BUFFALO, N.Y. — As part of its plan to find savings in New York's Medicaid program last year, the state moved to carve out what's known as 340B.

The federal program allows grantees to get a discount on outpatient prescription drugs then be reimbursed at retail pricing.

"If we serve a high number of managed care patients, essentially that takes the 340B discount from the community health center and passes it to the state," Evergreen Health COO Michael Lee said.

Federally Qualified Health Centers treat a large amount of patients that utilize the pharmacy benefit. Lee said if the carve-out, which the state delayed last year, moved forward on April 1 as planned, it will strip Evergreen of about 70 percent of its resources.

"Anything that we are either underfunded for or not funded at all for would take a huge hit because that's how we utilize the resources from 340 program. We plug those gaps in the funding for patient care," Lee said.

FQHCs treat underserved communities and marginalized patient populations that often lack insurance and are unable to pay for care. Lee said, at Evergreen, HIV treatment, primary care, and ancillary services like a food pantry, mental health and dental care would be impacted dramatically. 

"To me, I'm baffled that we're having this discussion right in the middle of a pandemic when communities are leaning on their FHQCs now more than ever," he said.

Evergreen and the five other community health centers in Western New York have asked their legislators to take action. The state Senate's one house budget proposes fully reversing the 340B carve-out while the Assembly's plan calls for a three-year delay.

However, Lee said the administration seems intent on moving forward.

"It's really important for us now, more than ever, that both the Senate and the Assembly stay strong for the community health centers and more importantly for all the patients we serve," Lee said.

A spokesperson for the Department of Health said the proposal to move the Medicaid pharmacy program from managed care plans "saves taxpayers millions of dollars by increasing transparency, ensuring Medicaid pays the best price for medications, and eliminating unnecessary administrative costs to health plans, all while ensuring that consumers continue to have access to needed medications."

"The Executive Budget allocates more than $100 million a year in savings achieved through the carve-out directly to 340B providers," DOH Director of Public Information Jonah Bruno said. "Additionally, 340B entities will still be able to purchase medications at reduced 340B prices."