New York’s six-month Medicaid enrollment moratorium, in effect since July 30, 2026, and now well into its third month, has frozen new provider enrollments, reinstatements, and changes of ownership for pharmacies, Managed Long-Term Care plans, and other “high-risk” provider categories. While the moratorium is directed at Medicaid enrollment, its effects also extend into pharmacy benefit manager (PBM) contracting, credentialing, and pharmacy network access in ways that pharmacies need to evaluate.
New York State Medicaid has implemented a temporary provider enrollment moratorium that applies to pharmacy Categories of Service 0441 and 0442, effective July 27, 2026, and lasting for at least six months. During the moratorium, New York will not process new enrollments, reinstatements, or changes of ownership for covered pharmacy providers, and pending applications for those transactions will not be processed, regardless of their stage of review. Existing enrolled pharmacies are not automatically affected by the moratorium, but they should continue to maintain their enrollment files and complete revalidation when notified through the Provider Services Portal (PSP).
Because federal Medicaid rules require an initial six-month moratorium period and permit extensions in six-month increments when properly supported, pharmacies considering acquisitions, ownership changes, reinstatement, or new Medicaid enrollment should build additional timing risk into their plans and monitor Department of Health (DOH) and eMedNY updates closely.
Pharmacy Network Access and PBM Credentialing Disruptions
PBMs serving New York Medicaid Managed Care plans rely on Medicaid enrollment as a threshold credentialing requirement. A pharmacy that cannot complete Medicaid enrollment during the moratorium cannot satisfy PBM network onboarding requirements tied to active Medicaid provider status. The practical result is that new pharmacies, pharmacies undergoing ownership changes, and pharmacies seeking to expand into additional Medicaid Managed Care networks may be unable to secure or maintain PBM network participation while the moratorium remains in effect.
Pharmacies locked out of Medicaid enrollment are simultaneously locked out of the PBM networks that administer pharmacy benefits on behalf of managed care plans. For pharmacies whose revenue depends significantly on Medicaid prescription volume, this may result in immediate and continued revenue disruption.
Change of Ownership (CHOW) Transactions and PBM Contract Complications
The moratorium’s effect on changes of ownership (CHOW) introduces additional concerns when contracting with PBMs. PBM provider agreements typically require pharmacies to maintain current and valid Medicaid enrollment. When a pharmacy undergoes a change of ownership that would ordinarily require an updated Medicaid enrollment, and that enrollment cannot be processed because of the moratorium, the pharmacy’s existing PBM contract status may require careful evaluation. Depending on the terms of the PBM agreement, a pharmacy’s inability to maintain or update its Medicaid enrollment following a CHOW could affect credentialing or potentially result in contract termination, suspension, or loss of network participation, even if the pharmacy is otherwise fully operational.
Even though the DOH may still be notified of a CHOW transaction during the moratorium, no CHOW application can be submitted until the moratorium is lifted. That distinction is important for PBM notification and credentialing purposes, and pharmacies should coordinate Medicaid notifications and PBM communications carefully during this period.
What Pharmacies Should Do Now
Pharmacies operating in New York or planning to enter the New York Medicaid market should review all PBM provider agreements for provisions tied to Medicaid enrollment status, including credentialing, recredentialing, change of ownership notification, and termination provisions. Pharmacies involved in pending or contemplated ownership changes should determine whether the transaction will trigger Medicaid enrollment requirements that cannot be completed during the moratorium. They should also coordinate Medicaid CHOW notifications with PBM notification requirements to ensure that PBMs are informed of ownership changes even where the formal enrollment application cannot be submitted.
Critically, pharmacies should also confirm revalidation deadlines through the PSP and complete revalidation promptly when notified to do so. A failure to revalidate on time will result in Medicaid enrollment termination, which can lead to loss of PBM network participation, disruption of claims processing, and loss of access to Medicaid patients. Pharmacies should not treat revalidation as a routine administrative exercise, as the downstream PBM consequences of a missed deadline can be significant.
Finally, pharmacies should assess the overall impact of any enrollment delay on PBM network participation and revenue, monitor DOH guidance as the moratorium develops, and evaluate whether alternative transaction structures may be available that avoid triggering Medicaid enrollment actions during the moratorium period.
How Frier Levitt Can Help
Frier Levitt regularly advises pharmacies on Medicaid enrollment and compliance, pharmacy transactions, PBM contracting and disputes, credentialing, and network access. We are actively monitoring the New York Medicaid enrollment moratorium and its implications for pharmacy operations, PBM contracting, and Medicaid Managed Care participation. If your pharmacy is navigating a transaction, facing a credentialing issue, or concerned about how the moratorium may affect your Medicaid enrollment or PBM network status, contact our team.
Senior Counsel
Senior Counsel
