The Department of Health and Human Service’s Office of Inspector General (OIG) has issued a couple of reports lately on Medicaid coverage of prescription drugs and we thought we’d highlight them here.
The first report suggests that the Medicaid program could save hundreds of millions of dollars a year by re-determining the calculation of average manufacturer price (AMP) for some authorized generic products. … More
There’s a saying that one should work hard in the present to reap the rewards later in life. But should one need to work to qualify for Medicaid?
In a week of legal machinations and legal setbacks on the health care front for the Trump Administration, Judge James E. Boasberg’s opinion in Gresham v. Azar suggests that the answer is no,… More
On March 22, 2019, CMS published a long-awaited letter to State Medicaid Directors and a new guidance document regarding the Home and Community-Based Services (HCBS) waiver program. The letter revises previous guidance that CMS had provided to states on “Settings that have the effect of isolating individuals receiving HCBS from the broader community” for purposes of receiving Federal funding for services provided under a HCBS waiver. … More
On January 31, 2019 the HHS Office of Inspector General (OIIG) issued a proposed rule that will be published in the Federal Register on February 6. The proposed rule has the potential to fundamentally re-structure the prescription drug marketplace in the United States by dramatically altering the economics of pharmaceutical pricing. Although much of the attention surrounding the rule has been focused on its effect on the Medicare Part D prescription drug program,… More
It was just earlier this week that we were writing about a flurry of solicitations released by the the Massachusetts Executive Office of Health and Human Services (EOHHS) seeking bids from manufacturers of select, generally high-priced outpatient drugs for supplemental rebates in MassHealth’s fee-for-service and managed care programs. At that time, we noted that this exercise was likely foreshadowing the release of Governor Baker’s budget proposal.… More
A recent news article suggests that Trump Administration officials are considering allowing states to receive their Medicaid funding through a block grant. The article did not specify how CMS would accomplish such a goal without a statutory change. Details are supposedly being developed, but until we see those details, it’s hard to know exactly what the agency is considering.
My colleagues and I at the Medicaid and the Law Blog thought it might be helpful to provide some background on the concept of block grants in Medicaid,… More
In an interesting (intriguing even?) turn of events, in late December 2018 the Massachusetts Executive Office of Health and Human Services (EOHHS) announced through its public bidding site that it was seeking bids from manufacturers of select, generally high-priced outpatient drugs for supplemental rebates in MassHealth’s fee-for-service and managed care programs. While the state has before used the public bidding process successfully to negotiate supplemental rebates for the state’s Medicaid program (for example,… More
On December 13, 2018, the Medicaid and CHIP Payment and Access Commission (MACPAC) held its December 2018 public meeting.
Dr. Paul Jeffrey, the Director of Pharmacy for MassHealth, spoke on MassHealth’s drug pricing approach, in particular with respect to a drug pipeline he described as “alarming” in terms of cost but “sensational” in terms of potential impact. Although Dr. Jeffrey suggested that implementing a closed formulary would require waiver authority (which CMS denied Massachusetts last year),… More
Despite Mylan’ $465 million settlement with the Department of Justice for overcharging Medicaid millions of dollars for its product EpiPen, Congress is not ready to let bygones be bygones. In a display of bipartisanship, Sen. Grassley (R-IA) and Sen. Wyden (D-OR) unveiled a bill (section-by-section summary) entitled “The Right Rebate Act” (RRA) on December 4, 2018 and explicitly cited the EpiPen experience as the chief motivating factor for its creation. … More
In 2006, former Massachusetts Governor Mitt Romney signed Chapter 58 of the Massachusetts Acts of 2006 into law. Chapter 58 was designed to ensure that all Massachusetts residents would have access to some form of health insurance, and it accomplished this through reforms to the individual insurance market; subsidies to purchase health insurance; and an expansion of the Massachusetts Medicaid program, known as “MassHealth.” Many observers have suggested that the enactment of Chapter 58 in Massachusetts paved the way for enactment of the Affordable Care Act at the federal level four years later (although Governor Romney strenuously denied this during his campaign for President in 2012).… More
Despite all of the drama surrounding the 2018 midterm elections, one thing was clear: Medicaid had a big night on November 6, 2018.
In particular, the electorate in the Red states of Nebraska, Idaho, and Utah voted to expand Medicaid (i.e. extend Medicaid coverage to low-income able-bodied adults). Although the Montana electorate rejected a ballot measure that would have permanently funded the Medicaid expansion in that state beyond 2019,… More
In a wide-ranging speech on CMS’s efforts to lower Medicaid drug costs, Administrator Seema Verma announced yesterday that CMS has approved Michigan’s proposed state plan amendment to utilize value-based payment arrangements with drug manufacturers. With CMS’s blessing, Michigan can now enter contracts with pharmaceutical companies in which manufacturers provide the state supplemental rebates when their drugs fail to meet specified treatment benchmarks.
Michigan is the second state that has received CMS’s approval to pursue value-based purchasing agreements.… More
Overview
On November 13, 2018 CMS (as mandated by Congress in the 21st Century cures Act) issued a State Medicaid Director Letter providing states with guidance on both: (1) existing authority for states to provide support for adults with serious mental illness (SMI) and/or children with a serious emotional disturbance (SED); and (2) a new demonstration opportunity to permit states to offer care for certain individuals with serious mental illness residing in Institutions for Mental Disease (IMDs).… More
We have written recently about the interrelationship between the Medicaid program and U.S. immigration law. Our post generated a lot of interest and now there’s a new development to report.
On October 10, 2018, the Department of Homeland Security (DHS) published a proposed regulation in the Federal Register that, if finalized, may have an effect on individuals seeking admission to the United States,… More
In prepared remarks delivered by Administrator Seema Verma on September 27, 2018 at the 2018 Medicaid Managed Care Summit, the Administrator previewed the release of an impending guidance document on a new/updated “work requirement” demonstration. As noted in the prepared remarks:
Additionally, in January, we released a groundbreaking new demonstration opportunity in response to state requests to test work and community engagement incentives among able-bodied adult beneficiaries.… More
The United States Supreme Court will have the opportunity to hear an important case out of Fifth Circuit Court of Appeals affecting how states pay community health centers for Medicaid beneficiaries enrolled in a managed care plan. Community health centers represent the largest primary health care safety net for the nation’s poorest urban and rural communities.
The plaintiff in the case, Legacy Community Health Services,… More
This is a brief post about a CMS proposed rule that sort of slipped under the radar last week. But it has the potential to raise some eyebrows because it is clearly designed to make it harder for labor unions to collect dues from some home health care workers who are paid directly by Medicaid.
Section 1902(a)(32) of the Social Security Act prohibits reassignment of Medicaid funds, and only allows Medicaid funds to be paid directly to individuals performing health care services,… More
It has not been a good week for states that want to try innovative Medicaid waivers. First, CMS shot down Massachusetts’ attempt to re-structure the 25-year old Medicaid prescription drug rebate program to achieve additional savings on the cost of prescription drugs. And then on Friday, the United States District Court for the District of Columbia effectively blocked Kentucky’s attempt to impose “community engagement” requirements on some Medicaid recipients. … More
If recent history provides us with any guideposts on how the current Administration will review and approve (or not approve) State waiver requests, today’s news may come as a bit of a surprise. In the wake of recent approvals of never-before-seen waivers — including the imposition of new work requirements in Kentucky, Indiana , and Arkansas — today we learned that CMS has said no to lifetime limits on Medicaid benefits in the state of Kansas.… More
In the midst of a busy day on Capitol Hill yesterday, President Trump signed a long-anticipated Executive Order (EO) entitled, “Reducing Poverty in America by Promoting Opportunity and Economic Mobility.” Notably, the EO directs various Federal agencies (including the Department of Health and Human Services) to review existing guidelines on publish assistance programs to ensure they are in line with the President’s outlined “Principles of Economic Mobility.”… More
Last summer we wrote about an interesting court case involving payments to disproportionate share hospitals (DSH) under the Medicaid program. It’s one of the hottest issues in Medicaid right now; seven courts have invalidated the CMS policy that is at issue. The most recent decision came last week, in the US Court of Appeals for the First Circuit, involving a challenge brought by New Hampshire hospitals.… More
On March 23, CMS finalized updates to the Medicaid National Drug Rebate Agreement (NDRA) for the first time in 27 years to incorporate legislative and regulatory changes that have occurred since the Agreement was first published. As my colleague previously wrote, CMS proposed changes to the NDRA in November 2016—most, though not all, of the proposed changes were finalized.
On March 26,… More
Our readers may remember our discussion of the ongoing saga surrounding enforcement of the entitlement to Medicaid. We have covered it several times before (here and here) on this blog. Aside from discussing the topic because it allows us to flex our legal muscle with italicized case names, we also believe it’s critical for our readers to understand how Medicaid entitlement has evolved over time. … More
My colleague Tom Barker and (my former boss) Professor Sara Rosenbaum just finished a series of back-to-back sessions on enforcing the Medicaid entitlement – the sessions were entertaining and engaging for all involved. We have written about this topic previously – notably here and here. Tom and Sara’s excellent slide deck can be viewed here:
During the opening session of AHLA yesterday, we had the opportunity to hear remarks for Calder Lynch, current Counselor to CMS Administrator Seema Verma and potential replacement pick for outgoing CMCS Director. Lynch reiterated the three pronged approach the current administration is taking to Medicaid (as previously outlined by administrator Verma):
According to Lynch,… More
Good morning from snowy Baltimore! Myself, along with my colleagues Tom Barker, Sean Ahern, and Erik Schulwolf are excited to be here here at AHLA’s Institute on Medicare and Medicaid Payment Issuers. Over the next few days we plan on blogging about our insight, key sessions, and other fun tidbits and developments as we take in all of the great information at this annual gathering of the health bar.… More
We’re certain that no one has forgotten about the January CMS policy announced by the current administration that supports states seeking to adopt work and community engagement requirements as part of their Medicaid programs through section 1115 waivers. We certainly have not. We previously covered this topic in-depth following CMS’ policy announcement and the approval of Kentucky’s 1115 waiver containing a work requirement.… More
On March 21 and 22, two of this blog’s authors will be presenting on two Medicaid topics at the American Health Lawyer’s Association (AHLA) annual Medicare and Medicaid conference in Baltimore, Maryland.
One of the hottest topics in Medicaid right now is the Trump Administration’s policy on granting Medicaid waivers to states, a topic we have posted about here, here and here. … More
On December 15, 2017, CMS Director Brian Neale informed State Medicaid Directors of CMS’ intent to phase out funding for Designated State Health Programs (DSHP) in Section 1115 waivers. CMS will no longer approve waiver requests under Section 1115 for DSHP funding, and will not renew portions of existing waivers that provide DSHP funding.
DSHP funding in Section 1115 waivers developed alongside of CMS’ funding of Delivery System Reform Incentive Payments (“DSRIP”) following the passage of the Affordable Care Act in 2010. … More
On November 17th, Arizona’s state Medicaid agency (the Arizona Health Care Cost Containment System, or AHCCCS) sent a letter to CMS proposing policies that it believes will build on past successes and “leverage[] conservative principles.”
In the letter, AHCCS seeks input from CMS on ideas to “modernize” the prescription drug benefits offered under the state’s Medicaid plan.
(Also, notably, though not the topic of this blog post,… More
Partner Tom Barker recently presented a webinar on the MassHealth shift to ACOs. Click here to view the presentation slides.
Webinar Description
The MassHealth program is embarking on a dramatic shift away from fee-for-service Medicaid to a reimbursement model that relies more on value and quality. The Baker Administration hopes to accomplish this through enrolling some MassHealth enrollees into accountable care organizations, or ACOs,… More
On November 6, 2017 the Centers for Medicare & Medicaid Services (CMS) issued an information bulletin on changes and improvements to the existing Section 1115 waiver process.[1] Under Section 1115(a) of the Social Security Act, the Secretary of Health and Human Services is permitted to waive compliance with any of the requirements of section 1902 of the Act (which generally sets forth the requirements for state Medicaid programs in order to receive Federal financial assistance) in order to pilot or test projects which,… More
On September 8, 2017, following the mandated 30-day public comment period, the Baker Administration concluded its review of the pending MassHealth Section 1115 Demonstration Amendment Request. The submitted waiver request can be viewed online here. Once received at CMS, the agency will have to time to review the proposal, and must also solicit additional public feedback, prior to finalizing any waiver.
While the agency made a number of modifications to the waiver based on public feedback,… More
An appeal recently filed in the United States Court of Appeals for the First Circuit could give further clarity regarding the CMS’s ability to discount Medicaid DSH payments for hospitals that received funds from Medicare and private insurers.
DSH Uncompensated Care Costs and the FAQ Policies
The Medicaid Act requires state Medicaid programs to increase payments to hospitals that treat a disproportionate share of Medicaid and uninsured patients. … More
We have noted before the link between the Medicaid prescription drug rebate program and the 340B program. As a refresher, in order to have its outpatient drugs covered by Medicaid, the manufacturer must agree to three separate requirements. First, the manufacturer must agree to provide a rebate to Medicaid equal to the greater of 23.1% of the average manufacturer price (AMP) of the drug, or AMP minus the best price of the drug. … More
Since the beginning of this year’s legislative session, Governor Baker has expressed concern over the growth in enrollment in MassHealth, the state’s Medicaid program. A look at the numbers explains why. Prior to the enactment of the Affordable Care Act’s Medicaid expansion in 2014, there were 1.3 million people enrolled in MassHealth. By April of this year, that number had increased by 28.4%, to nearly 1.7 million state residents.… More
Partner Tom Barker joined POLITICO’s Pro Health Care Briefing: Medicaid as a Driver of Care Innovation in the States on Tuesday to discuss how states are reshaping Medicaid to deliver more value to patients and taxpayers. Watch a video from the live event here:
Partner Tom Barker will speak at POLITICO’s Pro Health Care Briefing: Medicaid as a Driver of Care Innovation in the States on Tuesday, June 13, 2017. This event brings together experts and leading voices from around the country to discuss how states are reshaping Medicaid to deliver more value to patients and taxpayers, no matter the future of the Affordable Care Act.
Additional featured speakers include Trish Riley,… More
Another state is stepping up to bat following Secretary Price’s and CMS Administrator Verma’s letter to state governors promising enhanced flexibility for their Medicaid programs. Wisconsin has recently unveiled its plan to submit a new Section 1115 waiver application to CMS by May 26, 2017. In short, the Wisconsin waiver seeks to infuse the state’s Medicaid program with features from the commercial sector, and it does this by borrowing some elements from the Healthy Indiana Plan (HIP 2.0) and Kentucky waivers,… More
Recent reports say that Mayo Clinic will give preference to privately insured patients over Medicaid and other publicly-funded patients under a new policy, which the Minnesota Department of Human Services is currently investigating. MPR News spoke to partner Tom Barker about the implications of the new Mayo Clinic policy under federal law. Click here to read the full article. More
On January 30, 2017, President Trump signed an executive order (“EO”) that has generated considerable confusion in the administrative law space, and has produced at least one lawsuit thus far. The EO requires that for every new regulation issued by an executive agency, two regulations must be identified for elimination (“repeal”). This requirement is coupled with another provision that imposes an immediate cap on net costs imposed by new regulations (“offsets”). … More
One of the most pressing issues before the 115th Congress and newly inaugurated President Trump will be to determine how the Medicaid expansion population will fit into a broader reform package for the Medicaid program as a whole. Many state governors in expansion states have expressed concern that the long-standing Republican proposal of block-granting Medicaid will leave them exposed to unsustainable financial pressures.
President Trump’s nominee for HHS Secretary,… More
Summary
On January 20, 2017, President Donald Trump signed an Executive Order (EO) entitled “Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal” to signal a clear message that “repeal and replace” of the Affordable Care Act (ACA) is a priority for the new administration. On the same day, the White House Chief of Staff, Reince Priebus, issued a memorandum to executive agencies ordering an immediate “regulatory freeze” and directing the Departments to send no regulation to the Federal Register “until a department or agency head appointed or designated by the President .… More
Introduction
Over the course of the last several blog posts, we’ve discussed how the Medicaid program could potentially be transformed under the incoming Trump Administration. We also described the central role that state-led demonstration waivers would play in defining the parameters of this transformation. Now, the association for State Medicaid directors is weighing in on precisely this issue. The National Association of State Medicaid Directors (NAMD)recently published a document laying out the group’s priorities for the Medicaid program in the first 100 days of the incoming Trump Administration. … More
Currently, nearly 10 million Americans are dually-eligible for both Medicare and Medicaid. These “dual eligibles” are low-income seniors and individuals with disabilities who are separately eligible for and receive coverage under both the Medicare and Medicaid programs. In general, Medicare acts as the primary payer for dual-eligibles, while Medicaid provides “wrap-around” coverage for these individuals, helping with some out-of-pocket costs (such as premiums, copayments and deductibles) and offering coverage for services not otherwise covered by Medicare (vision,… More
As we noted here last month, Medicaid is a 1960s-era health insurance plan operating in a 21st century world. As Medicare and commercial payers have started taking steps to move away from payment by volume to paying for value, it’s important to recognize that the same innovation needs to occur in Medicaid. In fact, one could argue that this innovation is even more critical in Medicaid.
Why? … More
Dear readers: this post is going to be a bit different from our regular posts, in that we are going to try to refrain from getting too far in the weeds, and avoid too much legalese. Why? Because the results of the November election will likely have major implications not only for the Medicaid program itself, but for the millions of individuals it serves. We are fortunate to have a platform here and it is our hope that,… More
On November 4, 2016, the Centers for Medicare & Medicaid Services (“CMS”) sent word to the Massachusetts Executive Office of Health and Human Services (EOHHS, referred to here as “MassHealth”) that it approved a major amendment to Massachusetts’ section 1115 demonstration project through June 30, 2017. At the same time, CMS also approved an extension of this same demonstration through June 30, 2022. Approval of Massachusetts’ waiver amendment comes after nearly a year of negotiations and may ultimately result in the transition of the vast majority of MassHealth enrollees into newly-formed Accountable Care Organizations (“ACOs”) operating under one three models,… More
In light of the growing cost (and demand for) specialty pharmaceutical products, and the corresponding stress this growth has had on state Medicaid coffers, CMS is now actively encouraging states Medicaid programs to engage in value based purchasing (VBP) arrangements with manufacturers. On Thursday July 14, CMS released guidance documents to state Medicaid agencies and manufacturers regarding participation in these VBP arrangements.
Background
As states consider creative ways to finance high cost drug spend,… More
Here is another video from my recent guest lecture at George Mason University. Discussing the evolution of U.S. healthcare delivery and financing was particularly challenging because of the many ongoing and approaching changes, such as the Medicare Part B Drug Payment Model, the implementation of MACRA, the launch of CMMI’s Oncology Care Model, and the steady expansion of value-based arrangements in the private market.
Introduction
The Office of Inspector General (OIG) recently issued a report titled “State Efforts to Exclude 340B Drugs from Medicaid Managed Care Rebates.” In its report, OIG wanted to study the different methods that states were using to prevent illegal “duplicate discounts” that occur as a result of the interaction between the Medicaid drug rebate program and the 340B drug-discount program. OIG revealed that the systems a majority of states have for preventing duplicate discounts are actually quite vulnerable,… More
On January 21, 2016, the Centers for Medicare & Medicaid Services (CMS) published a long-awaited final rule entitled “Medicaid Program: Covered Outpatient Drugs.” CMS actually proposed this rule in February, 2012, so it’s taken almost four years for the agency to finalize the many policies on which they sought comment – almost all of which flow from the enactment of the federal health care reform law that was enacted in 2010,… More
As states and the federal government alike grapple with Medicaid in the 21st century, we at www.medicaidandthelaw.com believe it is helpful to take a step back and view the program in a historical perspective. This slide deck was created by Tom as part of a presentation to key government officials considering various Medicaid reforms. More
Although outpatient prescription drugs are not a mandatory benefit under the Medicaid program, all 50 states do provide at least some coverage for prescription drugs. Manufacturers that want their drugs covered under Medicaid must agree to pay rebates to the Medicaid program (for brand name drugs, rebates must equal at least 23.1% of the average manufacturers price of the drug); must agree to participate in the 340B program; and must agree to provide federal supply schedule pricing to federal government agencies.… More
On May 26, 2015 the Centers for Medicare & Medicaid Services (CMS) released its long-awaited proposed rule designed to modernize the Medicaid managed care regulations (last updated in 2002) to reflect changes in the use and growth of the managed care program and to align the program more closely with other existing healthcare programs, including Medicare/Medicare Advantage and qualified health plans offered by Exchanges.
As of FY 2011,… More
If the Office of Management and Budget’s website is to be believed, CMS will release the long-awaited Medicaid managed care rule in the coming weeks (our conversations with senior CMS officials indicated a similar timeline.) The federal regulations governing Medicaid managed care have not been updated since 2002 and much has changed in the program since then, most notably managed care enrollment numbers: between 2002 and 2015 the percentage of managed care enrollees has grown from roughly 50% to nearly 80%. … More
On March 9, 2015 the Office of Inspector General (OIG) for the Department of Health and Human Services announced the publication of a new report documenting the OIG’s audit of “personal care services” provided in New York State between 2007 and 2011 (this Report followed on the heels of a 2009 Report focused on personal care services in New York City which resulted in a $70 million dollar settlement with the Federal government in 2011). … More
The big news out of Ohio today is the announcement by the State Medicaid Director John McCarthy that, at the end of week, 61,000 Ohioans are set to lose their Medicaid coverage for failure to verify household income. According to McCarthy, the federal government requires states to verify income each year to ensure that Medicaid recipients still qualify for coverage.
So what do the Federal rules and regulations say about Medicaid income verification?… More
Sometimes news is so interesting you need a night to ponder on it. Yesterday’s announcement that Indiana reached an agreement with CMS to expand its Medicaid program to the ACA-levels (138% of the Federal Poverty Level) was a big surprise and carries with it some very real, long-term implications. The Indiana model creates two new Medicaid pools: Health Indiana Plan (HIP) Basic and HIP Plus. HIP basic will be made only available to individuals making less than the federal poverty level and includes coverage of all essential health benefits,… More
[Updated at 1:12 p.m.]
Hello dear readers. For those of you just joining us, this is a very new blog and we are still exploring different content options. Today we are going to try out a new feature, “What’s New in Medicaid Today.” We can’t promise yet that you will see this daily, but if you do find it helpful, comment, and you may just convince us to make this a regular routine.… More
