Alliance of Community Health Centers sues state, seeks to end plan to exclude them from federal drug pricing program 340B

SACRAMENTO, December 30, 2021 /PRNewswire/ — The Community Health Centers Alliance for Patient Access (CHCAPA) today renewed its lawsuit in federal court challenging the state’s Medi-Cal Rx plan and seeks an order to temporary ban to interrupt the implementation of the planned plan for January 1, 2022.

The request for an emergency order was necessitated by last-minute agency action taken yesterday, which confirmed that Medi-Cal Rx could and did “go live” on January 1, 2022, making the case ready for judicial review. Ten individual health centers joined the complaint and the TRO motion.

Medi-Cal Rx, which would drain hundreds of millions of dollars from community health centers, “shakes up the Medi-Cal reimbursement program for drug benefits. Medi-Cal managed care plans and Federally Qualified Health Centers (FQHCs) will be able to manage and track patient medication use and compliance and FQHCs will no longer be able to benefit from savings created by the prescription of drugs through the 340B discounted drug program (‘340B Programme’) as provided by the Congress. All of these savings will now go directly to the state,” the complaint states.

If allowed to be implemented, Medi-Cal Rx will “sculpt” pharmacy benefit for federal government community health centers 340B Drug pricing program. The move would be a major financial blow to health centers already reeling from the Covid-19 pandemic and divert Congressional funds to state funds intended to help federally qualified health centers provide more services. If that happens, CHCAPA believes it will threaten access to care for patients, the vast majority of whom live below the federal poverty level and face significant additional barriers to care.

“With Medi-Cal Rx, the state skims the cream but leaves FQHCs with the administrative burden of compliance, and their patients are locked in,” said Anthony White, president of CHCAPA, a national organization of federally licensed health care centers. “The state’s ill-conceived action threatens the survival of many community health centers that provide quality care to low-income communities across the state. It creates additional hardship for Medi-Cal patients who are already face a daunting health care bureaucracy every day as they seek to access care.”

In 2019, Governor Newsom issued an executive order directing the Department of Health Services to transition all pharmacy services from Medi-Cal managed care to fee-for-service delivery. The plan, now known as Medi-Cal Rx, excludes federally licensed health centers from the 340B drug discount program, which requires drug manufacturers to offer deep discounts to authorized Medi-Cal service providers. These providers can then negotiate market rate payments from managed care plans.

FQHC 340B savings fund programs that are essential to the health of the people served and the community as a whole. 340B savings help fund important programs that California healthy. As noted Colleena CurtisPresident and CEO of United Health Centers of the San Joaquin Valley“After Medi-Cal Rx, when all UHC pharmacies are operating at a loss, UHC will likely close its 10 pharmacies permanently, laying off approximately 46 staff. care coordinators and patient transportation services are at risk of being significantly reduced or eliminated.”

“Medi-Cal patients depend on us for access to comprehensive primary and preventative health care,” said Leslie Abasta Cummings, CEO of Livingston Community Health, which operates six health centers in the Central Valley. “This new system will be devastating. It will force us to reduce the level of care we provide and the number of patients we are able to serve.”

“By excluding our centers from 340B The program will compromise patient access to care issues and increase the risk of health problems and increased costs,” said Ronald E Castle, CEO of Community Health Centers of Central Coast, Inc., where he oversees 30 health centers and seven mobile dental and medical units. “The impact of this pharmacy transition is frightening and devastating to the health outcomes of our patients.” Forty-seven percent of patients at its centers are at or below the federal poverty level.

SOURCE Alliance of Community Health Centers for Patient Access

Maria J. Book