APCI to NY Governor: Medicaid Costs ’Drastically Overestimated’

Author: APCI Staff/Tuesday, April 5, 2022/Categories: APCI News

A study that claims Medicaid payment parity in the New York state budget would come with a $1 billion price tag in the first year is “drastically overestimated,” according to a letter sent today to N.Y. Gov. Kathy Hochul from APCI.

“Contrary to representations that Medicaid fee for service parity would cost upwards of $1 billion dollars in the first year, an analysis of public data reflects an approximate cost of $372,982,811 for the year,” the letter states. “[E]stimates of those increased costs (for payment parity) appear to be drastically overestimated,” assuming that the study does not take into account NADAC-based drug pricing as opposed to “PBM trade-secreted methodologies.”

The New York study, conducted by the state’s Medicaid actuary, has not been made public. The letter also urges Gov. Hochul to release the study so that its estimations can be analyzed.

“That the state of New York is relying on a report that has not been made publicly available” to determine whether to include provisions for payment parity and prescription drug pricing transparency in the budget, “is painfully ironic,” the letter states.

The letter from the co-op is part of an effort to urge inclusion of Medicaid managed care prescription drug payment parity with Medicaid fee for service in the state budget. These provisions would, amongst other things, require Medicaid managed care companies to reimburse community pharmacies at NADAC plus a $10.08 dispensing fee.

“New York’s community pharmacists have been there for their patients and for the state of New York and they deserve no less than Medicaid parity to help keep their doors open.  The projection of a $1 billion price tag runs contrary to the publicly available data and APCI, on behalf of its members and community pharmacies across New York, has provided the math to back up our position,” said Greg Reybold, APCI’s Director of Healthcare Policy and General Counsel.

The full letter is available here.