Mcgrx Inc. D/b/a Mcgregor's Med. On Time v. The State Of Vt.
| Decision Date | 05 January 2011 |
| Docket Number | Case No. 5:10-cv-l |
| Court | U.S. District Court — District of Vermont |
| Parties | McGRX, Inc. d/b/a McGREGOR'S MEDICINE ON TIME, Plaintiff, v. THE STATE OF VERMONT, OFFICE OF VERMONT HEALTH ACCESS, JAMES H. DOUGLAS, Governor of the State of Vermont, ROBERT HOFMANN, Secretary of the Agency of Human Services, SUSAN BESIO, Director of the Office of Vermont Health Access, and CYNTHIA D. LaWARE, Defendants. |
(Docs. 11, 14, 24, 34&36)
This matter came before the court on July 8, 2010 for oral argument on all pending motions. Post-hearing, Plaintiff, McGRX, Inc. d/b/a McGregor's Medicine On Time, amended its complaint for a second time. The parties completed their post-hearing briefing on November 12, 2010.
Plaintiff is represented by Matthew B. Byrne, Esq. and Robert F. O'Neill, Esq. Defendants, the State of Vermont, the Office of Vermont Health Access ("OVHA"), James H. Douglas, Governor of the State of Vermont, Robert Hofmann, Secretary of the Agency of Human Services, Susan Besio, Director of OVHA, and Cynthia D. LaWare (collectively, "Defendants"), are represented by Assistant Vermont Attorney General Bridget C. Asay.
Plaintiff's Second Amended Complaint arises out of a change made to Vermont's State Medicaid Plan governing the dispensing of certain maintenance drugs to Medicaid recipients. The amendment altered the dispensing schedule to a 90 day medication supply, except when a physician obtains approval for a shorter dispensing schedule (the "Regulation"). Plaintiff alleges that its own multi-dose medication dispensing system, which permits a shorter dispensing schedule, is medically necessary for certain Medicaid recipient customers whose disabilities hinder their ability to comply with their medication therapy regimes under the Regulation. Plaintiff asserts that both its own and its customers' rights have been violated as a result of the Regulation. On this basis, Plaintiff asserts an array of federal and state claims on its own behalf and on behalf of its Medicaid recipient customers with whom it contends it has a close relationship.
Pursuant to Fed. R. Civ. P. 12(b)(1) and (6), Defendants request dismissal of Plaintiffs Second Amended Complaint for lack of standing and failure to state a claim.1Defendants further seek dismissal on Younger abstention grounds. Defendants seek dismissal on sovereign immunity grounds of the claims set forth in Counts III-IV insofar as they pertain to the State of Vermont and OVHA. They also assert, for preservation purposes, a sovereign immunity claim with regard to Counts I and II. Plaintiff opposes dismissal.
Plaintiff is a Vermont corporation that operates as a "closed door, long-term care pharmacy." (Doc. 33 ¶ 4.)2 Plaintiff alleges that it is "a family run business that does not have maximizing profits as its chief goal." (Doc. 33 ¶ 42.) It provides pharmacy services to, among others, Medicaid recipients with special needs that require a higher level of medication therapy management. Although Plaintiff does not operate as a non-profit and financially benefits from a more frequent dispensing schedule, it alleges that it often puts its customers' interests ahead of its own profits and does not always collect co-payments from them.
Plaintiff works with Vermont doctors to provide multi-dose packaging for medications which are dispensed in less than 90 day increments. Plaintiffs multi-dose package system sorts drugs into individually sealed packages by day and time of day. Plaintiff alleges that this system assists disabled customers, especially those with multiple medical conditions which require multiple medications to treat, to adhere to a medication therapy regimen. In order to use Plaintiff's multi-dose system, a doctor must state in writing that the use of Plaintiff s system is medically necessary.
Plaintiff alleges that for many disabled persons, "receiving a 90-day supply of medications is the same as receiving no medications at all, because their disabilitiesprevent them from sorting medication by the day and the time of day that they should take the medication." (Doc. 33 ¶ 17.) Without Plaintiffs multi-dose system, Plaintiff alleges that some of its disabled customers may "wind up in institutions, " have "increased encounters with law enforcement officials, including arrest and incarceration, " and suffer "hospitalization, emergency room visits, re-entry into drug and alcohol treatment centers, and doctors visits." (Doc. 33 ¶¶ 17, 19.) While acknowledging that the Regulation permits physicians to dictate a shorter dispensing period, Plaintiff alleges that the need for physician approval, which Plaintiff describes as a "prior authorization, " "creates additional burdens for the disabled rather than make[s] an affirmative accommodation." (Doc. 33 ¶ 31.)
Defendant OVHA administers Vermont's Medicaid Program. The Regulation, as amended and approved provides, in relevant part, that:
A pharmacist must fill prescriptions in quantities of between 30 and 90 days supply for all drugs prescribed for continued regular use. The physician may prescribe for particular patients or conditions in lesser amounts and in these instances the pharmacist is required to fill as directed. Effective July 15, 2009, when OVHA is the primary payer, pharmacies will be required to dispense designated classes of maintenance drugs in 90-day supplies after the first fill. The first fill allows prescribers to test for therapeutic effectiveness and patient tolerance.
(Doc. 24-6 at 4.) Physicians, not pharmacists, decide when a more frequent dispensing schedule is medically necessary, as was made clear in CMS's approval process:
• Please clarify how the pharmacist will determine the particular patients or conditions for which these requirements will not apply.
Pharmacists do not determine which individuals fall under this requirement, prescribers do. Like other drugs, it is up to the prescriber to request a prior authorization, or exception, in this case. There is a list of the specific drugs that fall under this process on OVHA's web site. Both prescribers and pharmacists were given the option before this process went into effect to request a list of individuals affected by the change, in order to make the transition go smoothly. At this time, like with any other PA for a drug, if the prescriber has submitted and had the PA request approved, the pharmacy claim will go through with no problems. If the prescriber hasnot requested a PA/Exception, then they contact the prescriber for them to submit the PA/Exception. The pharmacy also has the option of calling the Pharmacy Benefits Manager to inquire if a PA/Exception was requested.
(Doc. 24-3 at 3.) The Regulation thus allows prescribers to request a more frequent dispensing schedule for Medicaid beneficiaries for whom it is medically necessary, and authorizes pharmacists to implement that request at a physician's direction.
Plaintiff alleges that prior to amending the Regulation, OVHA provided no opportunity for public comment, did not provide meaningful notice to beneficiaries of the "prior authorization" process, 3 and did not inform beneficiaries of their alleged right to a pre-termination evidentiary hearing. Somewhat contradictorily, Plaintiff also alleges that it "actively advocated for the rights of the disabled and against the implementation of the 90 day rule... in writing and in person[,]" (Doc. 33 ¶ 47) and that, as a consequence, Plaintiff was investigated by the State, causing it to suffer and to continue to suffer reputational and other damages.
The Second Amended Complaint asserts the following causes of action: Count I: Violation of the Americans with Disabilities Act ("ADA"), 42 U.S.C. § 12131; Count II: Violation of the Rehabilitation Act ("RA"), 29 U.S.C. § 794; Count III: Violation of the Due Process Clause of the United States Constitution; Count IV: Violation of 42 U.S.C. § 1983 and the Supremacy Clause of the United States Constitution; Count V: Violation of Vermont's Administrative Procedure Act, 3 V.S.A. §§ 801-849; and Count VI: Declaratory Judgment.
Presently pending in Vermont state court is the State of Vermont's civil enforcement proceeding against Plaintiff and Audrey McGregor Reardon for alleged violations of Vermont's Medicaid program, styled State of Vermont v. McGrx, Inc., d/b/a McGregor's Medicine-On-Time Pharmacy, and Audrey McGregor Reardon, No. 227-310 Wncv (the ). The state civil enforcement action was filed in Washington Superior Court on March 31, 2010, removed to this court on April 19, 2010 (Doc. 1 in 5:10-cv-95), and remanded to state court on September 16, 2010 (Doc. 15 in5:10-cv-95).
Defendants seek dismissal of each count of the Second Amended Complaint. With regard to Plaintiff's ADA, RA, and Due Process claims, the thrust of Defendants' motion is that that Plaintiff lacks standing to bring these claims on its own behalf or on behalf of its Medicaid recipient customers, and that even if standing may be found, Plaintiff fails to state a claim.
The ADA was enacted to "provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities[.]" 42 U.S.C. § 12101(b)(1) (2000). Here, Plaintiff relies upon the anti-discrimination provision of Title II of the ADA, which provides that "no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such...
To continue reading
Request your trial