Long Term Care Pharmacy Alliance v. Ferguson

Medicaid Reimbursement

Long Term Care Pharmacy Alliance v. Ferguson,
No. 03-1895 (1st Cir. Mar. 17, 2004)

An
alliance of pharmacies that provided prescription drugs to nursing homes sued
the Commonwealth of Massachusetts to prevent the state from implementing an
emergency regulation that would reduce the rates that the state pays to pharmacies
under the state’s Medicaid program to reimburse them for prescription
drugs. The district court, finding that the pharmacies were covered entities
under Medicaid because they provided “nursing home services,” granted
a preliminary injunction pending a notice and comment rulemaking by the state.
The U.S. Court of Appeals, First Circuit overruled the district court, vacating
the preliminary injunction. The appellate court found that the pharmacies were
not covered entities under Medicaid because they provided drugs to the nursing
home which then provided them to the patients. The appellate court compared
the pharmacies in the alliance to retail pharmacies that provide prescription
drugs for Medicaid patients who walk into drugstores and are not covered by
Medicaid. Finally, the court found that Medicaid does not create a private cause
of action for pharmacies that think state reimbursement is inadequate, their
only recourse is to not participate in Medicaid.