NY State Senate Bill 2023-S5136

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to health
Feb 23, 2023	referred to health

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2023-S5136 (ACTIVE) - Details

See Assembly Version of this Bill:: A5911
Current Committee:: Senate Health
Law Section:: Social Services Law
Laws Affected:: Rpld Part FFF §§1 & 1-a, Chap 56 of 2020; amd §364-j, Soc Serv L; amd §280-a, Pub Health L

2023-S5136 (ACTIVE) - Summary

Relates to pharmacy services provided by managed care providers; requires pharmacy benefit managers and managed care providers to reimburse retail pharmacies for each outpatient drug, at the National Average Drug Acquisition Cost (NADAC); repeals related provisions.

2023-S5136 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5136

SPONSOR: RIVERA
 
TITLE OF BILL:

An act to amend the social services law and the public health law, in
relation to pharmacy services provided by managed care providers and to
repeal sections 1 and 1-a of part FFF of chapter 56 of the laws of 2020
relating to directing the department of health to remove the pharmacy
benefit from the managed care benefit package and to provide the pharma-
cy benefit under the fee for service program, in relation thereto

 
PURPOSE OR GENERAL IDEA OF BILL:

The purpose of this bill is to repeal the transition of the Medicaid
pharmacy benefit from managed care to fee-for-service, which would cause
unintentional harm to certain providers participating in the federal
340B program, while still maintaining protections for pharmacy oper-
ations and reducing administrative costs associated with the 340B
program.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill would repeal Sections 1 and 1-a of part FFF of
chapter 56 of the laws of 2020 that authorizes the Department of Health
(DOH) to transition the pharmacy benefit from managed care into fee-for-
service.

Section 2 of the bill requires all managed care providers and pharmacy
benefit managers to use the feefor-service preferred drug list in devel-
oping their formulary. All managed care organizations and pharmacy bene-
fit managers would be required to reimburse retail pharmacies and 340B
covered entity providers for each drug at the National Average Drug
Acquisition Cost (NADAC) plus a tiered volume-based dispensing fee to be
determined by DOH. If a specific drug does not have a NADAC rate, then
feefor-service reimbursement methodologies would be used. The bill
requires the dispensing fee set by the Commissioner of DOH to be an
amount of at least $8.50, but would allow for it to be increased above
this amount for smaller pharmacies dispensing lower volumes that may be
subject to higher operational costs. Managed care providers would be
prohibited from denying retail pharmacies the opportunity to participate
in their network under Medicaid under certain conditions. Contract phar-
macies performing services under the 340B program would be reimbursed
under a fee schedule that is based on fair market principles and cannot
be a percentage of a claim's total reimbursement or net margin.

Section 3 would prohibit pharmacy benefit managers from limiting an
individual's choice to receive their medication form their local, non-
mail order pharmacy of choice.

Section 4 is the effective date.

 
JUSTIFICATION:

The SFY 2020-21 final adopted budget included a provision that transi-
tions the Medicaid pharmacy benefit from managed care to the fee-for-
service program. While the implementation of the transition was delayed
for two years in the SFY 2021-22 budget, the transition is now set to go
forward on April 1, 2023.  The transition eliminates the ability of
safety-net providers to utilize savings from the federal 340B program,
as that program can only operate under managed care and not fee-for-ser-
vice. The 340B drug rebate program provides funding to safety-net
providers that is used to expand healthcare services and other programs
for vulnerable, high-need populations. Some estimates show that safety-
net providers will lose hundreds of millions of dollars from lost 340B
funding.

This bill maintains the pharmacy benefit within managed care, which
preserves the 340B drug rebate mechanism. Instead, a single Preferred
Drug List (PDL) would be created that would require uniform utilization
review management protocols, enhance the State's negotiating power for
drug rebates, and provide greater transparency in the program. The bill
will also end restrictive and anti-competitive pharmacy benefit manager
(PBM) practices by protecting pharmacy networks, limiting fees that
PBM's and other third-party middlemen siphon from the program, and phar-
macists will receive a fair and transparent dispensing fee.

This bill achieves many of the same goals of the original carveout, but
with much less disruption to important safety-net providers across the
state.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

Undetermined, but potential savings to the Medicaid program from effi-
ciencies in the single formulary.

 
EFFECTIVE DATE:
This act shall take effect immediately; except that sections two and
three shall take effect April 1, 2023.

2023-S5136 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5136
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 23, 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 and the public  health  law,  in
   relation  to  pharmacy services provided by managed care providers and
   to  repeal sections 1 and 1-a of part FFF of chapter 56 of the laws of
   2020 relating to directing the department  of  health  to  remove  the
   pharmacy  benefit from the managed care benefit package and to provide
   the pharmacy benefit under the fee for service  program,  in  relation
   thereto
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Sections 1 and 1-a of part FFF of chapter 56 of the laws of
 2020 relating to directing the department of health to remove the  phar-
 macy  benefit  from  the managed care benefit package and to provide the
 pharmacy benefit under the fee for service program, are REPEALED.
   § 2. Subdivision 4 of section 364-j of  the  social  services  law  is
 amended  by adding four new paragraphs (x), (y), (z) and (aa) to read as
 follows:
   (X) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, MANAGED CARE
 PROVIDERS UNDER THE MEDICAL ASSISTANCE PROGRAM AND ANY PHARMACY  BENEFIT
 MANAGERS  ACTING  ON  THEIR  BEHALF,  AS  DEFINED IN SECTION TWO HUNDRED
 EIGHTY-A OF THE PUBLIC HEALTH LAW, SHALL BE REQUIRED TO REIMBURSE RETAIL
 PHARMACIES FOR EACH OUTPATIENT DRUG, AT THE NATIONAL AVERAGE DRUG ACQUI-
 SITION COST (NADAC), OR IF NADAC PRICING  IS  UNAVAILABLE  FOR  A  DRUG,
 REIMBURSEMENT SHALL BE PURSUANT TO THE CURRENT BENCHMARKS UNDER FEE-FOR-
 SERVICE, PLUS A TIERED PROFESSIONAL DISPENSING FEE BASED ON PRESCRIPTION
 CLAIMS  VOLUME  TO  BE DETERMINED BY THE COMMISSIONER.  IN DETERMINING A
 PROFESSIONAL DISPENSING FEE, THE COMMISSIONER SHALL ISSUE A SURVEY  THAT
 COLLECTS  CLAIMS VOLUMES FROM ENROLLED PHARMACIES, AND OTHER SUCH INFOR-
 MATION AS THE COMMISSIONER MAY DEEM NECESSARY TO  WEIGH  REGIONAL  VARI-
 ANCES  AND OTHER FACTORS SIGNIFICANTLY IMPACTING MARKETS FROM THE PREVI-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09373-03-3

 S. 5136                             2
 
 OUS TWELVE-MONTH PERIOD, TO DETERMINE  THE  APPROPRIATE  DISPENSING  FEE
 REIMBURSEMENT.   THE DISPENSING FEE DETERMINED BY THE COMMISSIONER SHALL
 BE IN AN AMOUNT OF AT LEAST EIGHT DOLLARS AND FIFTY CENTS.
   (Y)  (I)  NOTWITHSTANDING  ANY  PROVISION  OF  LAW  TO THE CONTRARY, A
 MANAGED CARE PROVIDER OR PHARMACY BENEFIT MANAGER ACTING ON ITS  BEHALF,
 SHALL  NOT  DENY  ANY  RETAIL PHARMACY THE OPPORTUNITY TO PARTICIPATE IN
 ANOTHER  PROVIDER'S  PHARMACY  NETWORK  UNDER  THE  MEDICAL   ASSISTANCE
 PROGRAM, PROVIDED THAT:
   (A) SUCH RETAIL PHARMACY AGREES TO THE SAME REIMBURSEMENT AMOUNT;
   (B)  IS ABLE TO FILL AND DISPENSE COMMONLY DISPENSED PRESCRIPTIONS AND
 OVER-THE-COUNTER MEDICATIONS IN A MANNER CONSISTENT WITH MEDICAL ASSIST-
 ANCE PROGRAM GUIDANCE AND STATUTE FOR THOSE PATIENTS AND POPULATION  THE
 PHARMACY SERVES ENROLLED IN THE MEDICAL ASSISTANCE PROGRAM;
   (II)  NOTHING  IN THIS PARAGRAPH SHALL REQUIRE A MANAGED CARE PROVIDER
 OR PHARMACY BENEFIT MANAGER TO CONTRACT WITH A RETAIL PHARMACY OR  PHAR-
 MACIES  THAT FAIL TO MEET UNIVERSALLY ACCEPTED PROFESSIONAL STANDARDS OF
 PHARMACY PRACTICE. FURTHER, NOTHING IN THIS PARAGRAPH SHALL BE CONSTRUED
 AS LIMITING THE ABILITY OF MANAGED CARE PROVIDERS  OR  PHARMACY  BENEFIT
 MANAGERS  TO  REMOVE  PHARMACIES  FROM  THEIR  NETWORK, OR TO DECLINE TO
 CONTRACT WITH PHARMACIES IN CASES OF FRAUD, WASTE, ABUSE, OR  AS  OTHER-
 WISE AUTHORIZED BY LAW.
   (Z)  (I) A MANAGED CARE PROVIDER OR PHARMACY BENEFIT MANAGER ACTING ON
 ITS BEHALF SHALL BE REQUIRED TO REIMBURSE 340B COVERED ENTITY PROVIDERS,
 WHETHER DIRECTLY OR THROUGH ARRANGEMENTS WITH THEIR CONTRACTUAL  PHARMA-
 CIES,  FOR  OUTPATIENT DRUGS DISPENSED UNDER SECTION 340B OF THE FEDERAL
 PUBLIC HEALTH SERVICE ACT (42 USCA § 256B), AT NADAC, OR IF NADAC  PRIC-
 ING  IS  UNAVAILABLE  FOR A DRUG, REIMBURSEMENT SHALL BE PURSUANT TO THE
 CURRENT BENCHMARKS UNDER FEE-FOR-SERVICE, PLUS A PROFESSIONAL DISPENSING
 FEE AS DETERMINED BY THE COMMISSIONER PURSUANT TO PARAGRAPH (X) OF  THIS
 SUBDIVISION.
   (II)  NOTWITHSTANDING  ANY  PROVISION OF LAW TO THE CONTRARY, RATES OF
 PAYMENT BETWEEN COVERED ENTITIES UNDER SECTION 340B OF THE PUBLIC HEALTH
 SERVICE ACT AND CONTRACT PHARMACIES THAT OBTAIN AND DISPENSE 340B  DRUGS
 ON BEHALF OF THE COVERED ENTITY, SHALL COMPRISE A FEE SCHEDULE, BASED ON
 FAIR MARKET VALUE PRINCIPLES AND SHALL NOT BE A PERCENTAGE OF EITHER THE
 CLAIM'S TOTAL REIMBURSEMENT OR NET MARGIN. THE COMMISSIONER SHALL EVALU-
 ATE THE ADEQUACY OF SUCH FEE SCHEDULE NO LESS THAN EVERY TWO YEARS.
   (AA) NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY, IN ORDER TO
 ALIGN  MANAGED  CARE  PROVIDER DRUG FORMULARIES TO REDUCE COMPLEXITY FOR
 BENEFICIARIES OF MEDICAL ASSISTANCE, AND TO MAXIMIZE  AVAILABLE  FEDERAL
 STATUTORY  DRUG  REBATES  FOR  THE STATE, MANAGED CARE PROVIDERS AND ANY
 PHARMACY BENEFIT MANAGERS ACTING ON THEIR BEHALF, SHALL BE  REQUIRED  TO
 USE  THE FEE-FOR-SERVICE PREFERRED DRUG LIST WHEN DEVELOPING A FORMULARY
 OR PREFERRED DRUG LIST OF OUTPATIENTS DRUGS FOR BENEFICIARIES OF MEDICAL
 ASSISTANCE. IN THE INTERESTS OF THE CREATION OF A HIGH  QUALITY  UNIFORM
 FORMULARY, AND NOTWITHSTANDING ANY PROVISION OF LAW TO THE CONTRARY: THE
 COMMISSIONER  SHALL CONVENE A COMMITTEE COMPRISED OF THE PHARMACY DIREC-
 TORS OF THE STATE'S CURRENTLY PARTICIPATING MANAGED  CARE  PROVIDERS  TO
 ADVISE  IN  THE  CREATION  AND  STEWARDSHIP  OF  ANY  SUCH  FORMULARY OR
 PREFERRED DRUG LIST.
   § 3. Section 280-a of the public health law is amended by adding a new
 subdivision 6 to read as follows:
   6. MEDICAL ASSISTANCE DELIVERY OPTION. NOTWITHSTANDING  ANY  PROVISION
 OF  LAW  TO  THE  CONTRARY,  NO PHARMACY BENEFIT MANAGER SHALL LIMIT THE
 OPTION FOR AN INDIVIDUAL EXERCISING THEIR  BENEFITS  UNDER  THE  STATE'S
 MEDICAL  ASSISTANCE  PROGRAM  RECEIVING PRESCRIPTION OR OVER-THE-COUNTER
 S. 5136                             3
 
 MEDICATIONS TO RECEIVE SUCH MEDICATIONS FROM THEIR LOCAL, NON-MAIL ORDER
 PHARMACY OF CHOICE VIA DELIVERY  INCLUDING  IN-PERSON  DELIVERY,  UNITED
 STATES POSTAL SERVICE OR OTHER MAIL OR COURIER SERVICE. NO RESTRICTIONS,
 PROHIBITIONS,  OR PRIOR AUTHORIZATION REQUIREMENTS SHALL BE BASED ON THE
 INDIVIDUAL'S CHOICE IN DELIVERY TYPE OR DISTANCE FROM A PHARMACY.
   § 4. This act shall take effect immediately; provided,  however,  that
 sections  two and three of this act shall be deemed to have been in full
 force and effect on and after April 1, 2023.

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Senate Bill S5136

Sponsored By

Archive: Last Bill Status - In Senate Committee Health Committee

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co-Sponsors

2023-S5136 (ACTIVE) - Details

2023-S5136 (ACTIVE) - Summary

2023-S5136 (ACTIVE) - Sponsor Memo

2023-S5136 (ACTIVE) - Bill Text download pdf

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Archive: Last Bill Status - In Senate Committee Health Committee

Actions

co-Sponsors

2023-S5136 (ACTIVE) - Details

2023-S5136 (ACTIVE) - Summary

2023-S5136 (ACTIVE) - Sponsor Memo

2023-S5136 (ACTIVE) - Bill Text download pdf

Comments