On September 26, 2019 the Senate approved H.R. 4378, the Continuing Appropriations Act, 2020, and Health Extenders Act of 2019, which would fund the federal government through November 21, 2019. The House has already approved the legislation, and President Trump is expected to sign the bill. The legislation includes a number of health program
Medicaid Rebate
Legislation to Modify Medicaid Drug Rebate Policies, Extend Medicaid Health Provisions Advances in Congress
The House of Representatives has overwhelmingly approved H.R. 3253, the Empowering Beneficiaries, Ensuring Access, and Strengthening Accountability Act, which would finance extension of various Medicaid-related health programs by increasing manufacturer Medicaid drug rebate obligations. In terms of health programs, the legislation also would, among other things:
- Extend the “Money Follows The Person Rebalancing Demonstration”
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Medicaid Legislation with Medicaid Rebate Misclassification Penalty Heads to President Trump
The House and Senate have both approved H.R. 1839, the Medicaid Services Investment and Accountability Act of 2019, clearing it for President Trump’s signature. Notably, the legislation would: subject drug manufacturers to a new civil monetary penalty (CMP) for knowingly misclassifying or misreporting covered outpatient drugs under a Medicaid drug rebate agreement (such as by knowingly submitting incorrect drug product information). The penalty would equal up to two times the difference between the rebate amount the manufacturer paid and the amount the manufacturer would have paid if the drug had been correctly classified. The CMP would be imposed in addition to any other penalties or recoveries. Furthermore, the legislation would strengthen requirements for recovery of unpaid rebate amounts, without regard to whether the manufacturer knowingly made the misclassification or should have known that the misclassification would be made, and it dedicates funding to improve oversight and enforcement of drug rebate obligation compliance. These provisions would take effect on the date of enactment, and would apply to covered outpatient drugs supplied by manufacturers under rebate agreements on or after the enactment date.
The bill also would:
Continue Reading Medicaid Legislation with Medicaid Rebate Misclassification Penalty Heads to President Trump
CMS Clarifies Regulatory Requirements for Line Extension Drug Medicaid Rebate Calculations
The Centers for Medicare & Medicaid Service (CMS) has issued regulations to address revised statutory requirements related to manufacturer calculation of Medicaid drug rebates. Specifically, CMS recently published an interim final rule with comment period that revises the regulatory text at 42 CFR § 447.509(a)(4) to reflect Bipartisan Budget Act (BBA) of 2018 language…
Trump Administrations’ Proposed FY 2020 Budget Targets Prescription Drug Prices
Reducing prescription drug prices is a major theme in the Trump Administration’s fiscal year (FY) 2020 budget proposal, with policies intended to increase competition, encourage better negotiation, incentivize lower list prices, and cut out-of-pocket costs for beneficiaries. The Administration’s projected savings from its designated prescription drug budget proposals top $69 billion over 10 years, although that does not include savings for provisions for which the budget impact was not available or that were included in other sections of the budget (e.g., a Medicaid State Drug Utilization Review provision within the Medicaid budget section).
We summarize below the major prescription drug pricing and related proposals in the President’s proposed budget, covering Medicare Parts B and D, Medicaid, and the 340B discount drug program. All budget savings reflect the 10-year period of FYs 2020-2029. Note that while most of these provisions would require legislative approval, Congressional committees have already held several hearings this year on prescription drug pricing. Stay tuned for more action in this area.
Major Medicare Part B Proposals
The proposed Trump budget would:
Continue Reading Trump Administrations’ Proposed FY 2020 Budget Targets Prescription Drug Prices
Trump Administration’s Proposed FY 2019 Budget Targets Medicare, Medicaid for Savings, Seeks (Again) to Repeal/Replace ACA
The Trump Administration has released its fiscal year (FY) 2019 budget proposal, which includes extensive health policy provisions. While most of the President’s policy proposals for Department of Health and Human Services (HHS) programs would require Congressional approval, others are characterized as administrative proposals that presumably would not involve Congress.
Continue Reading Trump Administration’s Proposed FY 2019 Budget Targets Medicare, Medicaid for Savings, Seeks (Again) to Repeal/Replace ACA
CMS Delays Expanding Medicaid Rebate Program, Price Reporting Requirements to Territories Until 2020
CMS has announced that it is delaying until April 1, 2020 its controversial change in the definitions of “States” and “United States” included in the February 1, 2016 Medicaid covered outpatient drug final rule with comment period. Specifically, in that rulemaking CMS defined “States” and “United States” to include the U.S. territories (American Samoa, the …
CMS Guidance Addresses Impact of Value-Based Purchasing on Medicaid Drug Rebates
CMS has received questions from manufacturers regarding whether price concessions and services offered to payers within Value-Based Purchasing (VBP) arrangements in the pharmaceutical marketplace could impact their drug’s Medicaid best price and increase their Medicaid rebate obligations. In recent guidance, CMS notes that, in general, prices included in best price include all prices, such…
OIG Releases Mid-Year Update to its FY 2016 Work Plan
The HHS OIG has updated its FY 2016 Work Plan to reflect new and/or completed items since initial release of the FY 2016 Work Plan in November 2015. For instance, the mid-year update indicates that the OIG plans to conduct several new Medicare reviews, including reviews regarding:
Continue Reading OIG Releases Mid-Year Update to its FY 2016 Work Plan
CMS Releases Long-Awaited Final Medicaid Covered Outpatient Drug Rule
After months of speculation and waiting, CMS yesterday released its final rule to revise Medicaid reimbursement for covered outpatient drugs and reform Medicaid drug rebate requirements. While we are still digesting what the rule means for drug manufacturers and other health care providers, we promise a full analysis of the final rule, as well as…
Pending Budget Deal Includes Medicare Sequestration Extension, Other Medicare/Medicaid Cuts
Outgoing House Speaker John Boehner and the Obama Administration have reached agreement on a two-year, $80 billion budget/debt-ceiling deal that includes Medicare and Medicaid “offsets” to finance other spending. For instance, while the budget would provide $80 billion in discretionary spending sequestration relief over two years, it would extend Medicare sequestration for an additional year, through 2025. The deal also would:
Continue Reading Pending Budget Deal Includes Medicare Sequestration Extension, Other Medicare/Medicaid Cuts
OIG Examines Medicaid/Part D Drug Rebate Policy
The OIG has issued a report, Medicaid Rebates for Brand-Name Drugs Exceeded Part D Rebates by a Substantial Margin,” comparing statutory Medicaid rebate amounts for brand name drugs with rebates Part D plan sponsors negotiate with drug manufacturers for such drugs. Based on 2012 data, the OIG determined that total rebates under Medicaid were…
Medicaid Drug Rebate Disputes between Manufacturers & States are Limited, OIG Finds
A recent OIG report, “Medicaid Drug Rebate Dispute Resolution Could Be Improved,” focuses on the extent to which drug manufacturers and states disagree on the amount of money that manufacturers owe states in Medicaid rebates, and how such disputes are resolved. Most states providing data (29 of 31) estimated that only a small…
OIG Highlights Inconsistencies in State Reporting of the Federal Share of Medicaid Drug Rebates
The OIG issued a report today entitled “Inconsistencies in States’ Reporting of the Federal Share of Medicaid Drug Rebates.” States are eligible for higher federal financial participation (FFP) rates for certain Medical Assistance services, such as those related to family planning, Indian Health Services, and breast and cervical cancer care. Based on prior…
State Collection of Medicaid Rebates for Drugs Paid Through Medicaid MCOs
The OIG has examined the extent to which states collect accurate drug utilization data and associated drug manufacturer rebates for drugs paid through Medicaid managed care organizations (MCOs). According to the OIG, this data is important to enable states to realize the full savings under an ACA provision that requires drug manufacturers to pay…
President Obama Proposes FY 2013 Budget
On February 13, 2012, President Obama released his proposed fiscal year (FY) 2013 budget. The budget includes a number of legislative proposals – some of which were included in the President’s September 2011 deficit reduction plan — that would reduce Medicare spending by $302.8 billion and cut Medicaid spending by $55.7 billion over 10 years. Highlights are available after the jump.
Continue Reading President Obama Proposes FY 2013 Budget
CMS Releases Long-Awaited Proposed Rule to Implement ACA Medicaid Manufacturer Rebate and Pharmacy Reimbursement Provisions
On Friday, January 27, 2012, the Centers for Medicare & Medicaid Services (“CMS”) released its long-awaited proposed rule to implement the provisions of the Affordable Care Act (“ACA”) relating to pharmaceutical manufacturer payment of Medicaid rebates and limits on Medicaid reimbursement to pharmacies. The proposed rule addresses a number of important policy issues relevant to pharmaceutical manufacturers, pharmacies, and other providers, and also would pose significant operational challenges for pharmaceutical manufacturers with respect to the Medicaid Drug Rebate Program (“MDRP”).
Continue Reading CMS Releases Long-Awaited Proposed Rule to Implement ACA Medicaid Manufacturer Rebate and Pharmacy Reimbursement Provisions
OIG Highlights Medicaid Rebate Program, Indian Health Services (IHS) Issues
The OIG has created a “spotlight page” on its website to highlight its reports and findings involving the Medicaid drug rebate program. The page features comparisons of drug spending under Medicaid and Medicare Part D, manufacturer compliance with Average Manufacturer Price reporting requirements, manufacturer development of new versions of existing brand-name drugs to minimize rebate…
OIG Reports on Medicaid Drug Rebates: Rebate Collections, Impact on Medicaid Prices
The HHS Office of Inspector General (OIG) has issued two recent reports on the Medicaid drug rebate program. In “Nationwide Rollup Report for Medicaid Drug Rebate Collections,” a follow-up to a 2005 report, the OIG examined the extent to which states strengthened controls over the collection of rebates on single-source drugs administered by…
OIG Compares Medicare Part D and Medicaid Drug Rebates
An HHS Office of Inspector General (OIG) report released August 16, 2011 found that Medicaid’s net unit drug costs (i.e., pharmacy reimbursement minus rebates) were much lower than under Medicare Part D because of substantially higher Medicaid rebates for brand-name drugs. Specifically, while Part D sponsors and state Medicaid agencies paid pharmacies similar prices for …