please wait for further instructions.