The
Medicaid block grants aim to serve non-elderly adults by giving states
flexibility on drug formularies and benefit packages.
January 30,
2020 - Updated 1/30/20: This article has been
updated to include a statement from Avalere.
The Trump
Administration announced a
Medicaid block grant initiative called Healthy Adult Opportunity, which serves
adults under the age of 65 who are ineligible for long term care and whose
Medicaid coverage is optional in their state.
“This opportunity is
designed to promote the program’s objectives while furthering its
sustainability for current and future beneficiaries, and achieving better
health outcomes by increasing the accountability for delivering results,” said
CMS Administrator Seema Verma.
A block grant
allocates a certain amount of money to a state which can then be used almost
entirely without federal interference. While the announcement never uses the
term “block grant,” it allows participating states to have enormous flexibility
on how they spend funds for non-elderly adults.
“Subject to
comprehensive expectations for minimum standards for approval of a Healthy
Adult Opportunity demonstration, states will also have the opportunity to
customize the benefit package for those covered and make needed program
adjustments. This will be in real-time without lengthy federal bureaucratic
negotiations or interference,” said the press release, emphasizing the freedom
from federal oversight.
That being said, CMS
underscored that states will be held accountable for the results. Savings will
be shared between the states and federal government and the Medicaid block
grant sets financial metrics to provide a standard.
For the first time,
states can adopt a formulary like commercial payers’ which will enable them to
negotiate drug costs. Specifically, CMS offers protections for HIV and
behavioral healthcare treatments.
“One of the most
significant changes is how state Medicaid programs can manage prescription
drugs,” Margaret Scott, associate principal at Avalere, explained in a written
statement to HealthPayerIntelligence.com.
“States would be able
to develop closed formularies and exclude drugs from coverage, while continuing
to receive full manufacturer rebates. Despite protections for certain drugs
(i.e., mental health, HIV, opioid use disorder), we expect states could use the
formulary flexibility to develop formularies more similar to commercial plans.
This is a significant departure from the long-standing policy, which requires
states to cover all drugs for which manufacturers pay mandatory rebates.
Outside of changes to the drug benefit, these demonstrations could also allow
states to use alternate managed care oversight standards and change other
program elements (e.g., provider payment rates).”
Some of the
participating states’ flexibilities can be found in Section 1115 Medicaid
demonstrations but some are brand new. For example, states can implement
retroactive coverage periods, nominal premiums, and cost-sharing with this
grant. However, cost-sharing and premiums may not exceed five percent of a
family’s income.
Back in March 2019,
The Trump Administration proposed rolling
back Medicaid expansion, creating state Medicaid block grants, and drastically
cutting Medicare funding. The budget aimed to cut Medicare spending by $818
billion over the course of a decade and slash $1.5 trillion from Medicaid
spending. Block grants were expected to play a significant role in these cuts.
Tennessee was
the first state to put forward a Medicaid block grant proposal. Utah and Alaska
have also considered the option.
Opponents of the
program say that Medicaid block grants may allow states to use federal funding
to bolster state projects outside of Medicaid.
“The guidance lets
states divert federal Medicaid block grant funds from Medicaid to other state
programs,” Cindy Mann, a partner with Manatt Health, told HealthPayerIntelligence.com in
an emailed statement. “This enticement for states to opt into the
block grant adds to the risks from capped funding. Diversion would deepen
Medicaid cuts, adding to the access issues and squeezing already thin margins.”
But in the press
release, CMS stressed that the Medicaid block grants were designed to protect a
specific population and that the savings could spread improvements to the rest
of the participating states’ Medicaid programs.
“We’ve built in
strong protections for our most vulnerable beneficiaries, and included
opportunities for states to earn savings that have to be reinvested in
strengthening the program so that it can remain a lifeline for our most
vulnerable,” said Administrator Verma.
No comments:
Post a Comment