MA – State Seeks to Move Adults off Medicaid, Limit Drug Coverage

October 2017 ~

Massachusetts Health and Human Services is seeking federal permission to move adults off Medicaid by curbing access to in-home and long-term care supports and limiting drug coverage based on efficacy under the state’s Medicaid and Children’s Health Insurance Program, MassHealth.

Massachusetts state officials want CMS to allow MassHealth to adopt a closed formulary, which allows an insurer to provide coverage for only certain drugs that are made available on favorable terms. They argue that by using “commercial-style” formularies, MassHealth would have more power to extract additional rebates from drug makers.

In a letter to CMS Administrator Seema Verma, Massachusetts Secretary of Health and Human Services Marylou Sudders said MassHealth takes up 40% of the state’s budget. “Since 2010, MassHealth drug spending has risen at a compound annual growth rate of 13%. If growth in drug costs continues at the current trajectory, it may crowd out important spending on health care and other critical programs.” Sudders stated, “MassHealth’s continued growth will constrain the state budget unless significant reforms are implemented and key aspects of the program are restructured.”

Under the requested waiver amendment to CMS, MassHealth is proposing to exclude drugs from its primary formulary that have “limited or inadequate clinical efficacy.” This is defined as one or more conditions in which primary endpoints were not achieved in clinical trials, when only surrogate endpoints via FDA’s accelerated approval pathway were reported, when clinical benefits were not assessed, or if a treatment has no incremental benefit compared to alternatives.

The state plans to work with the University of Massachusetts Medical School to form its own “rigorous review process” to set coverage for new drugs and ensure these are clinically proven and effective.



Source(s): Modern Healthcare; KHN Morning Briefing;; STAT News;