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Prescription Drug Benefit Included in Medicaid Managed Care

August 18, 2011


Effective October 1, 2011, Medicaid’s pharmacy benefit will be moved into the managed care benefit package.  The pharmacy benefit includes all FDA approved prescription drugs, as well as some over-the-counter drugs and medical supplies. The Family Health Plus (FHP) pharmacy benefit, which is less comprehensive, will also be moved into the FHP managed care benefit package. 


  • The Pharmacy Benefit will vary by plan.  Although managed care plans are required to have drug formularies that are “comparable” to the Medicaid fee for service formulary, each plan will have its own formulary, drug coverage policy, and network of participating pharmacies.
  • Plan formularies will be comparable to but not the same as the Medicaid formulary.  Not all drugs covered by Medicaid will be on plan formularies, but there must be generic or therapeutic equivalents of all Medicaid covered drugs on each plan’s formulary.
  • Utilization controls will vary by plan, and “prescriber prevails” will not apply.  Drug coverage policies like prior authorization and step therapy can differ from plan to plan.  Prescribers will need to satisfy plan requirements and plans are not required to abide by the prescriber’s judgment in the event of a dispute over the medical necessity of the drug in question.
  • Pharmacy Networks will vary by plan.  Consumers will be able to continue using their current pharmacies if their pharmacies participate with their managed care plan.  Letters from plans and the State Department of Health in August and September should provide more information on how to determine a pharmacy’s participation status with a particular plan.


Emergency Fills.  Plans are required to provide emergency fills during the transition.

  • For a transition period of 90 days from October 1, 2011, plans must provide existing enrollees with a one-time, temporary fill of non-formulary drugs for up to a 30 day supply.
  • This includes drugs that are on the formulary but subject to prior approval or step therapy or any other utilization restrictions.
  • The one-time, temporary fill must be provided by a participating pharmacy.
  • New enrollees are also entitled to one-time, temporary fills during the first 90 days of enrollment.

Out-of-Network Services.  Plans are also required to conduct disruption analysis using prescription claim data supplied by NYSDOH to identify enrollees that are likely to experience disruptions on October 1. 

  • Plans are to identify pharmacies that are not in the plan’s network but are currently providing services to plan enrollees.  Plans are to describe how they will ensure continued access, including how they will minimize travel for enrollees referred to alternative pharmacies and resolve claims presented at      non-participating pharmacies.
  • Plans are also directed to identify prescribers that are not in the plan’s network that are currently providing services to enrollees and describe how they will ensure access for enrollees using such prescribers.

Specialty and limited access drugs/supplies.  Plans are required to identify points of access and monitor ongoing access to specialty and limited access drugs and supplies, as well as drugs of particular concern, including antipsychotics, immunosuppressants, antiretrovirals, anticonvulsants, and antidepressants.

Outreach to enrollees.  Plans are required to communicate the changes in the pharmacy benefit to all beneficiaries and providers by mid-August.  Notification should explain plan specific changes in coverage and provide information regarding the exceptions and appeals process.

Assistance to enrollees.  NYSDOH has requested that plans post their formularies and information about their drug coverage policies on their websites, but this is not required.  NYSDOH has also requested that plans dedicate a helpline to help enrollees navigate the new pharmacy benefit. 


Changing plans is often an effective strategy for consumers eligible for both Medicaid and Medicare (dual eligibles) who receive their pharmacy service through Medicare Part D, because dual eligibles are allowed to switch plans at any time. Medicaid consumers will have this option only in the limited circumstances during the first year of enrollment in managed care. 

  • Medicaid managed care enrollees can only leave and join another plan within the first 90 days of joining a health plan.  After the 90 days has expired, enrollees are “locked in” to the plan for the rest of the year.
  • Consumers can switch plans during the “lock in” period only for good cause.  The pharmacy benefit changes are not considered good cause.
  • After the first 12 months of enrollment, Medicaid managed care enrollees can switch plans at any time. 


As a first step, consumers should try to work with their providers to satisfy plan requirements for prior authorization or step therapy or any other utilization control requirements.  If the plan still denies access, consumers can pursue review processes specific to managed care while at the same time pursuing a fair hearing.

  • All plans are required to maintain an internal and external review process for complaints and appeals of service denials.  Some plans may develop special procedures for drug denials.  Information on these procedures should be provided in member handbooks.
  • Medicaid managed care enrollees also have the right to request a fair hearing.  If an enrollee requests a fair hearing because access to a drug has been reduced or terminated, the enrollee has the right to aid continuing (continued access to the drug in question) while waiting for the fair hearing.
  • A fair hearing can be pursued simultaneously with the plan’s review process. The decision in the fair hearing will take precedence over the plan appeal.  So if a plan’s denial is overturned during the managed care appeal process, the fair hearing should be withdrawn.

Enrollees who are in the first 90 days of enrollment, or past the first 12 months of enrollment also have the option of switching plans to improve access to their medications.

Consumers who experience problems with access to prescription drugs should always file a complaint with the State Department of Health’s Managed Care Hotline, number listed below. 


Community Health Advocates Hotline:   1-888-614-5400

NY State Department of Health's Managed Care Hotline:  1-800-206-8125  (Mon. - Fri. 8:30 am - 4:30 pm)

NY State Department of Insurance: 1-800-400-8882

NY State Attorney General's Health Care Bureau: 1-800-771-7755

This fact sheet was prepared by Trilby de Jung, Health Law Attorney, Empire Justice Center, July 27, 2011.


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