By Virgil Dickson | June 27, 2018
The CMS has denied Massachusetts' request to become the first
state in the nation to determine which drugs it will cover in its Medicaid
program.
The state filed a federal waiver request last fall to establish its own drug formulary similar to private insurance companies.
Medicaid drug programs have historically covered all medications albeit with some prior authorization requirements.
The CMS said in a notice posted Wednesday that it would have considered the waiver if it was a pilot or demonstration project. But that's not how it was proposed, the CMS said. Drugmakers give rebates to Medicaid programs in order to make them more affordable.
For the CMS to sign off on Massachusetts' request, it would have to forgo such rebates and negotiate prices directly with manufacturers.
The state could then choose to exclude specific drugs based on cost-effectiveness or other approved criteria, or to employ a closed formulary structure similar to Medicare Part D or commercial plan formularies, according to the CMS.
In that scenario, the state would need to keep track of spending so as to not exceed federal expenditures budgeted for the demonstration.
The state's proposal was not consistent with these requirements. It wanted to continue to collect manufacturer rebates while enabling the state to exclude certain drugs from coverage, which wouldn't be allowable under federal law, the CMS said.
"The CMS supports the state's goal of lowering drug costs and will continue to provide technical assistance on options to test innovative drug coverage mechanisms," Tim Hill, the CMS' acting Medicaid director said in the letter.
Massachusetts said it needed the option to more closely control Medicaid drug costs, which have risen 13% every year since 2010.
The state's share of Medicaid spending jumped 20% from $6.4 billion in fiscal 2013 to $7.7 billion in fiscal 2016, according to federal data.
"If growth in drug costs continues at the current trajectory it may crowd out important spending on healthcare and other critical programs," the waiver application said.
Patient advocates slammed the proposal, saying it would result in patients losing coverage on important therapies.
"This proposal is bad for patients," Terry Wilcox, executive director of patient advocacy group Patients Rising, said in a statement.
The CMS has also declined Massachusetts' separate request to move childless, nondisabled adults with incomes above the federal poverty level into subsidized commercial plans bought through the state's exchange. Arkansas uses a similar model to cover this population.
Under the proposal, nondisabled beneficiaries at or below the poverty level would be moved to a version of Massachusetts' Medicaid program that does not cover long-term support and services, such as personal care attendants.
The CMS did not say why it denied this request.
Massachusetts has seen its Medicaid and Children's Health Insurance Program population jump more than 30% since it expanded Medicaid under the Affordable Care Act. In total, Medicaid covers 1.9 million Massachusetts residents, or one-third of the state's population.
Virgil Dickson reports from Washington on the federal regulatory agencies. His experience before joining Modern Healthcare in 2013 includes serving as the Washington-based correspondent for PRWeek and as an editor/reporter for FDA News. Dickson earned a bachelor's degree from DePaul University in 2007.
The state filed a federal waiver request last fall to establish its own drug formulary similar to private insurance companies.
Medicaid drug programs have historically covered all medications albeit with some prior authorization requirements.
The CMS said in a notice posted Wednesday that it would have considered the waiver if it was a pilot or demonstration project. But that's not how it was proposed, the CMS said. Drugmakers give rebates to Medicaid programs in order to make them more affordable.
For the CMS to sign off on Massachusetts' request, it would have to forgo such rebates and negotiate prices directly with manufacturers.
The state could then choose to exclude specific drugs based on cost-effectiveness or other approved criteria, or to employ a closed formulary structure similar to Medicare Part D or commercial plan formularies, according to the CMS.
In that scenario, the state would need to keep track of spending so as to not exceed federal expenditures budgeted for the demonstration.
The state's proposal was not consistent with these requirements. It wanted to continue to collect manufacturer rebates while enabling the state to exclude certain drugs from coverage, which wouldn't be allowable under federal law, the CMS said.
"The CMS supports the state's goal of lowering drug costs and will continue to provide technical assistance on options to test innovative drug coverage mechanisms," Tim Hill, the CMS' acting Medicaid director said in the letter.
Massachusetts said it needed the option to more closely control Medicaid drug costs, which have risen 13% every year since 2010.
The state's share of Medicaid spending jumped 20% from $6.4 billion in fiscal 2013 to $7.7 billion in fiscal 2016, according to federal data.
"If growth in drug costs continues at the current trajectory it may crowd out important spending on healthcare and other critical programs," the waiver application said.
Patient advocates slammed the proposal, saying it would result in patients losing coverage on important therapies.
"This proposal is bad for patients," Terry Wilcox, executive director of patient advocacy group Patients Rising, said in a statement.
The CMS has also declined Massachusetts' separate request to move childless, nondisabled adults with incomes above the federal poverty level into subsidized commercial plans bought through the state's exchange. Arkansas uses a similar model to cover this population.
Under the proposal, nondisabled beneficiaries at or below the poverty level would be moved to a version of Massachusetts' Medicaid program that does not cover long-term support and services, such as personal care attendants.
The CMS did not say why it denied this request.
Massachusetts has seen its Medicaid and Children's Health Insurance Program population jump more than 30% since it expanded Medicaid under the Affordable Care Act. In total, Medicaid covers 1.9 million Massachusetts residents, or one-third of the state's population.
Virgil Dickson reports from Washington on the federal regulatory agencies. His experience before joining Modern Healthcare in 2013 includes serving as the Washington-based correspondent for PRWeek and as an editor/reporter for FDA News. Dickson earned a bachelor's degree from DePaul University in 2007.
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