Pharmacists may sue to stop reductions in payments

SAN FRANCISCO
September 17, 2008 11:37am

California’s budget problems could get worse soon, thanks to a court ruling today.

A lawsuit brought by pharmacies and others challenging a California law ordering a reduction in payments under the state’s Medi-Cal program can go forward, the 9th U.S. Circuit Court of Appeals says in a ruling issued Wednesday.

The appeals court decision says it’s not deciding the merits of the lawsuit, but rather “we simply reaffirm over a century’s worth of precedent” and hold that there is a valid cause of action.

The state law, AB5, seeks to lower payments to medical service providers under Medi-Cal’s fee-for-service program by 10 percent.

The bill was passed in February as part of an effort to cope with a budget deficit.

Within a few weeks, the Independent Living Center of Southern California Inc., along with pharmacies, “gray panther” groups and other sued to stop enforcement of the law, contending the rate reduction conflicts with governing federal law.

Today’s appellate ruling means the law suit challenging the rate reduction can go forward.