Workgroup Considers Medicaid Pharmacy Carve-out

September 18, 2020

The fiscal year 2021 State budget carved the Medicaid pharmacy benefit out of managed care and into fee-for-service as of April 1, 2021. Due to concerns from various stakeholders—including providers, insurers, and pharmacies—it also created a stakeholder workgroup to discuss implementing this change.

GNYHA is concerned that carving out the pharmacy benefit could adversely affect provider reimbursement under the Federal 340B program. We are grateful for the inclusion of the workgroup, which has met three times and is required to issue recommendations by October 1. These recommendations likely will become topics of discussion during the next budget debate, which could present an opportunity to mitigate the negative consequences of the carve-out. However, this could prove difficult, given that DOB expects the change to yield significant savings and New York faces enormous financial challenges.’

The Health Committee chairs in both houses of the Legislature—Assembly Member Richard Gottfried (D-Manhattan) and Senator Gustavo Rivera (D-Bronx)—have introduced legislation (A.10960/S.8948) that delays the carve-out until April 1, 2024, for 340B providers (including hospitals) and HIV Special Needs Plans. GNYHA supports this bill.