New York Medicaid Postpones Transition of Pharmacy Benefit

Last year, New York State approved the transition of the Medicaid pharmacy benefit, from managed care (MMC) back to fee-for-service (FFS). The effective date of that transition has been postponed for one month, to May 1, 2021. This will be a welcome, though temporary, reprieve from a transition that has caused major concern for providers with significant Medicaid populations, such as federally-qualified health centers and hospitals, particularly those who participate in the 340B Drug Pricing Program (the “340B Program”). In New York, 340B Program claims paid under FFS Medicaid are reimbursed at actual acquisition cost, whereas 340B Program claims paid under MMC are based on the pharmacy’s contract with the MMC plan. This change will effectively end the savings these providers realize through the 340B Program.

Pharmacies and providers should use this extra time to prepare for the transition by ensuring they are actively enrolled as an Ordering/Prescribing/Referring/Attending (OPRA) provider or transitioning their Medicaid patients to an OPRA provider. In addition, pharmacies and providers should confirm their readiness for processing Medicaid FFS claims and prior authorization (PA) requests. DOH has advised that active PAs issued by MMC plans prior to May 1, 2021 will be honored by the FFS program. Note that claims paid under medical (non-pharmacy) benefits are excluded from the transition, and will continue to be paid under MMC.

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Should you have any questions regarding the above, please contact the Garfunkel Wild attorney with whom you regularly work, or contact us at info@garfunkelwild.com.