Medicaid

In a typical year an estimated 30% of people with a bleeding disorder are enrolled in Medicaid. As a safety net program Medicaid covers some of the most vulnerable members of the bleeding disorders community. Hence, state and federal policy decisions regarding Medicaid are a top priority for NBDF’s Public Policy Department.

As with other health care payers state Medicaid agencies work to decrease their costs while still trying to ensure that patient care is not jeopardized. While thirty-nine states (including DC) have expanded Medicaid since it was authorized by the Affordable Care Act, twelve have not.1 Trends in Medicaid cost control measures have largely mirrored those of commercial payers including managed care, utilization management, changes in reimbursement, and narrower provider networks. States have also taken advantage of federal guidance to either limit Medicaid enrollment or restrict benefits through waivers by proposing enrollment premiums, work requirements, lifetime benefit caps, and using block grants.

Managed Care

Of the 76 million people in Medicaid, 71% are in managed care. Under a managed care model, Medicaid agencies contract with private health plans or other organizations to deliver and manage a recipients’ care. The plan/organization pays providers a capitated or per person rate for services.

While managing care from a medical benefits perspective is not of significant concern for the bleeding disorders community, capitating clotting factor therapies reimbursement rates can negatively impact the standard of care and treatment of those affected by bleeding disorders. Furthermore, it can have the exact opposite effect of managing health care costs for a Medicaid program.

In the past, NBDF, local chapters and associations, and our stakeholders, have been successful in working with states to “carve out” clotting factor from managed care programs. This means that clotting factor was still covered by Medicaid but paid for under the traditional fee-for-service model. By doing so, states remained eligible to receive a refund on the reimbursement (“federal rebate”) from manufacturers.

However, the Affordable Care Act (ACA) allows states to capture federal rebates for many drugs paid for through a managed care model. Thus, we are concerned states will either: (1) eliminate existing carve outs; or (2) refuse to consider such carve outs in newly implemented managed care programs. In doing so, states will continue to receive federal rebates and keep managed care organizations’ fees capitated, which could result in potentially insufficient rates to cover the significant cost of clotting factor.

NBDF remains committed to working with local chapters and associations and our stakeholders to educate state Medicaid agencies about the potential impact capitation may have on our community.

Capitating blood clotting factor will prove to be a greater burden on the health care system in both effort and overall costs. Capitating blood clotting factor costs on an annual or lifetime basis will force the individual, their pharmacy provider, and their physician to seek less than optimal treatment to protect insurance coverage. This approach will result in increased cost due to additional emergency department visits as well as hospitalizations, which then leads to days missed from work and school.

The life span of an individual with a bleeding disorder such as hemophilia has more than doubled over the past twenty years due to product improvements and the advancements in treating the disease. An example of such an improvement is a treatment regimen known as prophylaxis. Prophylaxis focuses on preventing the bleed before it occurs versus stopping the bleed after it happens (prophylactic treatment for children with severe hemophilia is recommended by the National Bleeding Disorders Foundation’s Medical and Scientific Advisory Council (MASAC)). The significance of this advancement is the reduction of joint damage and the associated treatment cost. Capitation of blood clotting factors reimbursement would eliminate this approach, which is considered the standard of care across the United States.

NBDF believes the capitation of hemophilia clotting factor prescription drug costs negatively impacts the existing standard of care and treatment, and, in extreme cases, may also prove to be life threatening.

Pharmacy Management - Preferred Drug Lists

Medicaid is required to cover all FDA-approved therapies that are part of the federal Medicaid Drug Rebate Program. The most common form of utilization management by state Medicaid programs to control their drug costs is a preferred drug list (PDL). Preferred drugs are usually less expensive generics or higher cost brand names for which the state is receiving a supplemental rebate from the manufacturer. Patients may still access nonpreferred drugs through prior authorization or some type of step therapy or medical exception process.

State PDLs may be managed by the state or by Medicaid managed care organizations. Slightly more than half of Medicaid enrollees have their pharmacy benefit controlled by the state either through a single PDL or by a carve-out of prescription drugs into fee-for-service (eleven states have no Medicaid managed care and administer the medical and pharmacy benefits fee-for-service). The trend is for states to take more control of prescription drug coverage. The sixteen states that require managed care companies to follow the single PDL that the state uses for fee-for-service made that move in the past seven years. In six states the entire pharmacy benefit is carved-out of managed care and is administered through fee-for-service. Five states carve-out only select classes of drugs for administration in fee-for-service. In the sixteen remaining states managed care companies control the pharmacy benefit and the PDL, which means there are many PDLs in some states.

Step Therapy

States typically require a patient to try and fail on at least one other preferred product to access nonpreferred drugs on a PDL. As stated above, NBDF believes the choice of product used by an individual should remain a decision between patient and physician. Please refer to our page on Step Therapy for more detailed information about NBDF’s position and work on this issue.

Reimbursement

In 2016 CMS published the Covered Outpatient Drug (COD) Rule which required states to adopt an Actual Acquisition Cost prescription drug reimbursement methodology along with a professional dispensing fee. It also required states to document payment methodologies for physician administered drugs and specialty drugs, including clotting factor.

NBDF wrote to each state Medicaid director asking several questions about how the state planned to comply with the new rule and how it would apply to 340B pharmacies, and expressing its concern about the impact of a new reimbursement methodology on patients’ access to care.

In 2017 California became the final state to submit a State Plan Amendment (SPA) to comply with the COD rule. Based on comments from stakeholders and CMS the state decided to consider the reimbursement of clotting factor separately. In 2019 the state submitted their proposed reimbursement methodology for clotting factor.

Expansion

When the Affordable Care Act (ACA) passed in 2010 it mandated that states expand existing Medicaid eligibility to all US citizens up to age 65 with incomes below 133% of the federal poverty level (FPL) (include hover function for FPL). The law intended to expand Medicaid eligibility primarily to childless adults, considering in many states they were not eligible. It also raised the income eligibility level for parents and in some cases, significantly. Currently, Medicaid covers people based on a state’s income eligibility criteria.

However, in June 2012, the US Supreme Court ruled that expansion of Medicaid eligibility by states was optional. Thus, states could continue with their current Medicaid eligibility levels without risk of being penalized or excluded from the Medicaid program by the federal government. As a result, 12 states have opted against expanding Medicaid eligibility beyond the income eligibility level in 2013, which will lead to “coverage gaps” in many of these states. Individuals falling into the “coverage gap” are neither eligible for Medicaid, nor are they eligible to receive premium tax credits to purchase an individual health insurance plan through the health insurance marketplaces. In the end, they will remain uninsured and potentially lack access to quality health care.

A handful of states not expanding their Medicaid program have attempted to address the coverage gap for adults who make less than 100% of the FPL. For example, Wisconsin, expanded its income eligibility level for parents and other adults from 95% to 100% FPL. Other states, including Pennsylvania and Indiana, have proposed alternative methods of expansion to close the gap. However, such proposals must be approved by the Center for Medicaid and Medicare Services (CMS) before they can be implemented. Both were implemented in 2015.

Some states have other safety net programs in place to ensure access to some form of health care for uninsured individuals; however, states may be looking to eliminate or reduce current safety net programs as they struggle to balance their budgets.

Persons with bleeding disorders who fall into these coverage gaps may continue to lack access to lifesaving clotting factor therapies and to a primary care doctor and/or HTC. As a result, they will be unable to develop or adhere to a recommended treatment plan and may have significantly more bleeds, require hospitalization or suffer other related complications. Such events can significantly burden the health care system and end up costing states more money in the long run.

Section 1115 Waivers

Section 1115 of the Social Security Act gives the Secretary of Health and Human Services authority to approve experimental, pilot, or demonstration projects that are likely to assist in promoting the objectives of the Medicaid program. The purpose of these demonstrations, which give states additional flexibility to design and improve their programs, is to demonstrate and evaluate state-specific policy approaches to better serving Medicaid populations.

Since 2017, CMS has attempted to expand the use of waivers to allow states to limit Medicaid enrollment. Using Section 1115 waivers states have applied to impose work requirements for beneficiaries, establish a closed formulary for prescription drugs, cap lifetime benefits on Medicaid enrollees, and require premium payments.

In January 2020 CMS announced new guidance to states that would limit federal Medicaid funding through block grants.

The purpose of Medicaid is to provide health care for low-income individuals and families. NBDF opposes policies that make it more difficult or expensive for patients with chronic diseases to access Medicaid.

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