Judge temporarily blocks Medicaid prescription fee cut

A federal judge has temporarily blocked Indiana from cutting the amount Medicaid pays pharmacies to dispense drugs from $4.90 to $3 per prescription because the state lacks federal approval and the cut might drive pharmacies out of the program serving needy and severely disabled people.

U.S. District Judge Tanya Walton Pratt issued a temporary restraining order Friday blocking the Indiana Family and Social Services Administration from continuing the cut it implemented July 1 without approval from the federal Medicaid program.

It was the third time in as many weeks that a federal judge has blocked policy changes set in motion by the Republican-controlled General Assembly. FSSA said it has to lower the payment because of $212 million in budget cuts ordered by lawmakers.

A trade group called Community Pharmacies of Indiana sought the order, saying the cut would cause its members to lose money and drive some from the Medicaid program. The group represents more than 170 independently owned pharmacies.

It said $4.90 was "borderline inadequate" and some pharmacies already were losing money on each Medicaid prescription they filled, Pratt said. If the cut remained in place, it could cause pharmacies to close, employees to lose their jobs, Medicaid services to cease and "serious complications" for children, seniors, and low-income and disabled people served by the federal-state health insurance program, Pratt said.

FSSA cut the payment under an emergency rule it approved in April and submitted to the U.S. Department of Health and Human Services for approval. Pratt noted that HHS asked FSSA last week for more information before it would approve or reject the change.

"Undeterred, the State is apparently marching forward with implementation of the Fee Reduction. From the Court's vantage point, the State's conduct is premature and irreconcilable with federal Medicaid law," Pratt wrote.

Pratt set an Aug. 24 hearing on the pharmacies' request for a preliminary injunction blocking the cut.

FSSA spokesman Marcus Barlow commented on the ruling only by saying that the agency was preparing for the August hearing.

A message seeking comment was left with Nathan Gabhart, president of the pharmacy group. His pharmacy, Williams Brothers Health Care Pharmacy of Washington, Ind., also is a plaintiff in the case.

Pratt also ruled against FSSA and the General Assembly on June 24 when she barred the agency from disqualifying Planned Parenthood of Indiana as a provider of general health care services under Medicaid simply because it also provides abortions. The state has appealed that ruling to the 7th U.S. Circuit Court of Appeals. On the same day, U.S. District Judge Sarah Evans Barker blocked two provisions of Indiana's new immigration law.