Bill > A3125

Introduced Session

This bill requires prescription drug services covered under the Medicaid program to be provided via fee-for-service delivery system. Currently, the majority of prescription drug services are provided through managed care delivery system. Specifically, the bill requires that the reimbursement for covered outpatient brand name and generic drugs, as well as covered outpatient specialty drugs dispensed by a mail order pharmacy, is calculated based on the lower of: (1) the National Average Drug Acquisition Cost (NADAC) Retail Price Survey, in accordance with section 1927(f) of the federal Social Security Act or the Wholesale Acquisition Cost in the absence of a NADAC price, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; (2) the federal upper limit, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; (3) the State Maximum Allowable Cost, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; (4) the State submitted ingredient cost, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; or (5) the provider's usual and customary charge, including any discount price which may be in effect on the date the drug is dispensed to the Medicaid beneficiary. Furthermore, the bill requires that the reimbursement for covered outpatient drugs dispensed by a covered entity as defined in section 340B(a)(4) of the federal Public Health Service Act is be calculated based on the lower of: (1) the Actual Acquisition Cost, which shall not exceed the federal 340B program ceiling price, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; (2) the federal upper limit, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; (3) the State Maximum Allowable Cost, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; (4) the State submitted ingredient cost, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92; or (5) the provider's usual and customary charge, including any discount price which may be in effect on the date the drug is dispensed to the Medicaid beneficiary. And finally, the bill requires that the reimbursement for covered clotting factors dispensed by a specialty pharmacy or a Hemophilia Treatment Center is based on the NADAC Retail Price Survey, in accordance with section 1927(f) of the federal Social Security Act or the Wholesale Acquisition Cost in the absence of a NADAC price, plus the State professional dispensing fee, as defined at 42 CFR 447.502, of $10.92. Under the bill, clotting factors are required to be billed through a Point of Sale System as of January 1, 2020. The transition is expected to generate significant State prescription drug savings, to increase access and savings to prescription drugs for Medicaid patients, and to create a fairer system for pharmacy providers, as demonstrated by other states implementing similar policies. For example, in March 2019, the West Virginia Bureau for Medical Services released a report showing savings of $54.4 million to the state Medicaid program due to the carve out of the prescription drug benefit from Medicaid managed care. The report also notes that in addition to the savings, the program resulted in $122 million paid to West Virginia pharmacies in the form of fixed dispensing fees, money that had formerly gone to out-of-state pharmacy benefit managers. Moreover, on April 1, 2023 New York shifted the Medicaid prescription drug benefit from managed care to a fee-for-service Medicaid Pharmacy Program. According to the New York Executive, this program is anticipated to generate a net state savings of $40.0 million in the first year of implementation, and $180.0 million in subsequent years.

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Craig Coughlin (D)*, 

Introduced, Referred to Assembly Aging and Human Services Committee (on 01/09/2024)

Official Document