CMS Proposes Delay of Medicaid Changes

On Thursday, the Department of Health and Human Services and Centers for Medicare and Medicaid Services (CMS) posted a proposed rule. This new rule delays the implementation of two prior rules that had previously been approved via the APA rule making process. The new rule seeks delay of the implementation of rules regarding the “Medicaid Program; Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements”

The first rule that is being delayed, according to the proposed changes, is the inclusion of Medicaid programs in the US Territories in the Value Based Purchasing Medicaid Drug Reimbursement Program (VBP). The VBP’s intent is to standardize the amount that Medicaid programs pay for certain drugs, especially recent, expensive biologicals and other genetic based treatments, by establishing a nationwide minimum/ maximum pricing system. Currently this system is not applied to U.S. territories, including American Samoa, Northern Mariana Islands, Guam, Puerto Rico, and the Virgin Islands. The inclusion of these territories can cause issues in two ways. First, lower prices in Puerto Rico in comparison to the mainland states could result in a unanticipated drop in the minimum pricing systemwide. The other concern is that the Medicaid programs for the territories are not funded at the same levels as the programs in the contiguous states, so adding the territories could cause the territorial Medicaid programs to use funds faster than they are replaced under the current funding levels. The delay is suggested in order to correct the under-funding as well as allow manufacturers time to equalize their pricing offerings.

The second rule, rule 10.A, deals with process, computer documentation, and other changes being imposed on manufacturers of drugs in order to support the VBP pricing system. The changes are required to deal with patient access and privacy issues that arise as a part of the changes to the VBP system. CMS proposes to delay the start of this rule from 1/1/2022 to 7/1/2022 due to the additional logistical challenges caused by COVID-19 to ensure that there are no systemic errors in the implementation.