Hospital Drug Reimbursement Carve-Out Under Medicaid

Table of Contents

State/Territory Name: 1HZ

State Plan Amendment (SPA)#: 1<-2-00 This file contains the following documents in the order listed  Approval Letter  CMS 179 Form  Approved SPA PageV

CMS DEPARTMENT OF HEALTH & HUMAN SERVICES & Centers for Medicare Medicaid Services 7500 Secmity oulevard, Mail Stop S2-14-26 altimore, Maiyland 21244-1850 CBENTERS DFOR BME()tCARI: & MfOICAIO $fRVICE$ CENTER FOR MEDICAID & CHI P SERV I CES Center for Medicaid and CIDP Services Medicaid Benefits and Health Programs Group

March 26, 2026 Amir Bassiri Medicaid Director Deputy Commissioner of the Office of Health In surance Programs New York State Depaitment of Health One Commerce Plaza 99 Washington A venue, Suite 1715 Albany, NY 12211 Re: New York State Pl an Amen dment (SPA) 25-0064 Dear ir ector Bassiri: The CMS Division of Pha1macy team has reviewed New Yor k's SPA 25-0064, received in the CMS Medicaid Se1vices OneMAC application on December 30, 2025. This amendment proposes to ca1ve out select mugs provided in a hospital sett in g and reimburse them in accordance with the stat e's Prescribed Dmg reimbursement methodologies. Based on the inf o1 mat ion provided and consistent with the regulations at 42 CFR 447.20, we ai·e pleased to info1m you NY- 25 -0064 is approved with an effective date of October 1, 2025. We are attaching a copy of the signed CMS-179 fo1m , as well as the pages approved for incorporation into New York's state plan. If you have any questions regarding this state plan amendment, please contact Lisa Shochet at 410-786-5445 or lisa.shochet@cms. hh s.gov.

1c ey organ Deputy Director Division of Phaimacy

cc: Regina Deyette, New York State Depai tm ent of H ea lth Melv in a H aiT ison, New York State Lead, CMS

DEPARTMENT OF HEAL TH AND HUMAN SERVICES FORM APPRO V ED 0938--0193 CENTERS F OR MEDICARE & MEDICAID SERVICES 0MB FNo. 2. STATE -- 1. TRANSMI TT AL NUMBER NOTICE OF APPROVAL OF TRANSMITTAL AND Ny 2 5 0 6 4 -- - --- STATE PLAN MATERIAL 0 XXI SECURITY ACT @ XIX FOR : CENTERS FOR MEDICARE & MEDICAID SERVICES 3. PROGRAM I DE NT IFI CATION : TITLE OF THE SOC IAL

TO: CENTER DIRECTOR 4. PROPOSED EFFECTIVE DATE CENTE RS OR MEDICAID & CH IP SERVICES October 1, 2025 DEPARTME NT OF HEAL TH AND HUMAN SERVICES

1. FEDERAL STATUTE /R EGULATION CITATION 6. FEDERAL BUDGET IMPACT (Amounts in WHOLE dollars) a FFY 10/01 /25-09/30/26 $ 0 § 1905(a)(12) Prescribed Drugs, Dentures, and Prosthetic Devices; 10/01 /26 - 09/30/27 $ 0 b. FFY

2. PAGE NUMBER OF THE PLAN SE CT ION OR ATTACHMENT 8. PAGE NUMBER OF THE SUPE RS EDED PLAN SECTION
   OR ATTACHMENT (ff Applicable) Attachment4.19-B Pages: 4(d)(1), 4(d)(2) Attachment 4.19-B Pages: 4(d)(1 ), 4(d)(2)

3. SUBJECT OF AM ENDME NT
   Drug Reimbursement 0 OTHER, AS SPECIFIED: ® GOVERNOR'S OFFICE REPORTED NO COMMEGOVERNOR'S REVIEW (Check One) 10. 0 COMMENTS OF GOVERNOR'S OFFICE ENCLOSED NT 0 NO RE PLY REC EI VED WITHIN 45 DAYS OF SUBMITTAL

4. RETURN TO 11. SIG FFICIAL New York State Department of Health ----------t Division of Finance and Rate Setting 12. TYPED NAME Amir Bassiri 99 Washington Ave - One Commerce Plaza ----------------------t Suite 1432 13. TITLE Albany, NY 12210 Medicaid Director

5. DATE SUBMITTED December 30 , 2025 fre~~1X i Wr FOR CMS USE ONLY 30, 2025 16 17 . DATE APPROVED • DATE March 26, 2026
   PLAN APPROVED- ONE CO PY A TTA CHED

6. EFFECTIVE DAT E OF APPROVED MATERIAL 19 IAL .:.••:e .: • October 1, 2025 111..:.I:: •

7. ••• --20. TYPED NAME OF APPROVING OFFICIAL _, -'""' ' ,, ,- vu .. _- • , , -, ~ ... Deputy Director, Division of Pharmacy Mickey Morgan

8. REMARKS
   Back Instructions on FORM CMS-179 (09/24)

Attachment 4.19-B New York 4(d)(1) 1905(a)(12) Prescribed Drugs, Dentures, and Prosthetic Devices; and Eyeglasses

1. Effective October 1, 2025, select drugs provided in a 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 Drug Section. 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/.

2. Providers may not use 340B inventory for drugs on the carved-out list.

3. Payment for drugs dispensed by the pharmacy of a 340B covered entity as described in
   section 1927(a)(5)(B) of the Act, or a contract pharmacy under contract with a 340B covered entity as described in section 1927(a)(5)(B) of the Act, will be as follows:

4. 340B purchased drugs – actual acquisition cost not to exceed the 340B ceiling
   price, plus the professional dispensing fee in Section 2;

5. Non-340B purchased drugs – in accordance with lower of logic in section 1, plus the
   professional dispensing fee in Section 2.

6. Payment for clotting factor dispensed by a pharmacy enrolled in the NYS Medicaid FFS
   Program is at the lower of: SMAC, as described below, not to exceed WAC, plus the professional dispensing fee in Section 2; or the billing pharmacy’s usual and customary price charged to the general public. SMAC is established for clotting factor products using multiple clotting factor pricing resources including but not limited to wholesalers, drug file vendors such as First Data Bank, pharmaceutical manufacturers, and the Hemophilia Services Consortium, Inc. pricing. The Hemophilia Services Consortium, Inc. subcontracts with the New York Blood Center (both not-for-profit corporations) to negotiate with manufacturers and distributors to obtain the best volume discount for the Consortium’s safety net hospital. The SMAC file is stored in a database where valid statistical calculations are used to evaluate and compare the various pricing benchmarks to develop the SMAC price. The SMAC file is updated monthly and applied to all clotting factor products. Payment for 340B-purchased clotting factor dispensed by a Hemophilia Treatment Center, whether the pharmacy is owned by the covered entity or has a contract pharmacy arrangement, will be in accordance with Section 6.a.

TN #25-0064 ___ Approval Date _0DUFK   Supersedes TN #24-0074 Effective Date October 1, 2025

Attachment 4.19-B New York 4(d)(2) 1905(a)(12) Prescribed Drugs, Dentures, and Prosthetic Devices; and Eyeglasses

1. Practitioner administered or provided drugs billed separately under the medical benefit are
   reimbursed as follows:

2. When administered or provided during an office visit, facility setting, or ordered ambulatory
   setting, drugs will be reimbursed at the lower of:

3. National Average Drug Acquisition Cost (NADAC) or, in the event of no NADAC pricing
   available, Wholesale Acquisition Cost (WAC); or

4. the Federal Upper Limit (FUL); or

5. the State Maximum Acquisition Cost (SMAC); or

6. the actual cost of the drug to the practitioner.
   No professional dispensing fee is paid. Drugs purchased by covered entities at the prices authorized under Section 340B of the Public Health Services Act must be billed at their actual acquisition cost. Providers may not use 340B inventory for drugs on the carve-out list. The list of carve-out drugs is maintained on the NYS Department of Health website located at: https://www.health.ny.gov/facilities/hospital/reimbursement/apr-drg/ and reimbursed as described in this section.

7. When administered in an outpatient setting to a patient of a disproportionate share hospital,
   clinic, or emergency department, payment may be made through either the Ambulatory Patient Group (APG) classification and reimbursement system, as referenced in this Attachment, or, if carved out of the APG system, in accordance with Section 8.a. Reimbursement for drugs in the APG reimbursement are paid as follows:

8. Practitioner-administered drugs assigned to an APG and paid through the APG drug band
   are reimbursed based on the weighted average, using Medicaid paid claims data. Payment for drugs purchased by covered entities at the prices authorized under Section 340B of the Public Health Services Act and paid through the APG drug band are paid at 75% of the drug’s APG band payment amount.

9. Practitioner-administered drugs assigned to an APG and paid through the APG Fee
   Schedule are paid in accordance with Section 8.a. No professional dispensing fee is paid.

10. Federally Qualified Health Centers (FQHC) and Indian Health Services/Tribal/Urban Indian Clinic
    Facilities have the option of receiving their payment through the Federal Prospective (PPS) rate, or through the APG reimbursement methodology as an “alternative rate setting methodology”. In the event the facility chooses to be reimbursed through the Federal PPS Rate, the rate is considered inclusive of any practitioner administered drugs. In the event the facility has opted for the APG reimbursement methodology, payment for drugs administered by a practitioner during a visit to the facility will be in accordance with Section 8.b. If a facility's Medicaid reimbursement under APGs is lower than what their payment would have been under the Federal PPS rate, the facility is entitled to receive a supplemental payment reflecting the difference between what they were paid under APGs and what they would have been paid using the PPS rate. No professional dispensing fee is paid.

11. Reimbursement for Investigational Drugs is not a covered service. The Department may consider
    Medicaid coverage on a case by case basis for life-threatening medical illnesses when no other treatment options are available. If/when approved by a Medical Director, reimbursement is at actual acquisition cost. When dispensed by a pharmacy enrolled in the NYS Medicaid FFS Program, reimbursement includes the professional dispensing fee in Section 2. TN #25-0064 ___ Approval Date 0DUFK   Supersedes TN #24-0074 Effective Date October 1, 2025