Back in 2017, the California Department of Healthcare Services (DHCS) approved a new methodology  – National Average Drug Acquisition Cost (NADAC) –  for reimbursing pharmacies for their drug cost. NADAC prices significantly reduced pharmacy reimbursements. See a related blog post.

For technical and financial reasons, the DHCS has not implemented the new reimbursement methodology until 2019. Only in 2020, it started sending notices of recoupment to pharmacies specifying the amounts owed.  For more than 2 years, the DHCS continued to pay pharmacies through the Medi-Cal claims processing system consistent with the rate methodology used prior to the NADAC implementation. This lead to overpayments to pharmacies.

Several pharmacists and patient advocacy groups filed legal actions against the DHCS and worked with legislature to eliminate these chargebacks to pharmacies. Finally, this week, the California Pharmacists Association  (CPhA) announced that Governor Newsom signed the State Budget forgiving $142 million in medication reimbursement clawbacks that the DHCS demanded from pharmacies.

We congratulate all pharmacies working with Medi-Cal patients, CPhA, and all other groups and individuals who were working on this important issue.