Gustavo Rivera
New York State Sen. Gustavo Rivera (D) introduced bills to help 340B providers hurt by the state’s transfer of Medicaid managed care drug benefits to Medicaid fee for service on April 1.

Bills Filed in New York to Help 340B Providers Hurt by Medicaid Drug Benefit Transfer

A New York state lawmaker and strong 340B program supporter last week introduced bills to help 340B providers hurt by the state’s transfer of Medicaid managed care drug benefits to Medicaid fee for service on April 1.

Under Medicaid managed care, providers could bill plans for 340B drug at above their purchase costs and use the revenue to support their missions. Under Medicaid FFS, they must bill at acquisition cost plus a dispensing fee.

New York safety-net health care providers said it would take $705 million to make them whole. State budget legislation enacted early this month will provide just $210 million to offset providers’ lost revenues. A short-term funding bill in April that allotted Ryan White clinics $9 million separately.

State Senate Health Committee Chair Gustavo Rivera (D) introduced S. 6910 on May 15 to provide $775 million to 340B covered entities, beginning in 2024 and in every year thereafter, to compensate them for lost 340B savings due to the drug benefit transfer. The annual amount would be adjusted for inflation. The preamble to the bill says it will ensure the state lives up to the commitment it made in this year’s budget legislation “to guarantee funding support for the critical services provided by these entities moving forward.”

Rivera filed a second bill, S. 6911, on May 15 to create a “temporary 340B covered entity no-interest loan fund … to mitigate financial disruptions associated with” the drug benefit transfer. The bill’s preamble explains the loans are needed because “it is likely that it will take months” before entities see any of the money under the budget bill to offset their losses from the drug benefit transfer.

S. 6910 was referred to Rivera’s Senate Health Committee and S. 6911 to the Senate Finance Committee.

Rivera sponsored a bill in February to block the Medicaid drug benefits transfer, the same as one he introduced in 2022.

“The state has reserves far in excess of what is needed to soften the blow of the financial disruptions caused by the transition,” Rivera spokeswoman Valeria Munt said.