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Trump Administration Rejects Mass. Plan To Curb Medicaid Drug Prices

The Trump administration has rejected a request from Massachusetts to choose drugs covered by the state's Medicaid program based on cost and how well they work. The stated problem, spelled out in a letter from the Centers for Medicare and Medicaid Services (CMS), was that Massachusetts planned to keep collecting pharmaceutical rebates while excluding some drugs.

The Massachusetts proposal, described as the "vanguard" of state efforts to control rising pharmaceutical costs within Medicaid, might have established a market-driven model for other programs.

"This is disappointing for Massachusetts and for a lot of other states that really want to do something similar," said Matt Salo, executive director of the National Association of Medicaid Directors. "State Medicaid programs need more market leverage to be able to bring the cost of exorbitantly priced drugs down."

And Salo says the decision contradicts President Trump's pledge to curb rising drug prices.

"The White House blueprint on prescription drugs talks a lot about Medicaid and Medicare and this was an opportunity to put the Medicaid piece into action," Salo said, "and we didn't see that."

CMS did approve a less controversial Medicaid drug pricing control plan out of Oklahoma. It will let that state negotiate additional rebates through value-based purchasing agreements that hold drug manufacturers accountable for the success or failure of their drugs.

Both CMS and the Baker administration issued statements saying they remain committed to finding ways to control pharmacy costs. Those costs doubled for MassHealth during the past five years, from $1.1 billion to $2.2 billion.

The drug formulary was part of a proposed amendment Massachusetts sought to its existing Medicaid waiver. CMS approved a piece of the request — to let disabled veterans stay on MassHealth even if an annual $2,000 payment pushes them above the income eligibility threshold. But other key elements of the amendment were also rejected.

The Baker administration will not be able to limit physician and hospital choices for MassHealth members who do not join an Accountable Care Organization (ACO), a change CMS says was designed to encourage movement. And CMS said no to Baker's bid to move about 140,000 members who earn more than 100 percent of the federal poverty level from MassHealth to ConnectorCare. The shift would have triggered a higher federal reimbursement rate and saved the state about $120 million a year.

Baker had said these residents would not see any major change in coverage, but some consumer advocates disagreed.

"People moving from MassHealth to ConnectorCare would encounter increased enrollment barriers and perhaps increased costs," said Suzanne Curry, associate director for policy and government relations at the consumer advocacy organization Health Care for All. "It could provide a lot of disruption in care for folks moving from one program to another."

Neither the House nor the Senate have included transferring members from MassHealth to ConnectorCare in health care bills that have passed each chamber. MassHealth currently covers 1.86 million Massachusetts residents.

Martha Bebinger Twitter Reporter
Martha Bebinger covers health care and other general assignments for WBUR.

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