Here at the Medicaid and the Law Blog, we’ve spent the past couple of days going through the American Rescue Plan Act, legislation introduced in the U.S. House of Representatives last Friday that is the latest attempt by Congress to respond to the COVID-19 pandemic. There are several provisions of the legislation that would revise and expand the Medicaid program, and we thought it would be of interest to highlight them here. The House will likely pass the legislation in the next couple of days. Then, it’s on to the Senate, a reconciliation of the two bills, then on to the White House for President Biden’s anticipated signature. Congress is trying to wrap up the legislation by mid-March so we’ll be back with an update on the provisions that finally become law within the month.
The best way to describe the Medicaid provisions of the House legislation is to say that they’re an attempt to adapt the program to respond to the pandemic. In particular, these provisions caught our eyes:
- The legislation creates a new mandatory Medicaid benefit for the COVID-19 vaccines (as well as expenses associated with administering the vaccines). In addition to coverage of the vaccines, the legislation also adds a mandatory benefit for testing and treatment for COVID-19, including equipment, therapies, and treatment of any condition “that may seriously complicate the treatment of COVID-19” if that treatment is already covered under the state Medicaid plan. The legislation also makes clear that a state Medicaid plan cannot charge cost sharing for of the new benefits. The legislation requires coverage of these new benefits even in states that apply Medicaid coverage through benchmark plans. The FMAP rate for these new benefits would be 100%, and the benefits (and enhanced FMAP) would last through the last day of the first quarter that begins at least one year after the end of the COVID-19 public health emergency. In other words, let’s assume that the public health emergency ends on December 31 of this year. The enhanced benefits and FMAP would end on March 31, 2023. The legislation would also apply to the CHIP program.
- There are also two notable changes to the Medicaid drug rebate program (MDRP) in the House bill. First, with regard to the new benefit described above for COVID-19 treatments, any drug or biological agent used in a new covered COVID-19 treatment would be treated as a covered outpatient drug under the MDRP and therefore subject to rebates. Second, under the MDRP, there is a cap on the amount of rebates that a manufacturer may have to pay equal to 100% of the average manufacturer’s price of the drug. In other words, a manufacturer doesn’t have to pay a state more than the price of its drug to be covered under Medicaid. Under the House bill, this cap would be repealed as of December 31, 2022.
- In a provision not entirely related to COVID-19, the House bill would allow a State to expand post-partum coverage for up to 12 months post-pregnancy. In addition, a woman eligible for benefits under this coverage expansion would qualify for the full range of benefits under her State Medicaid plan, not just benefits related to her pregnancy. This particular provision is very similar to a recommendation advanced and adopted by MACPAC last month although the MACPAC recommendation would have gone further by making the benefit mandatory, with an enhanced federal match of 100%. As MACPAC also recommended, this proposal would also apply to the CHIP program.
- Another interesting provision of the legislation would revise a long-standing aspect of the Medicaid program that denies Medicaid coverage to prisoners. (The Medicaid program also denies coverage to adults who are residents of an institution of mental disease, a topic that my colleague Ross, and I, have written about in the past). With regard to prisoner coverage, the House bill would allow a State Medicaid plan to cover prisoners up to 30 days prior to the date of their release from prison. The House provision would remain in effect for five years after the end of the public health emergency.
- The legislation creates a new benefit category for community-based mobile crisis intervention services at an enhanced federal match of 85%. The benefit would be available to individuals not in a hospital who are experiencing a mental health or substance use disorder crisis and are treated by a multidisciplinary mobile crisis team that would need to be available 24 hours a day, every day of the year. Payments for the benefit would be made on a bundled basis.
- In addition to the FMAP changes we’ve already described, the legislation makes two additional changes to the federal matching assistance feature of Medicaid. First, for the 13 states that have not expanded Medicaid under the Affordable Care Act, the House bill would provide a 5% FMAP increase as an incentive for those states to take up the ACA expansion. In addition, the legislation increases the FMAP for home and community based services by 7.35%.
As we noted above, the legislation still has to pass the House this week and then make it through the Senate in the weeks ahead. But as we’ve said, the legislation is on a fast track and we have every expectation that some version of the House bill will be enacted into law within the next month. We’ll be back in touch after the legislation is signed into law by the President with a report on the Medicaid provisions in the final law.