Div. of Medicaid v. Miss. Indep. Pharmacies Ass'n
| Docket Number: | 2008-SA-01245-SCT | |
| Oral Argument: | 09-29-2009 | |
* This video is best viewed in the most current version of Google Chrome, Internet Explorer with Windows Media Player plug-in, or Safari (Mac Users). |
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| Supreme Court: | Opinion Link Opinion Date: 11-12-2009 Opinion Author: Pierce, J. Holding: Affirmed |
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| Additional Case Information: |
Topic: Medicaid provider reimbursement - Section 43-13-117(9)(b) - Authority of Division of Medicaid - Section 43-13-121 Judge(s) Concurring: Waller, C.J., Carlson, P.J., Dickinson, Randolph, Lamar, Kitchens and Chandler, JJ. Concurs in Result Only: Graves, P.J. Procedural History: Bench Trial Nature of the Case: CIVIL - OTHER |
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| Trial Court: |
Date of Trial Judgment: 06-26-2008 Appealed from: Hinds County Chancery Court Judge: William H. Singletary Disposition: The chancery court vacated an administrative rule promulgated by DOM that, as interpreted by the chancery court, added an additional method for calculating reimbursement to pharmacists in violation of Sections 43-13-117(9)(b) and 43-13-117 of the Mississippi Code. Case Number: G2008-704S/2 |
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| Note: | The video provided by the Court begins with the oral argument in progress. | |
| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | DIVISION OF MEDICAID, OFFICE OF THE
GOVERNOR AND MEDICAID EXECUTIVE
DIRECTOR ROBERT L. ROBINSON |
HAROLD EDWARD PIZZETTA, III, MEREDITH McCOLLUM ALDRIDGE, SHAWN STEPHEN SHURDEN |
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| Appellee: | MISSISSIPPI INDEPENDENT PHARMACIES ASSOCIATION, MISSISSIPPI PHARMACY ASSOCIATION, NATIONAL ASSOCIATION OF CHAIN DRUG STORES, WALGREENS CO., AND FRED’S STORES OF TENNESSEE, INC. | J. PRICE COLEMAN, LOWRY M. LOMAX, BARRY K. COCKRELL | ||
| Appellee #2: | ||||
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Medicaid provider reimbursement - Section 43-13-117(9)(b) - Authority of Division of Medicaid - Section 43-13-121 |
| Summary of the Facts: | The Division of Medicaid filed a “Notice of Proposed Rule Adoption” with the Mississippi Secretary of State. In the Notice, DOM stated that it was filing, as a final rule, an amendment to establish a State Maximum Allowable Cost program for certain multi-source (generic) drugs covered through the Mississippi Medicaid program. The proposed implementation date of Rule AP 2008-23 was scheduled to be April 1, 2008. Following publication, the Mississippi Independent Pharmacies, Mississippi Pharmacy Association, National Association of Chain Drug Stores, Walgreens Co., and Fred’s stores of Tennessee filed objections with DOM. In response, DOM filed an amended proposed rule on April 1, 2008, that merged SMAC into one of three existing methods of reimbursement known as estimated acquisition cost, or EAC. At request of Pharmacists, and in accordance with the requirements of the Mississippi Administrative Procedure Law, DOM conducted an oral hearing. On May 1, 2008, DOM published the final pharmacy reimbursement rule. Meanwhile, Pharmacists filed an appeal with the chancery court. The chancery court vacated the rule. DOM appeals. |
| Summary of Opinion Analysis: | To become a Medicaid provider, a pharmacist must submit an application and execute a Medical Assistance Participation Agreement with the Division of Medicaid. Pursuant to the participation agreement, the pharmacist fills prescriptions for Medicaid recipients and submits claims for reimbursement to the Division of Medicaid. The Division of Medicaid reimburses each provider at the end of each month according to a specific formula. The formula associates the rate and method of reimbursement with the pharmacists’ estimated acquisition cost, or EAC, among two other methods provided for in section 43-13-117(9)(b). DOM has consistently used EAC to calculate reimbursement, and EAC has always been defined in Mississippi using the average wholesale price. Initially, the Legislature gave DOM the discretion to define EAC by statute. In 2002, the Legislature amended section 43-13-117(9)(b) and provided a statutory definition for EAC. Using the average wholesale price, the Legislature set the reimbursement rate at 12 percent less than the average wholesale price paid by Medicaid providers. However, in 2004, the Legislature reinstated the language it had used prior to 2002, which allowed DOM to once again define EAC. DOM defined EAC as the average wholesale price less 25 percent, and it remained at that level until 2008. DOM relied on the language in the statue to validate the proposed rule. Section 43-13-121 of the Mississippi Code authorizes DOM to adopt and promulgate reasonable rules, regulations and standards, with approval of the Governor, and in accordance with the Administrative Procedures Law, section 25-43-1. Additionally, section 43-13-117(9)(b) provides the method and rate of reimbursement to providers of multi-source drugs (generic drugs). The statute does permit changes to the rates of reimbursement or payments without legislative amendment, but only when federal law so requires or whenever changes are necessary to correct administrative errors or omissions in calculating those payments or rates of reimbursement. These exceptions do not apply here. Thus, Rule AP2008-23 runs afoul of section 43-13-117, as it alters the way in which Medicaid providers (Pharmacists) are reimbursed without prior legislative amendment. |
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