Transition (Carve-Out) of Pharmacy Benefit from Managed Care to Fee-For-Service (FFS)

All Stakeholder: Implementation Update

  • Presentation also available in Portable Document Format (PDF)
November 16, 2020


  • Transitioning pharmacy services from Managed Care to fee-for-service (FFS) will, among other things, do the following:
    • Provide the State with full visibility into prescription drug costs.
    • Centralize and leverage negotiation power.
    • Provide a single drug formulary with standardized utilization management protocols.
    • Address the growth of the 340B program and associated reductions in State rebate revenue.

All Stakeholders: Monthly

NYS DOH will lead and provide all interest stakeholders with updates, facilitate a Q&A session, and incorporate feedback into the workplan as needed.


  • Monthly meetings ongoing starting with July 13 session
  • Remaining meetings scheduled for third Monday of each month

Technical Workgroup: Bi-weekly

NYS DOH is leading working sessions with Medicaid Managed Care Plans (and other subject matter experts as needed) to address transition topics and incorporate feedback into the workplan as needed.


  • Sessions 1-7 complete covering Roles & Responsibilities, Scope of Benefits, Data Sharing, Transition Strategy, Member & Provider Communication, Value-Based Payments, QARR Measures, Program Integrity, DME Supplies
  • Next two sessions will address Transition & Communication Activities and Model Contract

340B Advisory Group: Four Meetings

Provide non-binding recommendations by October 1, 2020 regarding the reimbursement of 340B claims.


  • Three meetings held on 8/5, 8/26, 9/16.
  • No formal recommendations have been submitted by the Advisory Group to date.
  • A fourth meeting will be scheduled with the Advisory Group in the coming weeks.
Key Deliverables and Timeline Update
Deliverable(s) Target Date
Complete Work Plan and Establish State Transition Team and 340B Advisory Group June 2020 ✔️
Recurring Workgroup Calls with Health Plans and All Stakeholders begin July 2020 ✔️
Frequently Asked Questions Posted to the NYS DOH Website August 2020* ✔️
Finalize NYS DOH/Managed Care Plan Roles and Scope of Benefits September 2020 ✔️
Consensus between the state and plans on data sharing concept October 2020 ✔️
Deliver file formats, data dictionary, and process for daily claim file November 2020
Transition Analysis Conducted (e.g., Formulary, DME, OTC Comparisons), Changes Made To Smooth Transition and Transition Strategy Finalized November 2020
Identify Sections of the Model Contract that Require Changes December 2020
Notice of 1115 Waiver Amendment December 2020
Required System Changes Identified and Implemented December 2020
340B Related State Plan Amendment (SPA) Submitted (if necessary) December 2020
Initial Special Edition Medicaid Update Published December 2020
Systems Stress Testing Performed January 2021
Member and Provider Notifications Sent and Second Special Edition Medicaid Update Published February 2021
Customer Service Staff Hired and Trained February 2021
Make Required Changes to Common Benefit Identification Card (CBIC), Carrier or Notice February 2021
1115 Waiver Amendment and SPA Approved by CMS March 2021
Go Live: Daily Calls with Stakeholders (through 4/30/2021 or Beyond as Needed) April 2021

* Initial FAQs posted and will be regularly updated as project progresses.

  • October 2020 Medicaid Update - Provider Enrollment
    Article: Pharmacies, Durable Medical Equipment, Prosthetics, Orthotics and Supply Providers, and Prescribers That are Not Enrolled in Medicaid Fee-for-Service (p. 10)

Website Updates


Information regarding the transition of the pharmacy benefit from Managed Care to FFS will be posted at the above website.

Email: – Please write Carve-Out in the subject line

MRT LISTSERV: /health_care/medicaid/redesign/listserv.htm


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