Pharmacy Cries Foul As Electronic Data Systems Details Its Three Month Medi-Cal Back Payment Timeline for Pharmacy Medi-Cal Providers

The California Pharmacists Association cries foul against Electronic Data Systems’ (EDS) re-payment timeline for Medi-Cal pharmacy providers. Last Friday, pharmacy providers were notified that a three-judge panel of the Ninth Circuit Court of Appeals acted to halt the ten percent payment cuts for prescription drugs dispensed under the Medi-Cal Program. While this was a victory for pharmacy and the patients they serve, EDS, which processes Medi-Cal claims, sent out a memo on Tuesday, July 15, 2008, which was then posted on the Department of Health Care Services (DHCS) web site, detailing their plan to handle the Medi-Cal repayment process to make pharmacy whole on transactions that took place from July 11, 2008 and beyond.

Under the plan, pharmacies will NOT be reimbursed on these transactions for up to three months and it will take three weeks before the cuts stop being taken out of pharmacy reimbursements.

The following statement came directly from the DHCS website:

“On July 1, 2008, the Department of Health Care Services (DHCS) implemented a 10 percent payment reduction to providers for various services, including pharmacy, as required by state law. On July 11, 2008, the U.S Ninth Circuit Court of Appeals imposed an interim stay of the reduction in the payments for prescription drugs for dates of service from July 11, 2008 until August 11, 2008. As a result, DHCS is working through the Medi-Cal fiscal intermediary (FI) to make the necessary claims processing changes to lift the ten percent payment reduction for payments for prescription drugs. Once these system changes have been implemented (estimated approximately three weeks to complete) the Medi-Cal FI will begin processing your repayments on a first in first out basis. Claims for services on and after July 11, 2008 processed with the rate reduction will be reprocessed by the State without pharmacies having to resubmit their claims. The process will involve reprocessing 500,000 prescription drug claims per week. Because of the large volume of claims that will have to be reprocessed, the entire process will take approximately 11 weeks after the ten percent payment reduction is initially lifted.”

“When the ten percent Medi-Cal provider cuts went into effect on July 1, 2008, pharmacy took substantial losses on the prescription medications they provide to patients,” said Lynn Rolston, chief executive officer of the California Pharmacists Association. “Medi-Cal was reimbursing pharmacy below the actual cost of the drug, and in turn pharmacists throughout California were forced to make tough decisions such as no longer accepting new Medi-Cal patients, turning away existing Medi-Cal patients and in some cases cutting hours and reducing staff. In most cases, pharmacies continue to provide needed drugs to Medi-Cal patients in hopes that we would be successful in one of our court actions. Our victory in court last Friday gave pharmacy hope and now this action by the state essentially negates the temporary restraining order. We have been told that the state and its fiscal intermediary, EDS, must do extensive testing before they make any changes to the system and under normal circumstances we applaud their diligence. But surely, under these emergency circumstances where the courts have determined that these cuts may cause irreparable harm, they must be able to find a rapid solution to this problem. We will do everything we can to work with them toward that end.”