S T A T E O F N E W Y O R K
________________________________________________________________________
3466
2023-2024 Regular Sessions
I N S E N A T E
January 31, 2023
___________
Introduced by Sen. RIVERA -- read twice and ordered printed, and when
printed to be committed to the Committee on Health
AN ACT to amend the social services law, in relation to prescription
drugs eligible for Medicaid coverage; to amend the public health law,
in relation to prior authorization under the preferred drug program;
to repeal certain provisions of part FFF of chapter 56 of the laws of
2020 directing the department of health to remove the pharmacy benefit
from the managed care benefit package, relating to restoring such
benefits; and to repeal certain provisions of the social services law,
relating to coverage for certain prescription drugs under Medicaid
managed care programs
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative findings. This legislature finds that the costs
of many prescription drugs in the market have been escalating unreason-
ably. The preferred drug program and the clinical drug review program
under the public health law provide effective mechanisms for assuring
access to quality, effective and safe drugs to patients at reasonable
cost. Providing prescription drugs to Medicaid managed health care
provider participants through these programs will maximize the Medicaid
program's ability to negotiate more substantial rebates with drug
manufacturers (effectively, lower prices), while protecting Medicaid
managed care provider participants.
§ 2. Sections 1 and 1-a of part FFF of chapter 56 of the laws of 2020,
relating to prescription drugs under the Medicaid program, are REPEALED.
§ 3. The social services law is amended by adding a new section 365-i
to read as follows:
§ 365-I. PRESCRIPTION DRUGS IN MEDICAID. 1. THE DEFINITIONS OF TERMS
IN SECTION TWO HUNDRED SEVENTY OF THE PUBLIC HEALTH LAW SHALL APPLY TO
THIS SECTION. AS USED IN THIS SECTION, UNLESS THE CONTEXT CLEARLY
REQUIRES OTHERWISE, "MANAGED CARE PROVIDER" MEANS A MANAGED CARE PROVID-
ER UNDER SECTION THREE HUNDRED SIXTY-FOUR-J OF THIS ARTICLE, OR A
MANAGED LONG TERM CARE PLAN UNDER SECTION FORTY-FOUR HUNDRED THREE-F OF
THE PUBLIC HEALTH LAW.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06159-01-3
S. 3466 2
2. PRESCRIPTION DRUGS ELIGIBLE FOR REIMBURSEMENT UNDER THIS ARTICLE
SHALL BE PROVIDED AND PAID FOR UNDER THE PREFERRED DRUG PROGRAM AND THE
CLINICAL DRUG REVIEW PROGRAM UNDER TITLE ONE OF ARTICLE TWO-A OF THE
PUBLIC HEALTH LAW, EXCEPT AS OTHERWISE PROVIDED IN SUBDIVISION THREE OF
THIS SECTION.
3. THIS SUBDIVISION APPLIES WHERE THE ELIGIBLE INDIVIDUAL IS ENROLLED
IN A MANAGED CARE PROVIDER AND A PRESCRIPTION FOR THE ELIGIBLE INDIVID-
UAL IS MADE UNDER SECTION 340B OF THE FEDERAL PUBLIC HEALTH SERVICE ACT
(THE "340B PROGRAM"). THE MANAGED CARE PROVIDER SHALL PAY FOR THE DRUGS
UNDER THE 340B PROGRAM. HOWEVER, THE PRESCRIPTION SHALL BE SUBJECT TO
SECTION TWO HUNDRED SEVENTY-THREE (PREFERRED DRUG PROGRAM PRIOR AUTHORI-
ZATION) AND SECTION TWO HUNDRED SEVENTY-FOUR (CLINICAL DRUG REVIEW
PROGRAM) OF THE PUBLIC HEALTH LAW.
4. THE MANAGED CARE PROVIDER SHALL ACCOUNT TO AND REIMBURSE THE
DEPARTMENT FOR THE NET COST TO THE DEPARTMENT FOR PRESCRIPTION DRUGS
PROVIDED TO ELIGIBLE INDIVIDUALS WHO RECEIVE MEDICAL SERVICES FROM THE
MANAGED CARE PROVIDER. CAPITATION PAYMENTS BY THE DEPARTMENT TO SUCH
MANAGED CARE PROVIDER SHALL INCLUDE A COMPONENT FOR REIMBURSEMENTS PAID
UNDER THIS SUBDIVISION.
§ 4. Paragraph (b) of subdivision 3 of section 273 of the public
health law, as added by section 10 of part C of chapter 58 of the laws
of 2005, is amended to read as follows:
(b) In the event that the patient does not meet the criteria in para-
graph (a) of this subdivision, the prescriber may provide additional
information to the program to justify the use of a prescription drug
that is not on the preferred drug list. The program shall provide a
reasonable opportunity for a prescriber to reasonably present his or her
justification of prior authorization. If, after consultation with the
program, the prescriber, in his or her reasonable professional judgment,
determines that the use of a prescription drug that is not on the
preferred drug list is warranted, the prescriber's determination shall
be final. HOWEVER, THE PRESCRIBER'S DETERMINATION SHALL NOT BE FINAL:
(I) WHERE THE PREFERRED DRUG IS A GENERIC DRUG SUBJECT TO SUBPARAGRAPH
(I) OF PARAGRAPH (A-1) OF SUBDIVISION FOUR OF SECTION THREE HUNDRED
SIXTY-FIVE-A OF THE SOCIAL SERVICES LAW (MANDATORY GENERIC SUBSTI-
TUTION), AND EVEN IF THE PRESCRIBER HAS INDICATED THAT THE PRESCRIPTION
SHALL BE DISPENSED AS WRITTEN; OR (II) IF IT IS FOR THE USE OF A DRUG
THAT IS NOT CONSISTENT WITH FOOD AND DRUG ADMINISTRATION-APPROVED LABEL-
ING OR SUPPORTED BY ONE OR MORE OFFICIAL COMPENDIA REFERENCES, INCLUD-
ING, BUT NOT LIMITED TO, THE AMERICAN HOSPITAL FORMULARY SERVICE (AHFS),
THE DRUGDEX DRUG INFORMATION SYSTEM AND THE UNITED STATES PHARMACOPEIA.
§ 5. Subdivisions 25, 25-a, 26 and 26-b, and paragraph (u) of subdivi-
sion 4 of section 364-j of the social services law are REPEALED.
§ 6. Severability. If any provision of this act, or any application of
any provision of this act, is held to be invalid, or to violate or be
inconsistent with any federal law or regulation, that shall not affect
the validity or effectiveness of any other provision of this act, or of
any other application of any provision of this act, which can be given
effect without that provision or application; and to that end, the
provisions and applications of this act are severable.
§ 7. This act shall take effect immediately, except that sections one
through five of this act shall take effect on the one hundred eightieth
day after they shall have become a law. Effective immediately, the
commissioner of health shall make regulations and take other actions
reasonably necessary to implement this act when it takes effect.