Sen. Zellnor Myrie's eyes grew wide with surprise when a group of protestors rose at the start of Tuesday's budget hearing on health — yelling at state Health Department officials seated before lawmakers.

"340B saves lives!" advocates shouted, crowding the front of the room in the Legislative Office Building.

A handful participated in the demonstration while kneeling before Health Department Commissioner Dr. James McDonald, state Department of Financial Services Superintendent Adrienne Harris and DOH Medicaid Director Amir Bassiri, who Myrie was about to question.

Medicaid's 340B program, which allows hospitals and community providers to pay discounted prices for prescription drugs, will end April 1 under Gov. Kathy Hochul's executive budget proposal. The program was set to end as part of Medicaid cuts in the 2020 budget, but that transition has been delayed during the COVID-19 pandemic.

The program allows providers serving low-income patients in vulnerable communities to have more funding for services. Advocates argue ending the program will eliminate critical funding for community health centers and decrease access to care for patients with complex chronic conditions and medications.

"The governor and the Department of Health are robbing from the poor and giving to the rich," Dr. Archimedes B. Jao said as he was being arrested and escorted out of the Legislative Office Building by state police. "They're taking $260 million out of the 340B pharmacy program and keeping it."

Jao, a primary care doctor in Brooklyn, was one of five people to be arrested and charged with criminal trespassing after they refused to leave the hearing. He said $260 million should be committed to federally qualified health centers in the final budget.

When the hearing resumed after a brief recess, Health Department officials stressed $400 million in the budget will make those safety net facilities that depend on 340B whole.

"We are reinvesting every single dollar that health centers have stated they need directly back to them in such a way we believe they are actually going to be getting a benefit and they will not be taking a cut," Bassiri said.

McDonald vowed the department has a plan to distribute the money to the facilities when the program ends this spring.

"We care very deeply about the federal qualified health centers," he said. "We're committed to making sure the money goes back."

For several hours Tuesday, lawmakers put the pressure on Health Department officials for more funding for hospitals and providers that serve low-income communities.

McDonald noted Hochul's proposed budget increases Medicaid rates by 5% and supports hospitals with $1 billion, but he had few answers about reasoning for hospital funding or how facilities can reduce costs.

McDonald does not expect any hospitals in New York to close amid the ongoing financial struggles.

Hochul's budget also invests millions to train health workers and repay school loans as staffing shortages devastate all sectors of the health community.

"They just need time to actually be developed and trained," McDonald said.

But McDonald has concerns about appropriate levels of staff who can provide the needed training.

Hochul and the Legislature support tying state minimum wage increases to inflation in the next state spending plan that deadlines March 31, but that doesn't apply to home care workers.

Assembly Health Chair Amy Paulin, a Democrat from Scarsdale, stressed that change would undo the $3 per hour pay increase secured in the last budget.

Health Department officials are open to linking home care pay to inflation, but not until near the end of the decade, Bassiri said.

"That discussion is certainly something we're willing to have," he said to Paulin. "Based on our analysis, that is something that would not occur until 2029, 2030."

One of the most controversial provisions in Hochul's budget is keeping federal money for Medicaid that typically goes to counties — putting counties and local governments on the hook for millions of dollars. 

Several upstate lawmakers questioned DOH officials about the proposal Tuesday. Bassiri argued counties have not had to dedicate any resources to Medicaid in the last three years during the pandemic while the state has continued to reimburse counties at its full rate. 

An estimated 1 in 3 New Yorkers are on Medicaid, which Bassiri says is the second highest in the nation after California.

The federal COVID-19 emergency ends May 11. Hochul's executive order relaxing rules to allow more health workers to provide patient care is the state's only pandemic-related mandate that remains in place since the governor's emergency powers ended in September, McDonald said.

Hochul's budget includes language to make some of those permanent, including removing the requirement for when a physician must directly supervise a physician assistant, which would render the executive order unnecessary by the time the federal emergency expires.