Miss. high court: Medicaid erred on pharmacy rule

AP News
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Posted: Nov 12, 2009 4:25 PM

Mississippi Medicaid officials should have asked the Legislature for approval before tinkering with a law that would change reimbursements for pharmacists, the state Supreme Court has ruled.

The Supreme Court on Thursday upheld a chancery judge's ruling that the Division of Medicaid had no authority to change how pharmacists were paid to fill prescriptions for people enrolled in the program. Medicaid is a federal-state health insurance program for the needy, aged, blind and disabled and for low-income families with children.

The pharmacies sued Medicaid in 2008 shortly after the program sought to implement the new method of payments. The pharmacies said state law gives the Legislature sole authority to change the reimbursement plan unless there was a federal mandate.

Under Medicaid, states reimburse pharmacies for the cost of medicine provided to patients on the program. In the fiscal year that ended June 30, Mississippi spent $328 million on its Medicaid pharmacy program.

Justice Randy Pierce, writing Thursday for the Supreme Court, said while the courts usually bow to agencies on issues or rules and regulations, Medicaid officials acted outside their authority.

"This court takes no issue with Division of Medicaid's desire to cut costs during economic uncertainty ... While we recognize the particularly difficult financial position in which Medicaid finds itself, this court will not allow the plain language of the law to be swept away in the interest of cost containment. The formula for reimbursement was established by statute, and cannot be varied by the Division of Medicaid," Pierce wrote.

Assistant Attorney General Harold Pizzetta argued to the Supreme Court in September that lawmakers in 2003 gave the Medicaid Division more discretion to define costs and reimbursements. He said the proposed rule change was only that.

A Hinds County judge found three methods in state law to determine how much a pharmacist would be reimbursed for dispensing generic drugs. He said Medicaid exceeded its authority in adding a fourth method without the Legislature amending state law.