This week, the California Medicaid agency said it will send letters to pharmacies letting them know it will begin recouping funds that it says providers owe Medi-Cal. The 60-day notices will take effect from the date on the letter for claims dating from June 1, 2011 to February 6, 2014.

The state previously authorized a 10 percent reduction in Medi-Cal payments to pharmacies for certain drugs in 2011. But before the cut was implemented, NACDS and a group of allied stakeholders filed a lawsuit to ban the collection of funds, which was sustained until June 2013. 

Starting in August of this year, the state says it will retroactively reduce reimbursement for some drugs dispensed by pharmacies after June 1, 2011. The state plans to exempt certain drugs from the cuts, as well as drugs dispensed to Medicaid managed care plans.  NACDS’ preliminary calculations found that with the exemption of those drugs, the cut to pharmacy reimbursement appears closer to 1.7 percent. However, those drugs not on the exemption list are subject to both prospective and retrospective cuts, and all drugs are subject to certain months where the exemption for pharmacy did not apply.

NACDS is aligned with a coalition of providers, urging legislators to eliminate the 10 percent Medi-Cal provider reimbursement rate cuts both prospectively and retroactively for pharmacy, medical supply and durable medical equipment services. Efforts in the Capitol are currently focused on budget conferees.  On June 2, the “We Care for California” healthcare provider coalition held a rally at the Capitol. Also this week NACDS, along with allied California stakeholders, urged the Budget Conference Committee members to fully rescind the 10 percent payment reduction for Medi-Cal providers.