MEDICAID NEWS RECAP – DECEMBER 2020

What Final Medicaid Value-Based Purchasing Rule Means for Payers  

CMS has finalized a rule which promotes private payers and states negotiating value-based purchasing contracts for Medicaid drugs, along with other changes. The final rule was built upon the Medicaid Drug Rebate Program (MDRP) law from the 1990s, also called the Medicaid “best price” rule. The rule established that Medicaid beneficiaries should receive a rebate from pharmaceutical manufacturers. In establishing this law, Congress aimed to secure the lowest price on prescription drugs for Medicaid beneficiaries.  read more

States are increasingly relying on provider taxes and local government funds for their share of federal Medicaid payments according to a new Government Accountability Office (GAO) report. Officials are also calling for CMS to improve oversight by collecting data on state Medicaid payment arrangements. The report is based on CMS data and interviews with CMS officials and Medicaid officials in 11 states, as well as a questionnaire distributed to all state Medicaid agencies. The states were selected partially based on Medicaid spending and geographic diversity.  read more

The coronavirus pandemic and federal legislation have caused a spike in Louisiana’s Medicaid population, adding 208,000 people to the rolls over the past year. Nearly 1.8 million people in Louisiana — about 39% of the state’s 4.6 million residents — were receiving health coverage through Medicaid as of last month, according to The Advocate.”We know very well when the economy goes south, the demand for public services increases,” said Jan Moller, head of the left-leaning Louisiana Budget Project, which advocates for low- to moderate-income families.  read more

Stanley Hupfeld: Managed care can work for Medicaid in Oklahoma  

In a recent History Channel special the hundred greatest innovations in the past century were discussed. Surprisingly, the invention of dice was named as a major innovation. We are all familiar with the expression, “roll the dice.” It simply means leaving our future to blind luck. Every year in our state Medicaid program we leave our result to just that, blind luck. The vagaries of the health status of our state’s most vulnerable population are left to the whims of chance. Any number of circumstances (including a pandemic and a vote on expansion) can significantly alter the state’s fiscal responsibility for the care of its Medicaid population.  

The Centers for Medicare & Medicaid Services (CMS) has finalized a rule that aims to foster value-based purchasing arrangements with drugmakers in Medicaid. Medicaid’s traditional “best price” model, in which pharmaceutical companies report their best price to the Center for Medicare and Medicaid Innovation, has not been overhauled to match the changing face of products coming down the drug development pipeline. However, drug companies may not be able to easily account for value-based arrangements in calculating the best price for their products, CMS said in an announcement.  read more

2020 MACStats Released by MACPAC   JD Supra, December 18

On December 16, 2020, the Medicaid and CHIP Payment and Access Commission (MACPAC) released its annual MACStats: Medicaid and CHIP Data Book for 2020.  This document contains a wealth of information about the Medicaid and CHIP programs and it is the primary source of information about these two important public health insurance programs. You can access MACStats here. This is the first MACStats to derive information from the Transformed Medicaid Statistical Information System (T-MSIS).  CMS has worked with states for many years to transform the prior Medicaid Statistical Information System. read more

Medicaid is the single largest payer of health care in the United States. As the program has grown in size and scope, it has struggled with fraud, waste, abuse, and improper payments. Over the years, there have been a number of federal initiatives to rein in costs; nonetheless, Medicaid has remained on the GAO’s High-Risk List since 2003. Last month, CMS reported on fiscal year 2020 Medicaid estimated improper payments. According to CMS, “the FY 2020 national Medicaid improper payment rate estimate is 21.36 percent, representing $86.49 billion in improper payments.” Medicaid improper payments now account for more than twenty percent of federal Medicaid expenditures and one out of every four Medicaid dollars is spent improperly.  read more

Two Democratic lawmakers this week introduced legislation to reduce state payments to the insurance companies that manage Illinois’ Medicaid program, arguing that the COVID-19 pandemic is resulting in excess profits for the insurers. Sen. Dave Koehler, of Peoria, and Rep. Fred Crespo, of Hoffman Estates, say that money saved due to the pandemic could be used to help struggling downstate hospitals whose resources have been strained by excess hospitalizations and low revenue.  read more

Missouri voters approved expanding Medicaid by about 7 percentage points in August, and now it’s up to the legislature to put a program in place during the 2021 session, which begins in January. But the Republican-dominated legislature opposed expanding the public health option for low-income Missourians, and lawmakers are expected to introduce measures to limit who can access coverage in an effort to keep costs lower. State Rep. Mary Elizabeth Coleman, R-Arnold, said “everything is on the table” when considering how the program will look in Missouri.  read more

A broad coalition of patient advocates, nurses, hospitals and grassroots organizations is advancing a 2022 ballot measure effort to expand Medicaid in South Dakota. The group, which includes the American Cancer Society Cancer Action Network, AARP South Dakota, Avera Health, Community HealthCare Association of the Dakotas, Great Plains Tribal Leaders Health Board, Monument Health, Sanford Health, South Dakota Association of Healthcare Organizations, South Dakota Farmers Union, South Dakota Medical Association and South Dakota Nurses Association, recently formed a ballot committee called South Dakotans Decide Healthcare.  read more

In a ruling that could pave the way for increased regulations by states such as Ohio, the U.S. Supreme Court on Thursday rejected a challenge of a 2015 Arkansas law putting restrictions on pharmacy benefit managers. “We have overwhelming evidence that the PBM marketplace is highly dysfunctional and exceedingly costly,” said Antonio Ciaccia, former lobbyist for the Ohio Pharmacists Association who is now with 3 Axis Advisors, a company set up to expose drug-pricing irregularities.  read more

A new law intended to bring more transparency to pricing practices of pharmacy benefit managers (PBMs) was signed in to state law last week. Act 120 of 2020, formerly known as House Bill 941, was signed into law at the end of 2020’s final legislative session. The Department of Human Services now has the authority to question PBMs about payment information and other disclosures. The bill also requires the Legislative Budget and Finance Committee to conduct a study investigating prescription drug pricing in the Medical Assistance Program (Medicaid).  read more

The Supreme Court will decide if Medicaid work requirements supported by the White House should be upheld, according to The New York Times. The Supreme Court said Dec. 4 it will hear the case Azar v. Gresham, No. 20-37. The case concerns rules in Arkansas and New Hampshire that required residents in those states to work, volunteer or train for a job to qualify for Medicaid. In February, a three-judge panel of a federal appeals court in Washington unanimously struck down the requirements, according to the Times.  read more

After years of being out-maneuvered by pharmacy benefit managers, Ohio is on the cusp of a revolutionary approach to rein in the middlemen in the prescription drug supply chain for the state’s 3 million poorest and disabled people. “I am confident that we are going to have unprecedented transparency and additional accountability and cost controls,” said Medicaid Director Maureen Corcoran about a plan to launch a single, state-run pharmacy benefit manager next year, along with a separate entity set up to monitor it.  read more

President-elect Joe Biden plans to nominate California Attorney General Xavier Becerra to lead the Department of Health and Human Services, according to people familiar with the decision, selecting a legal advocate who has waged battles to preserve the Affordable Care Act. Mr. Becerra led a coalition of 20 states and Washington, D.C., in a legal defense of the ACA after Republican-led states brought a lawsuit seeking to invalidate the Obama-era health law. The U.S. Supreme Court last month heard arguments in the case. The Trump administration has asked the court to strike down swaths of the ACA.  read more

Gov. Roy Cooper is still selling Medicaid expansion, but Republican lawmakers still aren’t buying. The first meeting of the bipartisan N.C. Council for Health Care Coverage fractured into a partisan divide over expanding Medicaid. Cooper spent hours pushing for Medicaid expansion, but Republican lawmakers declared themselves disappointed in his focus. Cooper formed the N.C. Council for Health Care Coverage to find solutions for the 17% of adults who are uninsured in North Carolina.  read more

States may need to re-evaluate their Medicaid managed care organization payment rates as trends of increased enrollment and low care utilization continue into fiscal year 2021, according to a Kaiser Family Foundation (KFF) data note. “Rising unemployment (and loss of employer sponsored insurance) as well as the ‘maintenance of eligibility’ (MOE) requirements tied to a 6.2 percentage point increase in the federal match rate (FMAP) authorized by the Families First Coronavirus Response Act (FFCRA)—which prevents states from disenrolling Medicaid beneficiaries if they accept the additional federal funding—are likely contributing to enrollment increases/growth across states,” the researchers stated.  read more

State Medicaid programs have been winning some key battles in the fight against soaring drug prices, including a $95 million rebate that Massachusetts wrested from a manufacturer under a negotiated value-based deal, and $300 million in rebates resulting from similar efforts in New York State. But on a national level, many challenges remain, including the huge cost of breakthrough therapies, stakeholders reported at the AMCP Nexus 2020 Virtual meeting. In the past two years, the Centers for Medicare & Medicaid Services has given Medicaid programs in eight states the authority to negotiate for supplemental rebates in value-based contracts.