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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. Employers should not have racially discriminating mind set. It has huge impact on the society what the big players do or don't do in the industry. Background check is conducted just to verify whether information provided by the prospective employee is correct or not. It doesn't have any direct combination with the rejection of the employees. If there is rejection, there should be something effective and full-proof things on the table that may keep the company or the people associated with it in jeopardy.

  2. Unlike the federal judge who refused to protect me, the Virginia State Bar gave me a hearing. After the hearing, the Virginia State Bar refused to discipline me. VSB said that attacking me with the court ADA coordinator had, " all the grace and charm of a drive-by shooting." One does wonder why the VSB was able to have a hearing and come to that conclusion, but the federal judge in Indiana slammed the door of the courthouse in my face.

  3. I agree. My husband has almost the exact same situation. Age states and all.

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  5. Andrew, if what you report is true, then it certainly is newsworthy. If what you report is false, then it certainly is newsworthy. Any journalists reading along??? And that same Coordinator blew me up real good as well, even destroying evidence to get the ordered wetwork done. There is a story here, if any have the moxie to go for it. Search ADA here for just some of my experiences with the court's junk yard dog. https://www.scribd.com/document/299040062/Brown-ind-Bar-memo-Pet-cert Yep, drive by shootings. The lawyers of the Old Dominion got that right. Career executions lacking any real semblance of due process. It is the ISC way ... under the bad shepard's leadership ... and a compliant, silent, boot-licking fifth estate.

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