The newsletter covers SUPPORT Act guidance; Hill budget framework deal; drug pricing; Utah denied partial expansion funding.

Bi-Weekly Update
July 30, 2019
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NAMD 2019 Fall Conference
November 11-13
Washington Hilton, Washington, D.C.



Regulatory Update


CMS Releases SUPPORT Act Guidance on New NAS Treatment Settings; IMD Exclusion Exemptions for Pregnant Women in SUD Treatment
On July 26, the Centers for Medicare and Medicaid Services (CMS) issued two pieces of guidance stemming from provisions in the SUPPORT Act, the opioid package passed by Congress last year.

The first Informational Bulletin describes how states can take advantage of a new provider type defined at Section 1007 of the Act. This new provider type, called a Residential Pediatric Recovery Center (RPRC), is designed to provide services to infants diagnosed with Neonatal Abstinence Syndrome (NAS), as well as the mothers and caregivers of such infants.

  • Notably, RPRCs are intended to serve NAS infants who have no other significant medical risks. The guidance states that unless the RPRC is located in a facility for which Medicaid is already allowed to pay for room and board (such as an inpatient hospital), federal match would not be available. However, states have flexibility to use other Medicaid authorities to cover RPRC services in a variety of community-based facilities.
  • Also of note is that Medicaid match can be made available for RPRC services provided to non-Medicaid eligible individuals who are caregivers of NAS infants, so long as the services are otherwise covered in the state plan and are provided for the direct benefit of the infant.
The second Informational Bulletin provides additional information on Section 1012 of the Act, which creates a limited exemption to the Institutions for Mental Disease (IMD) Exclusion for pregnant and postpartum women receiving SUD treatment in an IMD.
  • Specifically, the guidance notes the statutory change in the SUPPORT Act allowing federal match to remain available for Medicaid services provided outside of an IMD to pregnant women and up to 60 days postpartum. This match is available if the woman is Medicaid eligible on the basis of pregnancy prior to IMD admission or becomes Medicaid eligible while at the IMD.
  • This provision of the SUPPORT Act became effective upon its passage on October 24, 2018. 
CMS Publishes Report to Congress on Action Plan for SUPPORT Act’s SUD Housing Supports
On July 23, the Centers for Medicare and Medicaid Services (CMS) published a report to Congress on its action plan to implement strategies for providing housing-related supports, services, and care coordination services to individuals with SUD, as required by the SUPPORT Act. The report briefly reviews the evidence for the efficacy of supportive services for this population, Medicaid authorities states can use to provide these services (primarily via home- and community-based services waivers and/or managed care waivers), and recaps recent CMS guidance and activities in this area.
The report goes on to elaborate CMS’s plans for technical assistance to states in 2020 and 2021, including:
  • Individualized technical assistance;
  • Identification and dissemination of best practices in current Medicaid SUD delivery systems;
  • Create a state learning collaborative with tentative participation of 10 states; and
  • Develop guidance on performance measurement, reporting, and quality improvement for these services.
ASPE Issues RFI on Appropriate Access to Controlled Substances
On July 26, the Assistant Secretary for Planning and Evaluation (ASPE) issued a Request for Information seeking stakeholder perspectives on methods to ensure appropriate access to controlled substances while simultaneously preventing diversion and abuse. Comments are due by August 26, 2019.
The RFI is primarily centered on questions of law enforcement coordination and cooperation with the pharmaceutical industry, though it touches on issues such as clinical guidelines, use of Prescription Drug Monitoring Programs, and reporting on utilization of controlled substances, each of which may have implications for Medicaid agencies.




On the Hill
Congress, Administration Agree to Budget Deal Framework
Last week, Congressional leaders and the White House agreed to an overall framework to resolve this year’s looming budget issues. The deal would increase federal spending by $321 billion over the next two years, lifting otherwise mandatory spending caps on defense and non-defense spending put in place by the 2011 Budget Control Act (which will no longer be in effect after this two-year spending deal). Additionally, the budget framework will increase the federal debt ceiling for two years.
The House passed the framework on July 25 and went into August recess; the Senate is expected to pass the framework today and also go into recess. This sets the stage for both chambers to tackle the appropriations process upon return in September, which itself may create must-pass vehicles for other policies such as a drug pricing package.
Senate Finance Advances Drug Pricing Package, Including Several Medicaid Policies
Last Tuesday, the Senate Finance Committee (SFC) introduced its highly anticipated bipartisan prescription drug package, and marked up the package on Thursday. No significant amendments were adopted in the markup, and the Committee cleared the package on a bipartisan vote, though notably nine Republicans declined to support the deal. This suggests that the broader Republican caucus in the Senate may have misgivings about the approach, though the cost savings associated with many provisions presents an attractive option for offsets in a broader appropriations process.
In terms of policies, the package is far-ranging and touches on Medicare and Medicaid. In the Medicaid space, it includes policies such as:
  • Creating a new state plan option to enter into risk-sharing, value-based purchasing arrangements with genetic therapy manufacturers under which payment is made on an installment basis over up to five years, provided that the genetic therapy is expected to cure or reduce the symptoms of a rare disease after no more than three administrations. The state remains liable for installment payments over the lifetime of the agreement even if the beneficiary is no longer enrolled in Medicaid;
  • Prohibit Pharmacy Benefit Manager (PBM) spread pricing arrangements in Medicaid and require PBMs to tie their fees to an ingredient cost and professional dispensing fee that at least matches what the state would pay under the state plan;
  • Allow states to consider a drug, biological, or insulin provided on an outpatient basis under a bundled payment a “covered outpatient drug” for purposes of rebates;
  • Enhancing CMS’s authority to audit pricing and product information reported by manufacturers to the Medicaid Drug Rebate Program (MDRP);
  • Adopting a MACPAC recommendation to exclude authorized generics from Average Manufacturer Price (AMP) calculations, which will increase mandatory rebates for states;
  • Increasing the maximum rebate ceiling in the MDRP from 100 percent of AMP to 125 percent;
  • Requires CMS to use Transformed Medicaid Statistical Information System (T-MSIS) data to produce reports on drug utilization that compares drug prescribing patterns on a variety of dimensions, including costly chronic disease conditions, rare diseases, patient demographic characteristics, and others; and
  • New conflict of interest requirements for state Drug Utilization Review (DUR) Boards and Pharmacy and Therapeutics (P&T) Committees and a GAO report on conflicts of interest in current DUR Boards and P&T Committees.

Senate Finance Hearing Scrutinizes Nursing Facility Oversight
On July 23, the Senate Finance Committee (SFC) held a hearing titled “Promoting Elder Justice: A Call for Reform.” The hearing focused on current gaps in nursing facility oversight and quality reporting, driven partly by findings from Government Accountability Office (GAO) and U.S. Health and Human Services Office of the Inspector General (OIG) reports.

Committee members agreed that increased reporting requirements were needed, as well as the enforced use of national background checks in the hiring process. OIG testified that 13 states have yet to implement national background check systems, and loopholes still exist to allow potential offenders to be hired without undergoing a background check in all states. Members also criticized CMS’s Nursing Home Star Rating System, saying it was overly confusing for consumers and did not accurately portray quality and potential abuse issues.


Reports & Publications


NBER: Medicaid and Mortality: New Evidence from Linked Survey and Administrative Data
A recent study out of the University of Michigan found that mortality rates among low-income adults have declined in states that expanded Medicaid. Researchers used large-scale federal survey data linked to administrative death records to compare changes in mortality for near-elderly adults in states with and without the Affordable Care Act Medicaid expansion. In expansion states, roughly 4,800 fewer deaths occurred annually – equating to 19,200 deaths averted between 2014 and 2017 alone. If all states had expanded Medicaid, the study suggests that about 15,600 additional deaths could have been averted over this four-year period.
The full report is available here.


In the News


Trump Administration Rejects Utah Request for Partial Medicaid Expansion Funding
On Saturday, the Trump administration rejected Utah’s request to use federal funding to partially expand Medicaid. Earlier this year, Governor Herbert authorized a more limited Medicaid expansion plan than the full expansion approved by voters in November. CMS said they will not approve Utah’s request or similar waivers from other states to receive enhanced federal matching funds to cover a portion of the adult expansion group, arguing that a limited expansion “would invite continued reliance on a broken and unsustainable ObamaCare system.”


The full article is available here.


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