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Prescription drug change in NY won’t impact Medicaid, officials say

New York health officials have implemented a significant change in the delivery of prescription drugs for the state’s Medicaid program, aiming to save taxpayers hundreds of millions of dollars while addressing criticisms of the current system. However, some providers are already reporting issues with the new approach.

This month, the state Department of Health eliminated a middleman in the Medicaid prescription drug distribution process. New York State Medicaid Director Amir Bassiri stated that the change should not affect patients relying on the program for access to medications for illnesses such as HIV/AIDS and hepatitis C.

The reform has been in development since 2019 and is designed to prevent third-party intermediaries from profiting from Medicaid prescription drugs sold to healthcare providers. The change is projected to save $410 million in state funds this fiscal year and $547 million the following year.

Bassiri explained that health officials intend to redirect the savings directly to healthcare providers across the state. Millions of additional dollars, including $30 million for HIV/AIDS service providers, will be distributed. The state is also allocating $250 million in state and federal Medicaid funds to Federally Qualified Health Centers and $425 million in state and federal funding to hospitals.

However, some providers have expressed skepticism and are pushing for the prescription drug change to be postponed during ongoing state budget negotiations. Mike Lee of Evergreen Health in Western New York, for example, expressed concerns that the change could result in lower reimbursement rates for providers, negatively affecting their ability to offer services such as transportation and food.