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Judge blocks Medicaid fee cut to pharmacies

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A federal judge in Indianapolis has temporarily blocked the state from cutting the fees it pays to pharmacists for dispensing Medicaid prescriptions.

On July 8, U.S. Judge Tanya Walton Pratt in the Southern District of Indiana granted a temporary restraining order against the Indiana Family and Social Services Administration and its Office of Medicaid Policy and Planning. Her decision came a week after the non-profit Community Pharmacies of Indiana and Williams Brothers Health Care Pharmacy in southern Indiana filed a suit challenging the new policy that would have taken effect July 1.

Specifically, the lawsuit challenges a 38 percent cut in the Medicaid pharmacy-dispensing fee; meaning pharmacies would receive $3 instead of $4.90 for preparing and dispensing any particular drug under the Medicaid program.

The lawsuit alleges the cut violates the federal Medicaid law because the state FSSA secretary didn’t approve the fee reduction as required and that runs contrary to the Supremacy Clause of the U.S. Constitution. The suit also alleges the fee reduction violates Indiana Code 12-15-13-2, which states that Indiana Medicaid providers must offer services to program recipients similar to what the general population might receive.

The plaintiffs argue that if imposed, the cut could result in pharmacies closing and patients being unable to access their needed medications.

But the state disagreed, saying the reduced rate was aimed at making sure Indiana met the $212 million budget reduction mandated by the General Assembly. In a brief filed July 6, the Indiana attorney general’s office also contended that the non-profit group representing 170 local pharmacies statewide isn’t a Medicaid recipient and shouldn’t be able to challenge a federal program designed for patients, not pharmacies.

“Requiring the State to continue to reimburse Plaintiffs under the old rate would negate the purpose of the Medicaid Act and would not in any way serve the poor and aged – the intended beneficiaries of the Medicaid Act,” the state’s brief says.

Judge Pratt ruled in favor of the plaintiffs, but noted in her grant of the temporary restraining order that both sides present compelling arguments and she still has some question about whether a private cause of action exists here.

Caselaw dictates that the Supremacy Clause doesn’t create rights for Medicaid Act providers to sue for enforcement, and Judge Pratt agreed that no authority supports the notion that the statute includes right-creating language directed at those providers.

But those arguments weren’t enough to persuade her to the state’s side.

In her decision, Judge Pratt determined the IFSSA acted prematurely in cutting the dispensing fee before the reduction was approved by the U.S. Department of Health and Human Resources. That reduction is irreconcilable to the federal statute and would cause many pharmacies to “continue to hemorrhage dollars” and affect their ability to continue providing Medicaid services, she wrote.

The judge wrote that precedent from both the U.S. Supreme Court and the 7th Circuit Court of Appeals recognizes the availability of injunctive relief to enjoin state officers from implementing a rule or regulation that’s preempted under the Supremacy Clause, and the plaintiffs don’t have to show the Medicaid Act confers a private right of action for injunctive relief.

“Obviously, this harm could trickle down to Medicaid patients who constitute the poor, the elderly, the disabled and families with children, many of whom reside in rural areas with a dearth of other pharmacy options within close proximity,” she wrote.

A briefing scheduled is being worked out with U.S. Magistrate Judge Denise LaRue, and Judge Pratt has set a hearing on the preliminary injunction for Aug. 24.

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  1. It appears the police and prosecutors are allowed to change the rules halfway through the game to suit themselves. I am surprised that the congress has not yet eliminated the right to a trial in cases involving any type of forensic evidence. That would suit their foolish law and order police state views. I say we eliminate the statute of limitations for crimes committed by members of congress and other government employees. Of course they would never do that. They are all corrupt cowards!!!

  2. Poor Judge Brown probably thought that by slavishly serving the godz of the age her violations of 18th century concepts like due process and the rule of law would be overlooked. Mayhaps she was merely a Judge ahead of her time?

  3. in a lawyer discipline case Judge Brown, now removed, was presiding over a hearing about a lawyer accused of the supposedly heinous ethical violation of saying the words "Illegal immigrant." (IN re Barker) http://www.in.gov/judiciary/files/order-discipline-2013-55S00-1008-DI-429.pdf .... I wonder if when we compare the egregious violations of due process by Judge Brown, to her chiding of another lawyer for politically incorrectness, if there are any conclusions to be drawn about what kind of person, what kind of judge, what kind of apparatchik, is busy implementing the agenda of political correctness and making off-limits legit advocacy about an adverse party in a suit whose illegal alien status is relevant? I am just asking the question, the reader can make own conclsuion. Oh wait-- did I use the wrong adjective-- let me rephrase that, um undocumented alien?

  4. of course the bigger questions of whether or not the people want to pay for ANY bussing is off limits, due to the Supreme Court protecting the people from DEMOCRACY. Several decades hence from desegregation and bussing plans and we STILL need to be taking all this taxpayer money to combat mostly-imagined "discrimination" in the most obviously failed social program of the postwar period.

  5. You can put your photos anywhere you like... When someone steals it they know it doesn't belong to them. And, a man getting a divorce is automatically not a nice guy...? That's ridiculous. Since when is need of money a conflict of interest? That would mean that no one should have a job unless they are already financially solvent without a job... A photographer is also under no obligation to use a watermark (again, people know when a photo doesn't belong to them) or provide contact information. Hey, he didn't make it easy for me to pay him so I'll just take it! Well heck, might as well walk out of the grocery store with a cart full of food because the lines are too long and you don't find that convenient. "Only in Indiana." Oh, now you're passing judgement on an entire state... What state do you live in? I need to characterize everyone in your state as ignorant and opinionated. And the final bit of ignorance; assuming a photo anyone would want is lucky and then how much does your camera have to cost to make it a good photo, in your obviously relevant opinion?

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