California Medicaid reimbursement cuts to go forward

Coalition, including California Pharmacists Association, prepares petition to U.S. Supreme Court


A federal appeals court will let California implement drastic Medi-Cal (California’s Medicaid program) reimbursement cuts passed by the state legislature—an outcome that the California Pharmacists Association (CPhA), pharmacies, other health care providers, and patients fought in a series of legal battles since the cuts were approved by the state and CMS in 2011.

“We are preparing a petition to the U.S. Supreme Court” but the state of California “could technically begin implementing the cuts at any time if they desire,” Jon R. Roth, CAE, CPhA CEO, told

A spokesman for the California Department of Health Care Services, which administers Medi-Cal, directed on June 27 to a state government website that said “specific implementation dates for the reductions and recoupments are still under development.”

On May 24, the U.S. Court of Appeals for the Ninth Circuit denied a request from CPhA and the other plaintiffs for an en banc review of a December 2012 decision in which a three-judge panel had decided to allow California to move forward with the 10% Medi-Cal reimbursement cuts passed by the California Legislature in 2011 (A.B. 97), according to CPhA.

“It is absurd to think you can slash reimbursement rates resulting in pharmacists providing services below their actual costs while at the same time expanding the Medi-Cal program to 4 million additional beneficiaries under health care reform beginning in 2014—I am astonished that the State thinks this will work,” Roth said in a statement issued May 24.

On May 30, CPhA and the other plaintiffs filed a motion requesting the court to stay its May 24 decision until August 22 so that the health care coalition could have time to file a petition to the U.S. Supreme Court, according to CPhA.

But on June 14, the court denied the plaintiffs’ motion for a stay, according to court documents.

In February 2012, the U.S. Supreme Court decided in a 5–4 ruling to send a previous, similar case involving Medi-Cal cuts back to the U.S. Court of Appeals for the Ninth Circuit for reconsideration in light of new information cited in the Supreme Court’s opinion. In October 2011, the Supreme Court heard oral arguments in the case. APhA and other national pharmacy groups joined in filing a friend-of-the-court brief in the case in August 2011, supporting pharmacies and patients. The initial lawsuit was filed after similar Medi-Cal cuts were passed in 2008.