30 Mar NY MEDICAID CARVE-OUT REPEAL AND SUIT
To reign in prescription drug costs and increase Medicaid program transparency, New York’s Governor, Kathy Hochul, and the New York Medicaid Redesign Team announced earlier this year that the state would carve-out the pharmacy benefit from the Medicaid program. After being delayed for two years, the carve-out is set to go into effect at the beginning of April. However, legislators in the New York State Senate repealed the change in the one-house budget resolution this month.
Since the state’s announcement to switch to a fee-for-service model, there has been an ongoing clash between providers and pharmacists. Both groups are concerned about the state’s vulnerable populations but disagree on how to deliver care to them most appropriately. The legislators behind the repeal fear that the carve-out will interfere with the delivery of benefits, particularly at a time when the state will be executing eligibility redeterminations. Alternatively, advocates see it as an opportunity to streamline the Medicaid program.
Assembly Speaker Carl Heastie is among the legislators behind the repeal. He fears the carve-outs impact on entities that serve the states most vulnerable populations. Heastie wants to protect 340b provisions that safety net providers rely on.
Pharmacists in support of the move feel that the move is long overdue. They believe the switch will improve program transparency and help expand access for program beneficiaries by giving them more choice in who fills their prescriptions.
In addition to the repeal, a legal challenge opposing the carve-out also started recently. Shortly after the one-house budget resolution was passed, safety-net providers Evergreen Health and Heritage Health and Housing filed a lawsuit against the New York State Department of Health to stop the April 1st carve-out. According to the case, the state’s decision is discriminatory and violates the ACA.
In recent months, New York’s decision to shift from a managed care model to a fee-for-service model has been a major source of contention. While the carve-out is set to begin on April 1st, it now faces a repeal effort from the New York State Senate and a lawsuit from providers. It’s not clear how the carve-out will be impacted at this point, but given the repeal, lawsuit, and upcoming eligibility redeterminations, there are undoubtedly several issues for the state to work through.