44 New York State Lawmakers Urge Cuomo to Reverse Medicaid Drug Benefit Transfer

Forty-four New York state legislators have signed a letter to Gov. Andrew Cuomo (D) expressing “strong opposition” to the scheduled transfer in April of Medicaid managed care pharmacy benefits to Medicaid fee for service. They said the transfer “will have devastating consequences” for 340B health centers, HIV/AIDS clinics, and the state’s special managed care plan for individuals living with HIV/AIDS.

“This new policy will provide little to no benefit to the state and will devastate patients and the safety net providers they rely on for care,” the state lawmakers told Cuomo on Jan. 21. “We urge you to reverse the carve-out as soon as possible.”

If the pharmacy benefit transfer takes place as planned, the state’s 340B covered entities will have to begin billing the state health department for drugs dispensed to Medicaid beneficiaries at actual acquisition cost, effectively passing along all their 340B savings on covered outpatient drugs to Albany. The benefit transfer was attached to “must pass” state budget legislation last year.

A Jan. 8 state Health Department (DOH) FAQ about the pharmacy benefit transfer, also known as the “pharmacy carve-out,” says “NYS DOH expects the pharmacy benefit to be transitioned from the MC [managed care] to FFS [fee for service] effective April 1, 2021 per the enacted budget and does not intend to halt the progress.”

New York State safety-net health care providers are poised to lose 340B savings that “are often used to provide free medical care and prescription drugs for undocumented and uninsured individuals, counseling, care coordination, housing, food and other assistance,” the 44 state senators and assembly members said. “These funds are also used by some providers to operate community-based treatment programs for individuals struggling with mental health and substance use disorders.”

“Appropriating these resources from the safety net will ultimately prove harmful to the state itself, as the loss of 340B savings will result in service reductions and clinic and hospital closures, leaving vulnerable patients without access to the care they need,” the legislators told the governor.

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