News From the Centers for Medicare & Medicaid Services

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The Centers for Medicare & Medicaid Services (CMS) recently issued final rulings on several issues relevant to prescription drug prices and Medicaid provider payments.

Prescription Drug Prices

On May 16, 2019, CMS issued a final rule that modernizes and improves the Medicare Advantage and Part D programs. In a news release issued by the agency, CMS noted these changes will ensure that patients have greater transparency into the cost of prescription drugs in Part D and will also enable Medicare Advantage plans to negotiate better prices for physician-administered medicines in Part C.

CMS administrator Seema Verma said, “[This] rule requires Part D plans to adopt tools that provide clinicians with information that they can discuss with patients on out-of-pocket costs for prescription drugs at the time a prescription is written. By empowering patients with information on the cost of their prescription drugs, [this] rule will ensure that pharmaceutical companies have to compete on the basis of price. This effort builds on new requirements for hospitals to disclose chargemaster prices and other agency initiatives to promote price transparency.”

After an implementation period, Part D plans will be required to provide access to such a tool that is integrated into clinicians’ electronic prescribing or electronic health records systems. To further promote transparency, after an implementation period the new rule will also require the Explanation of Benefits document that Part D enrollees receive each month to include information on drug price increases and lower-cost therapeutic alternatives.

Medicaid Provider Payments

On May 2, 2019, CMS released the Medicaid Provider Reassignment Regulation final rule removing a state’s ability to divert portions of Medicaid provider payments to third parties outside of the scope of what the statute allows.

CMS received more than 7,000 comments from the public, health-care providers, unions, state agencies, and advocacy groups during the comment period for the proposed rule. CMS took the comments into consideration when finalizing its proposal.

“State Medicaid programs are responsible for ensuring that taxpayer dollars are dedicated to providing health-care services for low-income, vulnerable Americans and are not diverted in ways that do not comply with federal law,” said Ms. Seema Verma. “This final rule is intended to ensure that providers receive their complete payment, and that any circumstance where a state redirects part of a provider’s payment is clearly allowed under the law.”