Pharmacy group sues over state's Medicaid fee cut

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A non-profit group for local pharmacies statewide is suing the state’s Medicaid office in federal court, attempting to block cuts to the fees given to local pharmacies participating in the Medicaid program.

Community Pharmacies of Indiana and Williams Brothers Healthcare Pharmacy in Southern Indiana filed a lawsuit July 1 in U.S. District Court for the Southern District of Indiana seeking a temporary restraining order and permanent injunction against Indiana Family and Social Services Administration’s Office of Medicaid Policy and Planning. The suit aims to stop the state from imposing a 38 percent cut in the Medicaid pharmacy-dispending fee, which would mean pharmacies would receive $3 instead of $4.90 for preparing and dispensing a particular drug.

If imposed, that cut would be in effect from July 1, 2011 until June 30, 2013, and the CPI says it could result in pharmacies closing. Such closings could put patients at risk who may not have access to their needed medications as a result.

“We don’t feel as though we have any choice,” said Nathan Gabhart, president of CPI that represents about 170 pharmacies statewide. “Litigation is always the last resort, and in this instance, it’s the only option left. We have a very real concern, based on our research, that this cut will force a number of pharmacies in Indiana to drop out of the Medicaid program and jeopardize many Medicaid patients’ access to the vital prescription drugs that they need to stay healthy and in some cases to stay alive.”

On top of this cut, the lawsuit says pharmacies already took a 34 cut on brand name medication reimbursement in September 2009.

The lawsuit alleges the cut violates federal Medicaid law because the state FSSA secretary didn’t approve the fee reduction as required and that also 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.

Since the suit was filed July 1 challenging a cut designed to take effect that day, Judge Tanya Walton Pratt held an emergency hearing to hear initial arguments from both sides. The Attorney General’s Office had just received notice that day, and so the judge gave the state office until 4 p.m. July 6 to file a brief in the case before she decides on the temporary injunction that would halt the new cut.


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  1. I have a degree at law, recent MS in regulatory studies. Licensed in KS, admitted b4 S& 7th circuit, but not to Indiana bar due to political correctness. Blacklisted, nearly unemployable due to hostile state action. Big Idea: Headwinds can overcome, esp for those not within the contours of the bell curve, the Lego Movie happiness set forth above. That said, even without the blacklisting for holding ideas unacceptable to the Glorious State, I think the idea presented above that a law degree open many vistas other than being a galley slave to elitist lawyers is pretty much laughable. (Did the law professors of Indiana pay for this to be published?)

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  3. Joe, you might want to do some reading on the fate of Hoosier whistleblowers before you get your expectations raised up.

  4. I had a hospital and dcs caseworker falsify reports that my child was born with drugs in her system. I filed a complaint with the Indiana department of health....and they found that the hospital falsified drug screens in their investigation. Then I filed a complaint with human health services in Washington DC...dcs drug Testing is unregulated and is indicating false positives...they are currently being investigated by human health services. Then I located an attorney and signed contracts one month ago to sue dcs and Anderson community hospital. Once the suit is filed I am taking out a loan against the suit and paying a law firm to file a writ of mandamus challenging the courts jurisdiction to invoke chins case against me. I also forwarded evidence to a u.s. senator who contacted hhs to push an investigation faster. Once the lawsuit is filed local news stations will be running coverage on the situation. Easy day....people will be losing their jobs soon...and judge pancol...who has attempted to cover up what has happened will also be in trouble. The drug testing is a kids for cash and federal funding situation.

  5. (A)ll (C)riminals (L)ove (U)s is up to their old, "If it's honorable and pro-American, we're against it," nonsense. I'm not a big Pence fan but at least he's showing his patriotism which is something the left won't do.