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Community Health Groups Oppose Medicaid 'Carve-Out'

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Community health groups across New York are warning about a change to the state’s Medicaid program.

More than 35 community health groups have joined the Save New York’s Safety Net coalition. The movement is targeting a drug “carve-out” and resulting changes to the 340B drug discount program they say will decimate essential services for the medically underserved and low-income New Yorkers.

Perry Junjulas is Executive Director of the Albany Damien Center, which serves people living with HIV and AIDS.

"This is actually a federal program that has allowed agencies like the Albany Damien Center and other community based organizations and federally qualified health centers, to be able to purchase drugs at cost, and be able to use some of the savings that is captured through the resale of those medications, to provide services to persons who are the most vulnerable in our community. New York state, in an effort to balance the budget, and also get some more money into Medicaid, has instituted a change in April, that will effectively take all of these savings away from the agencies who need them the most. There are about two dozen groups across the state where this Medicaid drug carve-out will become a catastrophic effect for, because this is about a quarter to 30% of our agency's budgets."

State officials expect to realize a savings of $87 million, but the groups claim uninsured patients would no longer be eligible to receive their medications, and in some cases meals and transportation to doctor appointments. Junjulas says the cuts would hurt the Damien Center.

" We have some incredible medications that can help. This change is going to really put those medications out of reach for far too many people. And it's going to disproportionately affect our Black and brown communities at a time when systemic change is being demanded by all of us to have more equity and health systems.”

Rose Duhan is the CEO of the Community Health Care Association of New York State.

Depending on timing, she fears the carve-out could impact distribution of a COVID-19 vaccine.

"Health centers are going to be a really critical player in distributing the vaccine to communities that have been most adversely impacted by COVID-19. To distributing vaccine to people of color, to immigrants, and, you know, in communities where there is frankly a distrust, and a lot of concern about the vaccine. And so because you may help them, those are trusted, and known providers in their communities. They're going to really play a critical role in doing outreach to talk with their communities to make sure communities understand why the vaccine is important and safe, and making sure people come in to get the vaccine and then to provide that to distribute the vaccine widely, to administer the vaccine. And especially if we're talking about two doses being required."

The New York State Department of Health's Jonah Bruno responded to a request for comment via email:

“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. In the upcoming fiscal year, we will allocate more than $100 million in savings achieved through the carve-out directly to 340B providers. Additionally, 340B entities will still be able to purchase medications at reduced 340B prices.”

Bruno noted that DOH has convened a 340B advisory group, to determine how the state should distribute the funding directly to 340B entities. He says the workgroup has met three times so far and a fourth meeting will be scheduled.

Dave Lucas is WAMC’s Capital Region Bureau Chief. Born and raised in Albany, he’s been involved in nearly every aspect of local radio since 1981. Before joining WAMC, Dave was a reporter and anchor at WGY in Schenectady. Prior to that he hosted talk shows on WYJB and WROW, including the 1999 series of overnight radio broadcasts tracking the JonBenet Ramsey murder case with a cast of callers and characters from all over the world via the internet. In 2012, Dave received a Communicator Award of Distinction for his WAMC news story "Fail: The NYS Flood Panel," which explores whether the damage from Hurricane Irene and Tropical Storm Lee could have been prevented or at least curbed. Dave began his radio career as a “morning personality” at WABY in Albany.
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