N.Y. and Calif. 340B Pharmacies Get Reprieve From Medicaid Cuts

New York State and California’s nationally watched efforts to transfer their pharmacy programs for low-income individuals from Medicaid managed care to Medicaid fee for service (FFS)—both scheduled to take effect on April 1—have been temporarily placed on hold. The states are national trendsetters. The move to FFS is intended to reduce costs by giving the states more negotiating power with drug manufacturers. However, the move would create a negative side effect for 340B providers who depend on revenue from Medicaid managed care plans.  

Under Medicaid FFS, 340B providers must bill at drug acquisition cost. Under Medicaid managed care, they can bill plans for 340B-purchased drugs at higher negotiated rates and use the revenue to support patient services. Health centers, HIV/AIDS clinics, and other providers with large Medicaid patient populations are leading opposition to the pharmacy benefit transfers in both states.

New York State and California’s nationally watched efforts to transfer their pharmacy programs for low-income individuals from Medicaid managed care to Medicaid fee for service (FFS)—both scheduled to take effect on April 1—have been temporarily placed on hold.

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