The shift from a managed care model to a fee-for-service (FFS) model by New York Medicaid on April 1, 2023 marked a significant change with far-reaching implications. The transition, initially announced in 2020 and implemented last year, was motivated by the desire to address the high costs associated with the existing managed care approach. Governor Hochul’s administration anticipated that the fee-for-service model would allow the state to negotiate with pharmaceutical manufacturers and pay providers for covered services directly, rather than delegating the management of its Medicaid program to independent third-party health plans.
Proponents of this change previously emphasized the positive effect it will have on Medicaid beneficiaries’ ability to choose and access their own providers, while opponents expressed concerns that this benefit would be outweighed by the potential disruptions to patient treatment caused by the updates to the “preferred drug list” which accompanied this transition. Now, a year into this transition, there have been many changes observed.
Under this new plan, many medications that patients had been taking for years are no longer covered, which in turn has forced some to find therapeutic alternatives or turn to additional processes to have approval for their original medications. Despite these concerns, advocates of this change claim that this fear has proven to be nothing more than a minor inconvenience for some, as this new “preferred drug list” still covers many of the medications covered under the previous model. Therefore, many recipients have been able to access their same medications without incurring additional costs or causing any disruptions to their care.
In addition to the effects on patients, other providers such as clinics and hospitals have expressed concerns about its effect on their participation in the federal 340(b) program. Under the previous model, these providers could participate in this program, which provided extra revenue directly to pharmacies in exchange for providing services to Medicaid beneficiaries. Instead, since this shift has taken effect, pharmacies now are required to process Medicaid claims for patients through the NYRx platform, necessitating changes in their operational procedures. When processing a claim for a patient under this new system for the first time, pharmacies should confirm that they received patients’ New York State Benefit or managed care cards, which contain the client ID number necessary to process their prescriptions.
Following this transition earlier last year, the state continues to make updates to its Medicaid Program. Most recently, the New York State Department of Health made further updates to its NYRx Program, which took effect in December of last year. Specifically, several brand name medications have been removed from and added to the Dispense Brand Name When Less Expensive Than the Generic Program. Under this program, pharmacies are encouraged to dispense the brand name prescription drug where the brand name is less expensive than its generic equivalent. This is in contrast to New York’s “Dispense as Written” law which requires pharmacists to substitute a brand name prescription for its generic except where a prescriber has explicitly requested that the medication not be substituted. Accordingly, brand name drugs’ statuses directly impact which procedures must be adhered to when dispensing. Therefore, New York pharmacists should be sure to check the NYRx BLTG Program Brand Name Drugs List for updates in order to confirm that their dispensing practices are compliant with relevant rules and regulations.
How Frier Levitt Can Help You
If you are concerned about the effect that this change has on your New York-based pharmacy or want to ensure that your pharmacy is in compliance with New York’s regulations, Frier Levitt can help. Contact us to speak with an attorney today.
