30. December 2011 · Comments Off · Categories: Health Law

On Wednesday, December 28, a federal judge in California issued a temporary injunction blocking California’s implementation of a 10% rate reduction to “Medi-Cal” pharmacies. Medi-Cal is California’s state Medicaid program, designed to serve the state’s poor and disabled. This 10% reduction is part of a total reduction in state Medi-Cal to most “fee-for-service” providers passed by the California Legislature in March, 2011.

Because the Judge’s Order only addressed the rate reduction that applies to pharmacies, other programs in California may still be affected by the federal government’s approval of the 10% cut for Medi-Cal fee- for- service health care providers. Nevertheless, some interesting points about the carefully and strongly worded injuction bear mentioning:

  • The holding of the Court’s Order: The Court held that the new 10% reduction to Medi-Cal particpating pharmacies violates the federal Medicaid Act, because the cut was enacted for purely budgetary reasons, and without consideration of the impact the reduction would have on Medi-Cal beneficiaries’ access to medicines. The reduction would cause pharmacies, and the STATE”S Medicaid benficiaries, harm becasue the pharmacies would not be able to continue operating in the Medi-Cal program with the 10% reduction.
  • California’s budget crisis does not “. . . in social welfare cases, constitute a critical public interest that would be injured by the grant of preliminary relief. In contrast, there is a robust public interest in safeguarding access to health care for those eligible for Medicaid…Further, the Ninth Circuit has explained that ‘it would not be equitable or in the public’s interest to allow the state to continue to violate the requirements of federal law.’ ”
  • The Court found, as well, that it was likely that the US DHHS’s approval of the California State Plan Amendment (the amendment to California’s state Medicaid Plan, the document which governs how doctors, hospitals, and others providing services to Medicaid partipants are paid) “would be found to be arbitrary and capricious resulting in a continuing violation of federal law.”

Now, it is only a temporary injunction, and applies to pharmacies, but the Order holding that state budgetary concerns resulting in reductions in services called for under federal law is interesting, to say the least, and no doubt has applicability to many states’ Medicad State Plans throughout the country.

Stay tuned…

26. December 2011 · Comments Off · Categories: Health Trends

Ah, the lists of the year… let’s face it, every publication seems to have them, and we love to read’ em.



One of the top ten Christmas trees?!!


Modern Healthcare has come out with a few of its top stories.  No surprises, really…the court battles over the Patient Protection and Affordable Care Act and (cue drum role) “final regulations implementing Medicare’s accountable care organization program  and final regulations implementing Medicare’s value-based purchasing system” (cut drum role).  Of course they are BIG stories.  But they are “devils in the details” stories, and they require more than just 4 minutes on the evening news.  What is the similarity between all these “news worthy events?” The word of 2011 (and probably 2012) has been and will be “reimbursement,” that is – how are providers going to be paid by Medicare and, ultimately, the private insurance payors.


Meanwhile, our friends at teh New York Times have a list.  Ugg.  The Times’ most viewed stories are about diets and muscles.  “[H]ealth-conscious Americans were extremely interested in learning how to look like the muscular lead character in the superhero movie ‘Thor,’ starring Chris Hemsworth, followed by the ‘Ryan Gosling workout,’ the ‘Chris Hemsworth workout,’ and the ‘Captain America workout.’


News flash: Captain America is a comic book character…and the guy who plays him on the big screen is an actor…with tons of time and incentive to spend on honing his bod for shots that could not be digitally “altered.”  These workouts are great for the few of us who have hours a day to devote to them.


To their credit, however, the Times’ readers did choose a story that resonates: how too much time on the couch is dangerous.  Its message?  You can “work da body a la Ryan Gosling,” but the health benefits from just moving around – gardening, cleaning, and walking – are pretty darn good.  Hey, 2011 has been a tough year, so let’s start with small steps and then move forward in 2012.


And if we get some snow maybe we all finally could use some of these…




Happy New Year!

19. December 2011 · Comments Off · Categories: Health Law · Tags: , ,

Thirty two (that’s 32, count’em) organizations have been selected by the Center for Medicaid and Medicare Services to participate in the Pioneer ACO program. In its May 2011 announcement about the prgram, CMS had stated that to be “eligible to participate in the Pioneer ACO Model, organizations would ideally already be coordinating care for a significant portion of patients under financial risk sharing contracts and be positioned to transform both their care and financial models from fee-for-service to a three-part value based model.”


CMS provided additional description of the Pioneer model last year: The Pioneer ACO Model is designed for health care organizations and providers that are already experienced in coordinating care for patients across care settings. It will allow these provider groups to move more rapidly from a shared savings payment model to a population-based payment model on a track consistent with, but separate from, the Medicare Shared Savings Program. And it is designed to work in coordination with private payers by aligning provider incentives, which will improve quality and health outcomes for patients across the ACO, and achieve cost savings for Medicare, employers and patients.


So, these 32 organizations are not the ones who have applied for, or who may apply for, the other major ACO program, the Medicare Shared Savings Program.  These 32 are described by CMS as being seasoned organizations who already have experience in coordinating care for patients across care settings. 


Given this experience, the “pioneer model” of ACO’s may make sense for these particular organizations, although I would characterize the entire group as “experienced pioneers” and not “newbies in the woods.”