GMHC Statement on Proposed New York State Medicaid Carve-Out Plan

GMHC joins with the End AIDS NY 2020 Community Coalition, Save NY’s Safety Net, and the Community Healthcare Association of New York State (CHCANYS) in opposing the proposed New York State Medicaid Carve-Out Plan that will strip away an estimated $250 million in 340B prescription drug program savings that community-based organizations rely on to provide critical HIV/AIDS and other healthcare services. At a time when community-based healthcare providers have already lost $212 million in funding this year due to the impact of COVID-19, the Medicaid Carve-Out Plan will further devastate low-income communities of color most affected by the pandemic and reverse the significant progress that has been made in meeting the goals of the State’s Plan to End the HIV Epidemic.

GMHC was pleased to provide a quote for Gov. Cuomo’s World AIDS Day statement last week remembering those we have lost and praising the collaborative efforts of government and community to advance EtE efforts. However, we were dismayed to see it included in a press release that justified the Medicaid Carve-Out Plan that will devastate the State’s healthcare safety net. GMHC does not support the governor’s Medicaid Carve-Out Plan.

New York’s fiscal year 2021 budget must not be balanced on the backs of the low-income black and brown New Yorkers now disproportionately affected by both the HIV/AIDS and COVID-19 pandemics. Slashing 340B program savings will result in the closure of more than 30 community health centers across the state, the lay-off of hundreds of staff, and the loss of millions in funding for HIV/AIDS services in low-income, medically underserved communities. At a time when the federal government has failed to provide adequate resources to fight COVID-19, the Medicaid Carve-Out Plan will compound the devastating effects of the pandemic on marginalized communities by preventing “safety-net” providers that participate in the 340B program from realizing critical savings they need to care for New York’s most vulnerable communities.

The 340B program is a federal drug discount program that allows safety-net community-based health care providers to purchase prescription medications from drug manufacturers at significantly reduced prices. The program enables these safety-net providers to realize savings when they are reimbursed by Medicaid managed care programs, which then, by law, must be reinvested back into health services to fill gaps in care. The savings also support critical services that are otherwise unfunded or underfunded, including healthcare for uninsured persons, and “wrap-around support services” required to address social determinants that present barriers to care. These support services include food pantries, transportation, care coordination, and mental health and substance use services. Safety-net providers included in the 340B program primarily serve uninsured or underinsured people living with or at risk of HIV/AIDS—offering HIV prevention and care services that cannot be billed to Medicaid or other programs.

The proposed “carve out” of the Medicaid pharmacy benefit from managed care to fee-for-service will eliminate these 340B savings, essentially imposing a tax on New York’s safety-net health system and resulting in New York State giving at least $160 million in Medicaid funding back to the federal government that would otherwise go to community-based care.

The Medicaid Carve-Out Plan will severely compromise access to life-saving treatment for New Yorkers living with or at high risk for HIV/AIDS: undermining the ability of people with HIV to achieve and maintain viral load suppression needed for optimal health and to prevent new infections; worsening persistent HIV health disparities; and resulting in higher Medicaid costs due to increased rates of avoidable emergency room visits and hospitalizations. GMHC is particularly concerned about the impact on New Yorkers aging with HIV/AIDS who are now the largest demographic of people living with the disease. This population often requires multiple medications to manage chronic conditions, as well care coordination and supportive services to deal with complex medical and psychosocial needs. Studies have shown that the Medicaid Carve-Out Plan will result in cuts to services that are projected to actually increase state Medicaid costs by $1.5 billion over the next five years.

GMHC joins with community-based health care organizations in calling on Gov. Cuomo and the New York State legislature to:

  • Reverse the Medicaid Carve-Out Plan before it takes effect on April 21, 2020;
  • Pass A10960 (Gottfried)/S8948 (Rivera), legislation that would delay the Medicaid Carve-Out Plan until at least April 1, 2024, for 340B providers, to provide time to fully consider alternatives;
  • End the state’s 20 percent freeze on funding for health and human services that is devastating providers across the state, including GMHC;
  • Instead, fill the projected state budget deficit caused by COVID-19 with new revenue raised by the proposed Billionaires (A10414 (De La Rosa)/S8277 (Ramos)) Ultramillionaires (A10364 (Simotas)/S8164 (May)) and Pied-à-terre (A4540 (Glick)/S44 (Hoylman)) taxes.
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