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MACPAC Discusses Fiscal Accountability Rule, Prescription Drugs, DSH Allotments

December 12, 2019

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Mary Mullaney, Director, Hospital Payment Policies
Andrew Amari, Hospital Policy and Regulatory Specialist

The Medicaid and CHIP Payment and Access Commission (MACPAC) met Dec. 12-13 to discuss the proposed rule on Medicaid supplemental payments, an expert roundtable on Medicaid prescription drugs, and updates on MACPAC’s draft chapter analyzing disproportionate share hospital (DSH) allotments.

Medicaid Fiscal Accountability Proposed Rule 

MACPAC staff provided a broad overview of the Medicaid Fiscal Accountability proposed rule [see Washington Highlights, Nov. 15]. There was agreement that MACPAC should provide written comments which will be due before the next meeting. MACPAC will ask the Centers for Medicare and Medicaid Services (CMS) to show the proposed rule’s impact on the Medicaid program as a whole and on specific targeted populations. Commissioners feel strongly that the proposals will produce access issues for many Medicaid beneficiaries, with the potential for the biggest negative impact being on academic medical centers and children’s hospitals, which provide specialized services to very complex patients. While MACPAC has previously recommended provider-level data collection to better inform policymaking, it will urge CMS to make this data publicly available and call on CMS to provide clear examples of how the data will be used, including differentiating state impact. Commissioners also question the burden the proposed rule will have on states and providers and pointed out that the rule is inconsistent with a previous rule on state access monitoring that was rescinded due to increased burden. Finally, a few Commissioners supported the idea of sending CMS a letter asking for a delay in the comment period deadline to give stakeholders additional time to understand the impact of the proposed rule. Ultimately, the Chair declined to send a letter so as not to interfere with the Agency’s processes.

Themes from Medicaid Roundtable on Prescription Drugs  

MACPAC staff presented a summary of themes from a roundtable it hosted in November on high-cost drugs. Medicaid has seen a rise in the use of specialty drugs among beneficiaries with 12 of the top 20 Medicaid drugs by spending now being specialty drugs. Specialty drugs are expected to represent 50 percent of Medicaid drug spending by 2020. Key challenges noted by the roundtable include high list prices, limited clinical evidence to support use, lack of competition, the inability of states to predict drug spending, and the requirement that states balance their budgets. Potential policy options discussed included having more information about drugs in the pipeline, changing incentives to drive value-based pricing based on clinical evidence, increasing the federal match for certain high-cost drugs to reduce budgetary burden on states, allowing states to use closed formularies targeting certain drugs, and paying for drugs over time. Commissioners voiced concern over drugs coming to market more quickly with limited post-market analysis and surveillance of safety and efficacy. 

Draft Chapter on DSH Allotments 

MACPAC staff reviewed the Commission’s draft chapter presenting its statutorily required analyses of DSH allotments for inclusion in MACPAC’s March 2020 Report. The draft chapter provides an update on the number of uninsured individuals, the amount and sources of uncompensated care reported by hospitals, and the identification of hospitals with high levels of uncompensated care that provide essential community services. Staff presented on updates to the chapter based on Commissioner feedback made during MACPAC’s October 2019 meeting [see Washington Highlights, Nov. 1]. The draft chapter now includes recommendations to require facility-level reporting of DSH payment amounts and increase oversight of DSH overpayments, among others. Staff noted that several of the newly included recommendations in the draft chapter are addressed in the Medicaid Fiscal Accountability proposed rule. Staff will monitor the proposed rule and potential Congressional action on DSH allotment reductions before the chapter is finalized. In their brief discussion, Commissioners expressed support for the changes but declined to provide additional feedback on the chapter.

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