NY Medicaid SPA 25-0053 - Inpatient Drug Reimbursement Carve-Out

Medicaid State Plan Amendments

Published March 26th, 2026

Detected March 30th, 2026

Summary

CMS approved New York Medicaid State Plan Amendment 25-0053, which carves out select drugs administered in inpatient hospital settings from bundled inpatient payment rates for separate reimbursement. The amendment takes effect October 1, 2025. Affected drugs will be reimbursed per Attachment 4.19-B Prescribed Drugs sections. Providers are prohibited from using 340B inventory for carved-out drugs.

View original document View source feed page

What changed

CMS approved New York's Medicaid SPA 25-0053, which modifies inpatient hospital reimbursement methodology by carving out select physician-administered drugs from inpatient rates effective October 1, 2025. These carved-out drugs will now be reimbursed separately in accordance with the state's Prescribed Drugs benefit under Attachment 4.19-B. The carve-out list is maintained on the NYS Department of Health website. Additionally, providers are explicitly prohibited from using 340B inventory for drugs on the carved-out list.\n\nHospitals and healthcare providers in New York should immediately review the carved-out drug list on the NYS DOH website, update billing systems to process these drugs under the separate prescribed drugs benefit, and ensure 340B inventory is not used for any carved-out medications. The amendment is already in effect as of October 1, 2025, so providers should verify their current billing practices comply with this new requirement.

What to do next

Review the carved-out drug list on the NYS DOH website to identify affected medications
Update hospital billing systems to process carved-out drugs under the separate prescribed drugs reimbursement methodology
Ensure 340B inventory is not used for any drugs on the carved-out list

Source document (simplified)

Table of Contents State/Territory Name: NY State Plan Amendment (SPA) #: 25-0053 This file contains the following documents in the order listed:

Approval Letter
CMS 179 Form/Summary Form (with 179-like data)
Approved SPA Pages DEPARTMENT OF HEALTH & HUMAN SERVICES Centers for Medicare & Medicaid Services 7500 Security Boulevard, Mail Stop S3-14-28 Baltimore, Maryland 21244-1850 Financial Management Group March 26, 2026Amir Bassiri Medicaid Director New York State Department of Health 99 Washington Ave – One Commerce Plaza Suite 1432 Albany, NY 12210 RE: TN 25-0053 Dear Medicaid Director Bassiri: The Centers for Medicare & Medicaid Services (CMS) has reviewed the proposed New York state plan amendment (SPA) to Attachment 4.19-A NY 25-0053, which was submitted to CMS on December 30, 2025. This plan amendment proposes to carve out select drugs from the inpatient hospital rates. We reviewed your SPA submission for compliance with statutory requirements, including in sections 1902(a)(2), 1902(a)(13), 1902(a)(30), 1903 as it relates to the identification of an adequate source for the non-federal share of expenditures under the plan, as required by 1902(a)(2) of the Social Security Act and the applicable implementing Federal regulations. Based upon the information provided by the state, we have approved the amendment with an effective date of October 1, 2025. We are enclosing the approved CMS-179 and a copy of the new state plan pages. If you have any additional questions or need further assistance, please contact Kristina Mack at 617-565-1225 or via email at Kristina.Mack-Webb@cms.hhs.gov. Sincerely,

Rory Howe Director Financial Management Group

Enclosures

Attachment 4.19-A New York 145(a)

1905(a)(1) Inpatient Hospital Services Carved Out Drug Reimbursement

Effective October 1, 2025, select drugs administered or provided by a physician in an
inpatient hospital setting are carved out and reimbursed separately from the inpatient payment. Carved-out drugs will be reimbursed as applicable in accordance with Attachment 4.19-B Prescribed Drugs Sections 1, 2 and 5, or 8 of the State Plan. The list of carved out drugs is maintained on the NYS Department of Health website located at: https://www.health.ny.gov/facilities/hospital/reimbursement/apr-drg/.
Providers may not use 340B inventory for drugs on the carved-out list.
March 26, 2026TN #25-0053 ___ Approval Date Supersedes TN NEW Effective Date October 1, 2025