ILNews

Judge blocks Medicaid fee cut to pharmacies

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Indiana State Bar Association

Indianapolis Bar Association

Evansville Bar Association

Allen County Bar Association

Indiana Lawyer on Facebook

facebook
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. Hail to our Constitutional Law Expert in the Executive Office! “What you’re not paying attention to is the fact that I just took an action to change the law,” Obama said.

  2. What is this, the Ind Supreme Court thinking that there is a separation of powers and limited enumerated powers as delegated by a dusty old document? Such eighteen century thinking, so rare and unwanted by the elites in this modern age. Dictate to us, dictate over us, the massess are chanting! George Soros agrees. Time to change with times Ind Supreme Court, says all President Snows. Rule by executive decree is the new black.

  3. I made the same argument before a commission of the Indiana Supreme Court and then to the fedeal district and federal appellate courts. Fell flat. So very glad to read that some judges still beleive that evidentiary foundations matter.

  4. KUDOS to the Indiana Supreme Court for realizing that some bureacracies need to go to the stake. Recall what RWR said: "No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we'll ever see on this earth!" NOW ... what next to this rare and inspiring chopping block? Well, the Commission on Gender and Race (but not religion!?!) is way overdue. And some other Board's could be cut with a positive for State and the reputation of the Indiana judiciary.

  5. During a visit where an informant with police wears audio and video, does the video necessary have to show hand to hand transaction of money and narcotics?

ADVERTISEMENT