Although drug formularies are ubiquitous in Medicare and the private insurance market, they’re absent in Medicaid. By law, state Medicaid programs that offer prescription drug coverage (as they all do) must cover all drugs approved by the U.S. Food and Drug Administration, however expensive they are and however slim their clinical benefits may be.
Massachusetts would like to change all that. In a recent waiver proposal, Massachusetts asked the Centers for Medicare and Medicaid Services (CMS) to allow it to adopt a closed formulary in Medicaid. That would allow Massachusetts to exclude certain brand-name drugs from Medicaid, increasing its leverage in price negotiations beyond what it can achieve through existing utilization management techniques like prior authorization.
Among Medicaid advocates, the proposal is controversial. Some fear that state budgets would be balanced on the backs of Medicaid beneficiaries, who could be denied access to expensive therapies. But Massachusetts thinks there’s room to drive down drug spending without threatening access to needed medications. In any event, the state has to do something. Drug spending in Massachusetts has increased, on average, 13 percent annually since 2010, threatening to “crowd out important spending on health care and other critical programs.”
By all rights, CMS should welcome Massachusetts’s proposal. Closed drug formularies are tried-and-true, market-based approaches to fostering competition over drug prices, and the Trump administration’s Council on Economic Advisers recently released a report saying that “government policy should induce price competition” in Medicaid. If Secretary of Health and Human Services (HHS) Alex Azar means it when he says that “drug prices are too high,” letting Massachusetts try out a formulary makes a ton of sense. […]
Block grants are all the rage. Take the latest G.O.P. proposal to repeal and replace the Affordable Care Act: the Graham-Cassidy bill. It proposes to replace the current system and instead give grants to the states, essentially taking the funds the federal government now spends under the ACA for premium subsidies and Medicaid expansion and give those funds to the states as a lump sum with little regulation.
There is a complicated formula by which the bill proposes divvying up this money among the states. Many think the formula is unfair, that it benefits red states over blue states, and that it just flat isn’t enough money. These are incredibly important concerns. But let’s put them to the side for just a moment and consider the theory behind block granting. Is there any world, for instance assuming that the amount and allocation of the funding could be resolved (probably crazy talk), in which switching to block granting may actually improve upon the status quo?
Proponents of block granting health care make two main arguments. First, it will reduce costs. By block granting Medicaid and the ACA subsidies, we end the blank check open entitlement that these programs have become and give states more skin in the game. Second, these cost savings will come from empowering states to innovate. States will become more efficient, improve quality, and solve their own state-specific problems.
These arguments have an understandable appeal. But how will states really react to providing health care coverage on a budget? Continue reading
The Centers for Medicare and Medicaid Services (CMS) finalized a rule concerning home health agencies on January 9th, “Medicare and Medicaid Program: Conditions of Participation for Home Health Agencies.” The rule has been a long time coming, since the proposed rules were set forth on October 9, 2014. This is the first time that CMS has successfully updated the home health agency (HHA) conditions of participation (CoPs) since 1989.
revises the conditions of participation (CoPs) that home health agencies (HHAs) must meet in order to participate in the Medicare and Medicaid programs. The requirements focus on the care delivered to patients by HHAs, reflect an interdisciplinary view of patient care, allow HHAs greater flexibility in meeting quality care standards, and eliminate unnecessary procedural requirements.
According to CMS,
[t]hese changes are an integral part of [the Agency’s] overall effort to achieve broad-based, measurable improvements in the quality of care furnished through the Medicare and Medicaid programs, while at the same time eliminating unnecessary procedural burdens on providers.
As is likely well known to readers, the use of home health services in the United States is widespread. According to the National Center for Health Statistics, as of 2014, there were 12,400 home health agencies in the United States and, during 2013, 4.9 million patients in the United States received and ended care from home healthcare workers. These numbers have since risen, and today in the United States there are nearly 12,600 Medicare and Medicaid-participating home health agencies and more than 5 million patients. Home health care serves a wide range of purposes. The Medicare website touts it as “usually less expensive, more convenient, and just as effective as care you get in a hospital or skilled nursing facility (SNF).” In addition to serving the aims of treating illness or injury, according to Medicare home health care “helps [patients] get better, regain [their] independence, and become as self-sufficient as possible.” Some examples of what home health care providers do with and for patients, upon doctor’s orders, include: wound care, patient and caregiver education, intravenous or nutrition therapy, injections, monitoring patient health condition, monitoring patient drug and treatment use, teaching patients how to care for themselves, and coordinating care between the patient, their doctor, and any other caregivers. Continue reading
On Wednesday, the Centers for Medicare and Medicaid (CMS)—an agency within the Department of Health and Human Services (HHS)—released a final rule that “will revise the requirements that Long-Term Care facilities [LTCs] must meet to participate in the Medicare and Medicaid programs” (1). (Almost all LTCs receive funds from Medicare or Medicaid.) This is the first time that these requirements have been “comprehensively reviewed and updated since 1991” (6)—that is, in the past 25 years. One of the most striking changes to the regulation is found in §483.65, where CMS “require[es] that facilities must not enter into an agreement for binding arbitration with a resident or their representative until after a dispute arises between the parties” (12) which means that CMS is “prohibiting the use of pre-dispute binding arbitration agreements” (12). Among the reasons provided by CMS for this change is a recognition of the notable power differential between LTCs and their residents:
There is a significant differential in bargaining power between LTC facility residents and LTC facilities. LTC agreements are often made when the would-be resident is physically and possibly mentally impaired, and is encountering such a facility for the first time. In many cases, geographic and financial restrictions severely limit the choices available to a LTC resident and his/her family. LTC facilities are also, in many cases, the resident’s residence. These facilities not only provide skilled nursing care, but also everything else a resident needs. Many of these residents may reside there for a prolonged period of time, some for the rest of their lives. Because of the wide array of services provided and the length of time the resident and his/her family may have interactions with the LTC facility, disputes over medical treatment, personal safety, treatment of residents, and quality of services provided are likely to occur. Given the unique circumstances of LTC facilities, we have concluded that it is unconscionable for LTC facilities to demand, as a condition of admission, that residents or their representatives sign a pre-dispute agreement for binding arbitration that covers any type of disputes between the parties for the duration of the resident’s entire stay, which could be for many years. (402-403)
As The New York Times reported, when the rule was first proposed in July 2015, it was “aimed at improving disclosure.” But, this final version of the rule “went a step further than the draft, cutting off funding to facilities that require arbitration clauses as a condition of admission.”
According to the Centers for Disease Control and Prevention, more than 6.4 million US children 4-17 years old have been diagnosed with attention-deficit/hyperactivity disorder (ADHD). The percentage of US children diagnosed with ADHD has increased by 3-5 percent per year since the 1990s. Relatedly, the percentage of children in this age group taking ADHD medication also has increased by about 7 percent per year from 2007-2008 to 2011-2012.
In response, some state Medicaid programs have implemented policies to manage the use of ADHD medications and guide physicians toward best practices for ADHD treatment in children. These policies include prescription medication prior authorization requirements that restrict approvals to patients above a certain age, or require additional provider involvement before approval for payment is granted.
In a new article published this afternoon in MMWR, CDC researchers compared Medicaid and employer-sponsored insurance (ESI) claims for “psychological services” (the procedure code category that includes behavior therapy) and ADHD medication among children aged 2–5 years receiving clinical care for ADHD.
The article references a newly released LawAtlas map that examines features of state Medicaid prior authorization policies that pertain to pediatric ADHD medication treatment, including applicable ages, medication types, and criteria for approval.
By Dalia Deak
Yesterday, the Centers for Medicare & Medicaid Services (CMS) issued a notice that affirmed CMS’s commitment to provide prescription drugs to beneficiaries, specifically highlighting beneficiaries suffering from hepatitis C virus (HCV). The notice comes at a moment of heightened interest in the cost of prescription drugs (particularly on the federal level as an inquiry in the Senate has been initiated regarding rising drug prices).
In the statement, CMS:
- Reminded the states of their obligation, under the terms of the Social Security Act, that Medicaid programs must cover prescription drugs for medically accepted indications if the manufacturer of the drug is a manufacturer with whom they have rebate agreements with;
- Discussed the concern regarding costs of direct-acting antiviral (DAA) HCV drugs, emphasizing the role of competition and negotiation in bringing down the drugs’ prices;
- Expressed concern regarding some states’ policies to restrict access to the DAA HCV drugs that may be contrary to their obligations under the Social Security Act;
- Encouraged states to ensure that their policies do not unreasonably restrict coverage of effective treatment;
- Reminded states that drugs available under the states’ fee-for-service programs must also be available to beneficiaries of Medicaid managed care organizations; and
- Indicated that CMS will monitor state Medicaid policies for DAA HCV drug coverage to ensure that they are compliant with approved state plans, statutes, and regulations.
CMS also followed up its notice with a letter to the CEO of AbbVie asking for additional information regarding the types of value-based purchasing arrangements offered to payers and to state Medicaid agencies by December 31, 2015.
By Kate Greenwood
[Cross-posted at Health Reform Watch]
Given the health law and policy topics that are this blog’s usual fare, some of you may have missed the fact that earlier this month the eighty-eighth annual Miss America pageant was held here in New Jersey, at Boardwalk Hall in Atlantic City. And you may have also missed it (I did) when, this past July, Miss Idaho, Sierra Sandison, a Type 1 diabetic, became a social and traditional media sensation after she competed in the swimsuit competition with her insulin pump clipped to her bikini bottom, visible for all to see. Sandison started a hashtag, #showmeyourpump, inspiring Type 1 diabetics from around the world to post photos of themselves with their pumps.
Although Sandison was the first contestant to compete in the Miss America pageant with her pump visible, she is not the first contestant with Type 1 diabetes, or the first to rely on a pump. In 1998, both Deana Herrerra, Miss New York, and Nicole Johnson, Miss Virginia, had the disease, and both relied on pumps to control it. Johnson went on to be crowned Miss America 1999, with a platform of diabetes awareness. Johnson explained to the Philadelphia Inquirer that, before getting the pump, “‘I stuck myself four or five times a day. I was getting scar tissue. I was feeling depressed, and I thought, `I’m never going to have an iota of freedom.'” Since getting the pump, Johnson said, “‘Now, I control the diabetes.”’
Sierra Sandison’s decision to wear her diabetes pump on her hip both contributed to and was the result of a trend toward greater acceptance of medical devices and our need for them. (As Miriam Tucker reported at NPR, “Amputees are increasingly using visible prostheses rather than covering them up. And the ostomy community has its own version of the ‘show me’ campaign.”) Nicole Johnson told Tucker that “‘Our culture seems to be more accepting today, as opposed to when I was diagnosed in 1993.'”
Perhaps unsurprisingly, the increase in acceptance has not translated into easy or uniform access to the medical devices that help diabetics manage their disease, including insulin pumps, insulin pens, and continuous glucose monitors. Continue reading
Many health law profs have wondered about how state officials can turn down bucketloads of federal money, without suffering the ire of their local constituents. In states like Arizona, that frustration was spoken most vocally by the local healthcare industry and their employees, who have the most to gain from the expansion of coverage, even if the Medicaid beneficiaries are unlikely to themselves have political clout.
Well, over at the New Yorker, Sam Wang has now compiled the polling data for the gubernatorial races to ask whether “In Swing States, Is Obamacare an Asset?” This graphic tells the whole story, focusing on states where Republican incumbents who made Medicaid-expansion decisions are now up for re-election:
Although voters respond to a mix of positions and personalities, and these are only nine states, it is striking that the governors who declined federal money to cover their most vulnerable are also the most vulnerable at the polls.
By Kate Greenwood
Cross-Posted at Health Reform Watch
Nearly three years ago, in July of 2011, Tara Adams Ragone wrote a blog post for Seton Hall Law’s Health Reform Watch blog entitled “Community Based Medicaid ACOs in New Jersey: A Signature Away”. As Professor Ragone explained, a month earlier the New Jersey legislature had passed Senate Bill 2443, which established a Medicaid accountable care organization (ACO) demonstration project, but Governor Chris Christie had not yet signed it. “It’s an exciting time for growth and innovation in the Garden State,” Professor Ragone wrote, “if we just get that signature.”
Governor Christie did go on to sign Senate Bill 2443 into law, in August of 2011, but the implementation process has been protracted. The act required the Department of Human Services to “adopt rules and regulations” that provided for oversight of the quality of care delivered to Medicaid recipients in the ACOs’ designated geographic areas and set standards for the gainsharing plans that participating ACOs must develop. The deadline for adopting the regulations was in June of 2012, but they were first issued, in draft form, in May of 2013. The final regulations were not adopted until earlier this week, one day before the proposed regulations were due to expire.
As Andrew Kitchenman reports here, with the regulations in place, the three community-based organizations that have been preparing to launch Medicaid ACOs, one in Camden, one in Trenton, and one in Newark, can finally get started. Unlike the State, they will have to move quickly; the deadline for applying to participate in the three-year demonstration is July 7th.
There is, in Kitchenman’s words, “a final piece to the puzzle”—the participation of managed care organizations (MCOs). Continue reading
[Ed. Note: On Friday, May 2 and Saturday, May 3, 2014, the Petrie-Flom Center hosted its 2014 annual conference: “Behavioral Economics, Law, and Health Policy.” This is an installment in our series of live blog posts from the event; video will be available later in the summer on our website.]
In this next installment of today’s live-blogging of the conference (and with all of the caveats of live-blogging mentioned by my colleagues and my apologies for any errors or misrepresentations) we have Professors David Hyman (DH), Mark White (MW) and Andrea Freeman (AF) in a panel moderated by Glenn Cohen (GC) on the “Potential Problems and Limits of Nudges in Health Care”.
The panel began with DH, H. Ross & Helen Workman Chair in Law and Director of the Epstein Program in Health Law and Policy, University of Illinois College of Law, and a talk entitled, “what can PPACA teach us about behavioral law and economics” (Patient Protection and Affordable Care Act). DH began with the observation that nudges often work quite well… “unless they don’t”. While many nudges are “sticky”, i.e. they influence behavior in the way they were intended, others are “slippery”, i.e. they fail to influence behavior in the way they were intended. His talk set out to illustrate the phenomenon, and to pose two questions. The first was an empirical question: what makes a nudge sticky vs slippery? The second was philosophical: is it meaningful to talk about a “failed nudge” or when we do, do we really just mean failed marketing? He focused on an analysis of PPACA as a case study.
According to Professor Wilson R. Huhn of the University of Akron School of Law, the Ohio governor’s action expanding Medicaid in Ohio is valid. He writes:
On Monday, October 22, at the urging of Governor Kasich, the Controlling Board of the Ohio Legislature voted 5-2 to accept $2.5 billion in federal funding to expand Medicaid in the State of Ohio. Under the laws of Ohio this action was valid.
The Controlling Board is a state agency created by statute. The agency has two principal powers: it can transfer funds and authorize purchases by state agencies, and it can decide to accept federal funding on behalf of these agencies. Section 131.35(A)(5) of the Ohio Revised Code states: “Controlling board authorization for a state agency to make an expenditure of federal funds constitutes authority for the agency to participate in the federal program providing the funds ….”
Two advocacy organizations (the Buckeye Institute and the 1851 Center for Constitutional Law) as well as several Ohio lawmakers have announced that they intend to challenge the legality of the action of the Controlling Board. They contend that the action of the Board violates Section 127.17 of the Ohio Revised Code, which provides that the Board is bound by the intent of the Ohio General Assembly. The challengers quite correctly point out that both houses of the General Assembly voted not to accept federal funding to expand Medicaid. Governor Kasich vetoed this bill, but the challengers argue that despite the Governor’s veto it’s clear that the General Assembly did not want the Controlling Board to accept federal funding to expand Medicaid.
After the NFIB decision in June, Maine tried to expand Justice Roberts’ remedy to also make the “maintenance of effort” provision optional for states. Maine was unsuccessful in the First Circuit with the argument, for procedural reasons. Prior coverage here.
The Obama Administration is sticking to the letter of the law, and announced Tuesday that it is refusing to allow cuts for Medicaid beneficiaries at or below 133% (138% after the 5% income disregard) of FPL in Maine.
Maine has not yet announced whether it will take the case back to the First Circuit. With Huberfeld & Leonard, we’ve argued at length (see esp. pp. 75-83) that Maine does not have the winning argument, in an article to be published in the BU Law Review later this month. SSRN version here. The short version is that MOE is a common tool to lock-in states during transition to a new program, was discussed in the briefing, but was not part of the coercion analysis in Justice Roberts’ plurality. The key provision was 42 USC 1396c, the Secretary’s authority to reduce some or all of the funding to non-compliant states. But we will see if Maine wants to argue the substance of this point at the First Circuit.
You may be thinking “DOMA? Hello, this is HEALTH LAW.” Please stick with me for a moment. The Supreme Court appears to be collecting petitions for certiorari regarding the Defense of Marriage Act, likely to determine which circuit’s decision is the best vehicle for considering the constitutionality of this federal law. One such petition results from the First Circuit’s decision in Massachusetts v. Department of Health and Human Services/Hara v. Office of Personnel Management, which held that section 3 of DOMA violated the Fifth Amendment’s Equal Protection Clause. The court reasoned that promoting marriage is not rationally related to denying federal benefits to same-sex couples, thereby avoiding the creation of a new category of suspect class. The twist is that the state of Massachusetts also claims that section 3 of DOMA, which denies federal economic benefits to same-sex couples, exceeds Congress’s Spending Clause authority and infringes the state’s 10th Amendment rights. While the First Circuit did not agree with the state on these points, it did incorporate federalism concerns into its Equal Protection Clause analysis by noting that states traditionally have defined marriage, therefore the federal government cannot protect the state of Massachusetts from its own definition of marriage by promoting heterosexual marriage. Continue reading
A recent Utah Court of Appeals decision is very much worth calling to the attention of those interested in access to health care and in disability rights. As financial pressures on Medicaid increase, and as Medicaid plays a increasingly important role in health reform, states are likely to consider ways of restricting services in order to manage costs. Alexander v. Choate, 469 U.S. 287 (1985), has long stood for the assumption that cutbacks in Medicaid funding are very difficult to challenge as disability discrimination. In the near future, it will be critical for advocates on behalf of people with disabilities both to challenge this assumption and to consider other ways of arguing that funding cutbacks under the Medicaid program are legally problematic.
Conley v. Department of Health, Division of Medicaid and Health Financing, 2012 Ut. App. 274 (Sept. 27, 2012), is a challenge to the denial of benefits for “speech augmentative communication devices (SACDs)” for non-pregnant Medicaid recipients over the age of 21. These are electronic speech aids used by people with conditions such as cerebral palsy who cannot make themselves heard due to motor difficulties. The ALJ hearing the case had concluded that it was reasonable for the Utah Medicaid Program to provide these devices to persons under the age of 21 and to pregnant women, but not to others qualifying for Medicaid. The ALJ’s reasoning was that federal regulations and case law allow state Medicaid to use a “utilization control procedure” in deciding what benefits to provide. Continue reading
The Pacific Legal Foundation seems unable to face its defeat before the Court in June. The PLF has filed a motion seeking leave to amend a complaint on behalf of a small business owner who would have the ACA declared unconstitutional based on the theory that the law was introduced in the Senate, not the House. Article I section 7 of the Constitution commands that “All bills for raising revenue shall originate in the House….” This plaintiff, Matt Sissel, originally filed a complaint challenging the constitutionality of the ACA as exceeding Congress’s commerce power; but, because the Court decided that the ACA is constitutional as an exercise of tax authority in part because it raises revenue, the plaintiff seeks to amend his complaint rather than allow it to be dismissed based on the decision in NFIB v. Sebelius.
It seems ironic that this novel filing made news the same day that the Census Bureau reported that the number and the percentage of uninsured Americans dropped for the first time since 2007. The drop is largely attributed to young adults being permitted to stay on their parents’ insurance policies under new ACA requirements. While the drop is movement in the right direction, it is hardly a victory given that nearly one in six Americans still lack health insurance coverage and the percentage of Americans on Medicaid has increased due to the ongoing effects of the Great Recession. Nevertheless, it is a small taste of the positive outcomes that the ACA may produce if the federal government could stop defending the law and instead focus on implementing it.
Though it seems unlikely that lower federal courts will be interested in the obscure constitutional provision PLF relies on, as I have said before, the administration needs to learn from the nonchalance with which it initally treated challenges to the ACA. The novelty or obscurity of the challenger’s theory does not correllate to failure with the Roberts Court, which has proven itself willing to accept new legal theories and willing to ignore or modify precedent.
[cross-posted from HealthLawProf Blog]