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Pharmacies Sue 3 States Over Medicaid Cuts

(CN) - Pharmacy chains in California, New York and Washington state say that recent 4 percent cuts in Medicaid reimbursements for prescription drugs could result in "drastic steps," including a mass exodus from the Medicaid program as paybacks fall below pharmacies' break-even costs.

The National Association of Chain Drug Stores and the National Community Pharmacists' Association say the cost-saving cuts violate the "access" and "quality care" requirements of state and federal Medicaid laws.

The groups, representing about 2,700 individual pharmacies in California, sued the state, Gov. Arnold Schwarzenegger and the California Department of Healthcare Services in Los Angeles Federal Court, seeking an injunction to stop the cuts.

Similar groups filed almost identical lawsuits Manhattan and Seattle.

The druggists say state officials didn't consult with them before making the reimbursement cuts, nor did they provide any kind of public notice.

The cuts could end up driving small pharmacies out of business, the pharmacists say, and violate laws requiring the states to keep reimbursements at levels that will ensure that "sufficient providers" stay in the plan.

"Irreparable harm will occur if the reimbursement goes into effect because pharmacies will be forced to ... reduce levels of service, deny prescriptions to new Medicaid beneficiaries, shut down, reduce service hours, and/or refuse to take any Medicaid beneficiaries," the California complaint states.

The groups want the courts to declare the reimbursement cuts illegal and stop the states from implementing them.

They California plaintiffs are represented by Yvette Roland with Duane Morris.

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