FULL SUPREME COURT DENIES STAY

Medicaid Defense Fund to seek new injunction, before the 10% cuts are expected to begin
As you recall, on July 12, Justice Alito referred Medicaid Defense Fund's motion to stay the Ninth Circuit's approval of the AB 97 10% payment cut, to the full Supreme Court. Last week, however, the full Court issued an unsigned order, to deny the stay motion. We will of course be filing, before August 22, our formal Petition for Writ of Certiorari to the Supreme Court. But, now, any possible favorable Supreme Court decision, months away, would be far too late to prevent destruction of Medi-Cal in the meantime. Back in the federal district court Judge Snyder has stated that after reviewing position papers filed last week by all parties, that she will set a new hearing date in the case, at which Medicaid Defense Fund intends to file new motions for injunction to stop the 10% AB 97 pharmacy payment cut, on new grounds not litigated before in the case. We will update you when this new hearing is set, and what happens at this new hearing. Meanwhile, we learn that DHCS filed a new State Plan Amendment, SPA 12-014, which requests CMS to approve a restoration of the existing fee-for-service (FFS) payment (AWP - 17% + $7.25 dispensing fee) for the expensive carveout drugs, back to the March 31, 2012 filing date of this new SPA 12-014. (The effective date is not sooner because DHCS did not file the SPA sooner.) MDF anticipates a good possibility that CMS will approve some version of this new requested SPA 12-014. If so, this would be a game changer. Pharmacies in the managed care counties who mostly only dispense carveout drugs in FFS, would have most of their back recoupment wiped out, and would possibly, our sources indicate, only be charged 5% going forward when they dispense carveouts, (to recoup the 10% they will still be backcharged for dates of service before, possibly, April 2012). Pharmacies in other counties would be treated the same as in the managed care counties; but since they also dispensed many non-carveout drugs, their recoupment exposure would still be greater than for pharmacies in the managed care counties. ************************************************************
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