CMS Responds to Massachusetts Medicaid Waiver Requests

Last week, the Centers for Medicare and Medicaid Services (CMS) responded to the state’s 1115 Medicaid Waiver request that had been filed last September. As part of that filing, the Executive Office of Health and Human Services (EOHHS) had requested authority to permit non-disabled adults with incomes above 100% of the federal poverty level to be only eligible for subsidized insurance in the Connector exchange rather than through MassHealth. MHA had supported the proposal in conjunction with steps to ensure appropriate affordability standards and to guard against any loss of coverage. However, last week CMS rejected the request.
Also of note and garnering national attention was the EOHHS proposal to institute a “closed formulary” in the MassHealth program that, among other things, would enhance the agency’s ability to negotiate supplemental rebates with drug manufacturers. Currently, Medicaid programs participating in the federal Medicaid drug rebate program must include on their list of offered drugs nearly all FDA-approved drugs from a pharmaceutical company. This “open formulary” requirement often makes it challenging for states in negotiating additional rebates from drug manufacturers, which is one of the reasons EOHHS had made this proposal. CMS did not approve this request but indicated support for the state’s overall goal to lower drug costs.  In its letter, CMS stated it would be willing to consider an alternative proposal that would allow the state to exclude certain Medicaid-covered outpatient drugs from Medicaid coverage if the state were to negotiate directly with manufacturers and forgo all rebates available under the federal drug rebate program. 
CMS also did not approve proposals to implement narrower networks in MassHealth's Primary Care Clinician (PCC) program to encourage enrollment in Accountable Care Organizations and Managed Care Organizations.

In a positive development, CMS did approve the EOHHS request to waive state veteran annuities when determining income for MassHealth coverage. Massachusetts currently provides a $2,000 annual payment to disabled veterans and Gold Star parents and Gold Star spouses, which in some cases may have prevented the person or family from qualifying for Medicaid coverage.