California, for several years now, has grappled with a systemic budget shortfall that, despite multiple attempts at addressing, continues to this day. The state’s Medicaid program, during this timeframe, has been a prime target for finding “savings” for the state. These economically unsustainable cuts to vital Medicaid services have and will continue to create further harm to the state’s economic condition, unfairly force qualified providers from the marketplace; and severely limit access to health and pharmacy care for California citizens.

As a result of these severe and systemic budget issues and, most recently as a result of the passage of AB 97, California has mandated 10% across the board cuts for all Medi-Cal providers. (This follows an attempt to institute a similar level of cuts in 2008, which faces an ongoing challenge in the courts with the direct issue of whether patients/providers have the standing to sue being heard before the U.S. Supreme Court in the late, 2011). Cuts of this magnitude will result in the cost of many medications to be in excess of the Medicaid reimbursement levels for community pharmacists and pharmacies, thereby forcing some and, perhaps many, pharmacies to end service to Medicaid patients or to close their doors altogether.

In addition, California, as a result of the passage of SB 208, has also begun to move to managed care pharmacy for seniors and disabled with initial implementation having begun on June 1, 2011. SB 208, while mandating a move to managed pharmacy care, is largely silent on the details of implementation, leaving much to the administrative interpretation the CA Department of Health Services/Medi-Cal (DHS).

As these Medicaid changes are currently being implemented, PCAN recommends that protections for pharmacies and patients such as no mandatory mail-ordered prescriptions, prompt provider reimbursement, administrator transparency and an “any willing provider” provision be put in place, either administratively or contractually, to ensure quality pharmacy care for all Californians and also to ensure the financial stability of community-based pharmacies.

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