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The rule from the Centers for Medicare & Medicaid Services released Tuesday is intended to enable the agency to better monitor and enforce requirements surrounding state Medicaid expenditures. The proposal comes after calls from oversight organizations and Congress for greater transparency for state Medicaid supplemental payments.

“We have seen a proliferation of payment arrangements that mask or circumvent the rules where shady recycling schemes drive up taxpayer costs and pervert the system,” said CMS Administrator Seema Verma, in a statement.

Verma is referring to a practice where states make additional payments above normal reimbursement for billed services under Medicaid. The federal government pays states a matching rate of between 50% to 83% for Medicaid services, and the matching rate could increase based on the amount of state contributions.

In the federal fiscal year 2016, states made $48.5 billion in supplemental payments, according to an April 2019 report from the Senate Finance Committee. The federal share of supplemental payments was $27.8 billion, about 57% of the $48 billion. The Government Accountability Office also said back in 2015 that data on supplemental payments from states is lacking and needs oversight.

The agency has become aware of some states using these supplemental payments to garner a higher federal match. For example, some states have used a loophole to tax Medicaid managed care entities 25 times higher for Medicaid business than for similar commercial business, the agency said.

States can then use the tax revenue to cover supplemental payments, so they could get a higher federal rate without having to boost state spending, CMS added.

Other schemes including “certified public expenditures, provider taxes, and provider donations that provide additional payments to institutions with no clear link to improving care for patients,” CMS said in its release.

The Senate Finance Committee’s report found that CMS does a poor job of tracking these supplemental payments. States must report Medicaid expenditures via a form to CMS, but the form “does not collect sufficient information to adequately illustrate the distribution of supplemental payments,” the report said.

CMS’ proposed rule aims to improve reporting to help CMS track and monitor supplemental payments. The rule also proposes new regulatory definitions for base and supplemental payments to help CMS enforce statutory requirements around the state share of Medicaid expenditures.

“It would also clarify definitions and processes associated with provider ownership categories to close loopholes that have allowed states to attempt to inappropriately fund their share of Medicaid expenditures and to be more consistent with the statute,” CMS added.

States would also have to sunset supplemental payments and any tax waivers after no more than three years.

The proposed rule will be open for comment for 60 days.

https://www.fiercehealthcare.com/payer/cms-seeks-to-crack-down-schemes-used-by-states-to-get-higher-federal-match

Gossamer Bio in Agreement with Merck for Solid Tumor Studies

Gossamer Bio said it is in a clinical collaboration agreement with Merck & Co. Inc. (MRK) to evaluate the combination of Gossamer’s investigational candidate GB1275 and Merck’s Keytruda in patients with advanced solid tumors.

Gossamer will conduct a Phase 1/2 study, Keynote-A36, in advanced solid tumors, with the Phase 1 consisting of dose escalation of three GB1275 regimens including one with Keytruda. The Phase 2 consists of expansion cohorts evaluating GB1275 in combination with Keytruda or chemotherapy.

The KEYNOTE-A36 Phase 1/2 trial is underway, enrolling patients in the U.S. and U.K. to treat solid tumor types, including pancreatic, gastric, esophageal, colorectal, prostate and triple negative breast.

Gossamer said it expects to report initial data from the Phase 1 portion of the study in the second half of 2020.

https://www.marketscreener.com/GOSSAMER-BIO-INC-54432568/news/Gossamer-Bio-in-Agreement-with-Merck-for-Solid-Tumor-Studies-29565081/

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Tuesday, November 12, 2019