Barclay Damon
Barclay Damon

Legal Alert

Legislature Acts to Restore Patient Choice in Pharmacy Providers

Following the filing of a class action brought on behalf of Medicaid recipients and pharmacy providers in October 2012 (Challenging Goliath (a/k/a the NYS Medicaid Inspector General)), the New York State Legislature enacted, effective April 1, 2013, corrective legislation to strengthen patient access to all pharmacy network providers (Social Services Law § 364-j(4)(u)).  The Legislative clarification terminates a hotly contested Article 78 action against the Department of Health, seeking injunctive and other relief against the State Respondents.

“A managed care provider that provides coverage for prescription drugs shall permit each participant to fill any mail order covered prescription, at his or her option, at any mail order pharmacy or non-mail-order retail pharmacy in the managed care provider network. If the managed care provider has designated one or more pharmacies for filling prescriptions for a particular drug or drugs, then such prescriptions may be filled, at the participant’s option, at any other pharmacy in the network, if the network pharmacy chosen by the participant offers to accept a price that is comparable to that of the pharmacy designated by the managed care provider.  For the purposes of this section, “mail order pharmacy” means a pharmacy whose primary business is to receive prescriptions by mail, telefax or through electronic submissions, and to dispense medication to patients through the use of the United States mail or other common or contract carrier services, and provides any consultation with patients electronically rather than face to face. Every non-mail-order retail pharmacy in the managed care provider’s network with respect to any prescription drug shall be deemed to be in the managed care provider’s network for every covered prescription drug.”

      Social Services Law § 364-j(4)(u) (emphasis added).

In April, the Department of Health issued guidance signalling increased enforcement and oversight of Managed Care Organizations providing pharmacy Medicaid benefits of Managed Care Organizations.  The Department of Health has also set up telephonic and web-based complaint lines at: 800-206-8125, managedcarecomplaint@health.state.ny.us.

The Legislation tracks a similar patient choice statute enacted in 2012, known as the “Anti-Mandatory Mail Order” law or AMMO.  Like its Medicaid corollary, AMMO guarantees commercial insured patients the right to choose a local pharmacy network provider and precludes implementation of mandatory mail order policies as long as the retail pharmacy accepts a comparable price and terms and conditions.  Like the Department of Health which oversees Medicaid, the Department of Financial Services (formerly the Department of Insurance) has set up a portal for patients and providers to file a complaint regarding violations of AMMO. (http://www.dfs.ny.gov/consumer/fileacomplaint.htm.)

The extent to which insurers and managed care organizations can limit network participation through and expansive interpretation of “terms and conditions” or “comparable price” remains an issue and potential barrier to patient choice that has yet to be resolved via regulations in legal precedent.  Pharmacy providers with concerns or questions about exclusionary practices that improperly limit network participation should consult legal counsel to review and fully understand their provider rights. Hiscock & Barclay will continue to work with PSSNY to address these issues.

For more information about this alert, please contact Linda J. Clark at (518) 429-4241 or lclark@hblaw.com, or Robert Tengeler at (518) 429-4289 or rtengeler@hblaw.com.