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Pharmacy Defense Fund of California

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RE: MEDICAID DEFENSE FUND BULLETIN -  7.01.10

Update from Lynn Carman

To bring everybody up to speed with a short report:
 
The MDF preliminary injunctions in the 10% cut in 2008, -- including:
      - prescription drugs
      - NEMT
      - home health agencies
are being fought very hard by the State and by 22 other States, in the U.S. Supreme Court.
 
The Supreme Court (SC) adjourned this week for the summer, -- I do not believe they come back to Washington until October 1, -- without ruling on whether the SC would grant or deny the State's petition for review to the Supreme Court of our MDF preliminary injunctions in the 10% payment reduction case and in the 5%  payment reduction case.
 
Instead the SC ordered the Solicitor General (SG) of the U.S. to file a brief in the 10% injunction case, (Supreme Court No. 09-0958).  So the SG is having a meeting July 14, 2010 in Washington, D.C., which I will be attending with our Supremacy Clause expert counsel (Rochelle Bobroff), to see if we can educate the SG on the proper views concerning this case.
 
We expect the SG brief to be filed maybe a month before the Supreme Court returns for its 2010-2011 session.  Then the SC will grant or deny one or each of the petitions of the State in regarding the 10% and the 5% injunctions.
 
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The appeal of the State in respect to the May 5, 2010 injunctions which MDF obtained with respect to the:
 
       - Upper Billing Limit cut, and,
       -the MAIC payment cut,
 
has been stayed by the 9th Circuit, pending the ruling which Judge Snyder will be making in the next month or so, on MDF's Motion to Reconsider her May 5, 2010 denial of preliminary injunction to stop the 4% reduction in brand drug reimbursement, caused by the First Databank, Inc. 4% AWP markdown on brands on September 26, 2009.
 
We argue our motion for Judge Snyder to reconsider her denial of preliminary injunction in the 4% brand payment reduction case, on July 12, 2010, in Courtroom 5, second floor, U.S. Courthouse, in Los Angeles.
 
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Judge Snyder, meanwhile, has issued a Stay Order in the initial 10% injunction case, pending final determination of the State's petition for review of that injunction to the Supreme Court.
 
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In the meantime, we expect full payment of the retroactive amounts owed to pharmacies for prescription drugs dispensed in the Medi-Cal Fee-for-Service program, for the period of July 1, 2008 through August 17, 2008, to be completed by DHCS this month, according to a prospective schedule filed by the Attorney General with Judge Snyder several months ago.
 
Of course, possibly, all prescription drug refunds on this retroactive payment order may not be completed until the end of August, just because of the "mechanics" of implementing the computer changes and the limitations of how many checks can be written by the computer contractor for DHCS in any given month.
 
***************************
 
MDF will be filing a motion to amend the UBL complaint before Judge Snyder, to include the two old DHCS "upper billing limit" regulations which DHCS recently "discovered" and claimed, for the first time in 50 years, apply to Medi-Cal.
 
I expect this motion to be filed within the next two months.  (I have to obtain a complete new set of declarations and prepare a complete new motion for preliminary injunction, or other relief, on these two new "phony" upper billing limit regulations!
 
Of course these two regulations never did apply to Medi-Cal.  But because of this fight-to-the-death position DHCS has taken for the past 3 years, this means that this new fight will also go on, for a long time.
 
**************************
 
I will be away on vacation from July 2  through July 10.  On July 12, I will be arguing our Motion to Reconsider Judge Snyder's denial of our preliminary injunction motion, in L.A.  On July 13,  I fly to Washington to participate in the SG presentation in the two Supreme Court cases: and will be back in my office on July 15.
 
Best to all,
 
Lynn S. Carman
Chief Counsel
Medicaid Defense Fund


From: John Cronin (based on input from legal counsel involved in the original 10% legal cases):

   1. The July 14 date in Washington, DC involves counsel for all the parties in the 10% case, which includes pharmacies, physicians, dentists, hospitals and other providers.  We expect the Solicitor General will have a separate meeting with representatives from the California Attorney General’s Office that same day.  The Supreme Court took no action on a second Petition for Review involving in the 5% reductions case.  The general belief is that the Supreme Court will decide that issue at the same time they decide the 10% case and that the Court will follow the recommendation of the Solicitor General’s Office, so the major effort at this point is to persuade he Solicitor General that the Supreme Court should not hear these cases.
 
YOUR CONTRIBUTIONS ARE STILL NEEDED:
If you haven't sent your 2010 contribution, please send at least 1,000 per pharmacy to either of the defense funds listed below.

To contribute to the Medicaid Defense Fund, mail your payment to:
    Medicaid Defense Fund
    8 Waterbury Lane
    Novato, CA 94949-8239

You may also send contributions to the Pharmacy Defense Fund of California at:
         PDFC
         4030 Lennane Drive
         Sacramento, CA  95834
         Attn: PDFC
For questions, contact Veronica Van Orman by email at: vvo@cpha.com.
    
5.25.10

Yesterday the U.S. Supreme Court, not surprisingly, requested the Solicitor General (SG) of the United States to file the views of the United States in respect to our 10% injunctions which Medicaid Defense Fund obtained in August and November 2008.
 
It happens that the Solicitor General is Elena Kagan, our next Supreme Court justice.  (Just like Chief Justice John Roberts, who was SG before Kagan.)
 
Elena Kagan was formerly a law clerk for Justice Thurgood Marshall, who impressed upon her that the Supreme Court was open to all, especially the poor and the disenfranchised, not just the corporations.
 
Therefore, since our case is fundamentally a case of whether you and I can can sue the government to protect ourselves against injury from the government, (as opposed to the Governor's fixed position that you and I have no right to sue the State to enjoin the State from injuring us), it would seem that the fact that Elena Kagan's office will be writing the SG brief to the Supreme Court, is a good sign in our favor.
 
It is an important case, because if we lose, not only do pharmacists lose, but everybody across the country loses because this would prevent them from suing the State or Federal government to protect themselves against injury from Government violation of federal law.
 
Lynn S. Carman
Chief Counsel
Medicaid Defense Fund

YOUR CONTRIBUTIONS ARE STILL  NEEDED:
If you haven't sent your 2010 contribution, please send at least 1,000 per pharmacy to either of the defense funds listed below.


To CONTRIBUTE to the Medicaid Defense Fund, mail your payment to:
    Medicaid Defense Fund
    8 Waterbury Lane
    Novato, Ca  94949-8239

You may also send CONTRIBUTIONS to the Pharmacy Defense Fund of California at:
         PDFC
         4030 Lennane Drive
         Sacramento, CA  95834
         Attn: PDFC
For questions, contact Veronica Van Orman by email at: vvo@cpha.com.

All community pharmacies must help to fight the drastic and unrealistic Medi-Cal cuts the State passed in the budget. These cuts will go into effect October 1, 2009.

The time to act is now!  At issue:

    * UBLs – upper billing limits
    * WAC-MAIC- using wholesale acquisition cost as a basis for calculating maximum allowable ingredient costs
    * First Data Bank 5% roll back of AWP without any adjustment.

Any one of these could put us out of business. All three most certainly will. Get out your credit card or checkbook and fight back! To contribute online, click here, or make out your check to: Pharmacy Defense Fund of California, Attention: APO and mail it to 4030 Lennane Drive, Sacramento, CA 95834.

For questions, call Brian Komoto at (661) 725-9489 or David Wilcox (559) 271-6370. To make a contribution by phone, contact Veronica Van Orman at (916) 779-4511.


Background

The Pharmacy Defense Fund of California was established in 2008 to fight budget cuts for Medi-Cal providers. A number of lawsuits were filed by multiple legal firms in this fight. CPhA and the California Retailers Association (CRA), along with the National Association of Chain Drug Stores (NACDS) mounted a significant PR campagin which included a website, letters, petitions, press conferences and much more. Today, those cuts have been stopped but a number of new issues surface every day. We still must see these lawsuits through and pay for them, we will need continued  funding for the battles ahead. Please send your contribution today using the links above.
In 2010 CPhA continues the following strategies:

    * Lawsuit/ Legal Action
    * PR Campaign
    * Grass Roots Legislative Effort
    * Coalition Mobilization
    * Cost of Dispensing Study
    * Heavy lobbying