CMS decides Okla., Mass. Medicaid modification requests

This week, the Centers for Medicare & Medicaid Services decided on two states’ requests to modify their Medicaid programs.

And the administration gave one a thumbs up and the other a thumbs down.

The CMS denied Massachusetts’ request (PDF) to limit certain expensive Medicaid drugs covered under the state’s program. The agency also denied the state’s request to move Medicaid beneficiaries with incomes over 100% of the poverty line to the state’s marketplace, which would have increased federal reimbursements to the state.

At the same time, Oklahoma’s Medicaid program became the first to win approval from the federal government to negotiate supplemental rebate agreements involving value-based arrangements with drug manufacturers, which have the goal of increasing rebates for the state if patient outcomes don’t improve.

“Oklahoma’s plan for value-based drug contracts is an important example of how states can innovate to bring down drug costs,” HHS Secretary Alex Azar said in a statement. “The Trump Administration is committed to giving states the flexibility they need to make healthcare more affordable, and strongly supports innovations like value-based purchasing for prescription drugs.”

And while the decisions have been compared to each other, one healthcare lawyer said there was an important legal distinction between the two requests.

“Oklahoma had requested assurances that a value-based payment model developed via a supplemental rebate would not reset best price,” Ross Margulies, a healthcare attorney at Foley Hoag, told FierceHealthcare. “This was a policy clarification for CMS; the agency did not have to exercise its waiver authority to waive any existing Medicaid law.”

However, Massachusetts asked to waive the legal requirement that a state generally cover all medically appropriate drugs but still be entitled to statutory rebate payments from manufacturers.

“The CMS found you can’t pick and choose,” he added.

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