Take Action to Reverse the Medicaid Pharmacy Carve Out!
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Community health groups across New York today are launching a coalition aimed at urging the state to reverse the Medicaid drug carve-out and resulting changes to the 340B drug discount program.
The coalition—called Save New York’s Safety Net: 340B Saves Lives—says that carving the Medicaid pharmacy benefit out of managed care and adding it into a fee-for-service model will decimate essential services for those most in need. Though the state’s plan—scheduled to take effect April 1—is intended to save Medicaid money, the group is steadfast in its belief that it will cause widespread and disastrous health consequences and actually cost the state large sums of money instead.
The 340B program allows safety-net providers, including community health centers and hospitals, to purchase deeply discounted drugs and use the savings to provide essential services for low-income New Yorkers.
“This is not about one organization and its particular issues and survival,” said Wendy Stark, executive director of Callen-Lorde, which operates health centers in Manhattan, the Bronx and Brooklyn, and specializes in LGBTQ heath care. “This is about access to health care for the most vulnerable communities across the state.”
For Callen-Lorde, the negative impact would equate to about $12 million, or about 14% of its overall budget.
“We are starting to plan for that now,” Stark said. “That planning is devastating.”
She said the loss of 340B revenues will affect patients and staff should the carve-out not be reversed.
Stark shared the story of one of Callen-Lorde’s nurses and a patient whose health was deteriorating before care was sought at the organization. The patient was a Black, transgender woman with substance-use issues who was also living with HIV. She was living in a shelter and did not have a health care provider because she had been treated poorly when attempting to access care in the past.
The nurse was able to have the patient diagnosed with a staph infection and treated the same day, get her blood drawn, establish an HIV medication regimen and enroll her in health coverage as well as ongoing primary care, mental health care and substance-use services. Her HIV is now undetectable, and she is living in supportive housing.
Stark quotes the nurse as saying, “The patient is now healthy, thriving and living her best life.” The nurse’s salary is paid for by 340B dollars.
Perry Junjulas, executive director at Albany Damien Center, which provides behavioral health, housing, meals, employment, pharmacy and other services to people living with HIV/AIDS, concurred that the need for 340B revenues is critical.
“If allowed to go forward, we’re going to see a number of people going hungry again, homeless and not able to access the medications they need,” Junjulas said.
He said he is fearful the outcome could mirror the early days of the HIV/AIDS epidemic, when treatment wasn’t available.
“Some people are not going to have access to medication that we actually have this time,” he said.
The issue will predominately affect Black and brown communities, he said. The financial impact to the Damien Center is some $1.4 million, or about 25% of its annual operating budget.
Rose Duhan, president and CEO of the Community Health Care Association of New York State, noted that the loss of 340B revenues couldn’t come at worse time because of the pandemic.
Community health centers are more critical than ever, in part because of their work to address all the factors that affect an individual’s health, Duhan said.
Though some directors of community health centers were included in a state advisory council to determine ways to mitigate the impact of the carve-out on 340B dollars, more than a handful recently stepped away from the process.
“While we understand the agreement called for recommendations by Oct. 1, we believe the process is in need of further deliberations and a more concerted effort to explore alternative solutions to achieve savings without severely disrupting safety-net providers’ ability to render quality and appropriate care,” they wrote in a letter to the state. “As it stands today, the majority of this advisory council simply cannot support a recommendation on how to mitigate the harm caused by this policy decision.”
Jonah Bruno, director of public information at the state Department of Health, said in a statement: “The Medicaid Redesign Team II proposal to move the Medicaid pharmacy program from managed care plans saves taxpayers millions of dollars by increasing transparency, ensuring Medicaid pays the best price for medications, and eliminating unnecessary administrative costs to health plans, all while ensuring that consumers continue to have access to needed medications.”
But members of the coalition simply don’t agree.
“We need to have this carve-out reversed and reversed in total right now,” Junjulas said. “We’re going to be asking the poorest people to pay the highest price.” —Jennifer Henderson
By Shannon Young
10/20/2020 11:48 AM EDT
A newly-formed coalition of community health groups is urging Albany lawmakers to reverse the Medicaid drug carve-out included in the state budget, arguing that changes to the 340B drug discount program could “decimate essential services for the poorest New Yorkers.”
Impact: Save New York’s Safety Net seeks to repeal the Medicaid Redesign Team II-backed carve-out, which is set to take effect on April 1, 2021. The coalition contends the policy will devastate 340B drug discount program providers who rely on the program’s savings to support other essential services they offer to New Yorkers.
What they said: Peter Grisafi, president and CEO of Damian Family Care Centers, which is part of the coalition, said if the pharmacy carve-out takes effect as scheduled, his organization would “no longer be able to provide free medications to uninsured and underinsured individuals.”
Housing Works President Matthew Bernardo, another coalition member, said changes to the 340B benefit “would limit client access to lifesaving services and force Housing Works to close sites and eliminate key outreach and retention programs.”
The Cuomo administration has stood by the policy. Department of Health spokesperson Jonah Bruno told POLITICO earlier this month that the “proposal to move the Medicaid pharmacy program from managed care plans saves taxpayers millions of dollars by increasing transparency, ensuring Medicaid pays the best price for medications, and eliminating unnecessary administrative costs to health plans, all while ensuring that consumers continue to have access to needed medications.”
Details: Other coalition members include: Trillium, RWC-340B, iHealth, Harlem United, GMHC, Evergreen Health Services, CHCANYS, Callen-Lorde Community Health Center, Alliance for Positive Change, Albany Damien Center and AIDS Healthcare Foundation.
Background: The MRT II, which was reconvened to identify cost-savings and efficiencies in the state’s Medicaid program, recommended the pharmacy benefit carve-out from Medicaid managed care to fee-for-service as part of a series of proposals presented to state lawmakers as they finalized the state budget last spring. The MRT II projected the policy would save the state $125 million in FY 2022.
But a recent Menges Group report, prepared for the New York Health Plan Association and Coalition of New York State Public Health Plans, suggested the pharmacy carve-out could cost New York $1.5 billion over five years. State health officials have questioned those findings.