Relates to the collection of prescription drug co-payments

1 Co-sponsor

• William J. Larkin Jr.

BILL NUMBER:S4749

Title of bill

An act to amend the social services law, in relation to the collection of prescription drug co-payments

Purpose

To require patients to pay co-payments for prescription drugs at the point-of-sale under Medicaid and Family Health Plus

Summary of provisions

Section 1- Amends section 367 -a of the Social Services law to require the payment of prescription drug co-payments under Medicaid. Section 2- Amends section 369-ee of the Social Services law to require the payment of prescription drug co-payments under Family Health Plus. Section 3- Effective date.

Justification

Co-payments for prescription drugs in the State Medicaid program were implemented in New York State in 1995. Prescription drug co-payments were also included when the Family Health Plus program was created. It is the current policy that Medicaid and Family Health Plus beneficiaries cannot be denied services if they refuse to pay their co-payments at the point-of-sale. As a result, pharmacies in the State of New York have experienced serious financial losses through the inability to collect the co-payments of $1 for generics and $3 for brand name drugs under Medicaid and $3 for generics and $6 for brand name drugs under Family Health Plus. Survey data has found that the statewide average of uncollectible co-payments is 50%, and the rate is even higher in New York City with some pharmacies experiencing uncollectible co-payments of 90%.

Unlike other providers which receive funding from bad debt and charity pools, pharmacies cannot write off their bad debt and do not receive state assistance to make up for these losses. Uncollectible co-payments come directly out of the pockets of community pharmacies. Pharmacies have also recently experienced significant reductions in reimbursement under Medicaid and Family Health and are currently are paid one of the lowest rates in the country. This hardship is exacerbated by the losses incurred through uncollectible co-payments in these programs. This situation is inequitable and also jeopardizes access to pharmacy services for all New Yorkers.

Recently, the pharmacy benefit under Medicaid and Family Health Plus was changed and will now be administered by private managed care plans for the majority of beneficiaries. However, the co-payments remain the same as does the policy regarding pharmacy collection. This means that pharmacies will continue to lose on average 50% of co-payments for the prescription drugs filled for approximately four million New Yorkers.

This inequity would be addressed through this legislation by requiring Medicaid and Family Health Plus beneficiaries to pay their

co-payments to pharmacies at the point-of-sale when filling their prescriptions.

Legislative history

New bill.

Fiscal implications

None.

Effective date

This act shall take effect one hundred and eighty days after it shall become law.