BILL NUMBER: S3509
SPONSOR: SKOUFIS
 
TITLE OF BILL:
An act to amend the social services law and the public health law, in
relation to protecting access to pharmacy services
 
PURPOSE:
To address unfair and unsustainable practices by managed care providers
and pharmacy benefit managers (PBMs) to protect patient access to essen-
tial pharmacy care and services.
 
SUMMARY OF PROVISIONS:
Section 1: Amends social services law to reduce the administrative fees
currently paid by the State Health Department to managed care providers
and PBMs under the Medicaid pharmacy benefit to be used to more appro-
priately pay retail pharmacies in line with the state Fee for Service
pharmacy program based on pharmacy ingredient costs and dispensing fees
determined by the State Health Department and national survey data by
the federal Centers for Medicaid and Medicare Services. This section
also requires managed care providers and PBMs to allow any willing phar-
macy provider into their Medicaid pharmacy networks to ensure access for
patients. These provisions will not impact 340B entities or HIV Special
Needs Plans.
Section 2: Amends public health law to prevent PBMs, health plans and
other insurers from limiting patient choice in how they choose to
receive their needed medications from local pharmacies.
Section 3: Sets effective date.
 
JUSTIFICATION:
The SFY 2022 Final State Budget delayed the planned carve out of the
pharmacy benefit from Medicaid Managed Care to Fee for Service two years
to April 1, 2023. This delay allows managed care plans and their PBMs to
continue to make significant profits off this program at the expense of
taxpayers, community pharmacies and patient care.
Even prior to this delay, community pharmacies, independent and chain,
have been struggling to remain open in areas with a high number of indi-
viduals enrolled in Medicaid due to the unfair and unsustainable, often
below cost, reimbursement paid to pharmacies by managed care providers
and PBMs as well as their restrictive networks and other self-serving
requirements which make it difficult for pharmacies to continue to serve
patients in their communities. Many pharmacies have closed and this will
continue unless immediate relief is provided now to address this untena-
ble situation for community pharmacies on behalf of those they serve.
This legislation would provide critical reforms and protections, shift-
ing the excessive administrative fees that managed care providers and
PBMs currently enjoy, to provide adequate payment to community pharma-
cies. Also, this bill would prevent restrictive networks enabling
patients enrolled in Medicaid to have the choice of and access to their
local pharmacies, and to have the option under any insurance plan to
receive medications via in-person or mail delivery from their local
pharmacies if they choose, rather than having to use out-of-state mail
order pharmacies dictated by PBMs to do so.
This bill ensures that limited Medicaid dollars are invested in patient
care, local communities and local businesses rather than further lining
PBM and health plan pockets.
 
LEGISLATIVE HISTORY:
Senate
2019-2020: S6825, Referred to Health
2021: S6603, Vetoed memo 63
2022: S7909, Committed to Finance
Assembly
2019-2020: No Assembly Same-As
2021: A7598, Vetoed memo 63
2022: A9165, Referred to Health
 
FISCAL IMPLICATIONS:
None, the bill requires a transfer of Medicaid funds from one entity to
another under Medicaid Managed Care without need for additional revenue
or appropriations.
 
EFFECTIVE DATE:
This act shall take effect on the thirtieth days after it shall become a
law; provided, however, that the amendments to subdivision 18 4 of
section 364-j of the social services law made by section one of 19 this
act shall take effect July 1, 2021; provided further that if this 20 act
shall have become a law after such date it shall take effect immediately
and shall be deemed to have been in full force and effect on and further
that the amendments to subdivision 23 social services law made by
section one of 24 this act shall not affect the repeal of such section
and shall be deemed 25 repealed therewith.

Statutes affected:
S3509: 364-j social services law, 364-j(4) social services law, 280-a public health law