On April 6th, 2021, the New York legislature announced that it was delaying a controversial policy that would require the New York Medicaid program to carve out the pharmacy benefit from the state’s Medicaid managed care program and shift payment of drugs covered under that benefit to fee-for-service reimbursement. The two-year delay represents a big win for 340B covered entities and shows the impact that engaging community leaders can have in the fight to protect the 340B safety-net for those they serve. Ryan White clinics, Federally Qualified Health Centers, safety net hospitals, and other safety net providers, worked with community leaders and local advocacy groups to warn lawmakers about the serious fiscal and social burdens that the carve out would cause if implemented. Advocates argued that hundreds of millions of dollars would be diverted from the 340B community healthcare safety net to the state, leading to service reductions, clinic closures, and disrupted healthcare delivery for New Yorkers covered by Medicaid and people who are uninsured. Leading the charge was Ryan White Clinics for 340B Access (RWC-340B) who worked closely with Save the New York Safety Net, a statewide coalition of community health clinics, community-based organizations and specialized HIV health plans committed to serving vulnerable New Yorkers across the state, ending the epidemic and saving the 340B drug discount program. A similar carve out proposal in California is the subject of a lawsuit seeking to prevent implementation and is also facing a delay attributed to the purchase by Centene of Magellan, the project’s contracted vendor. California’s Department of Health Care Services (DHCS) issued a release on February 17 announcing that it is delayed the planned “go-live” date of April 1, 2021 because of the “need to review new conflict avoidance protocols” submitted by Magellan. The state of New York contracts with Magellan to administer its Medicaid fee-for-service (FFS) pharmacy program.
