CMS’s new Medicaid rule is already raising serious concerns … and giving experts migraines 

CMS put out a new proposal last week that would allow drug makers to sidestep Medicaid rules. It’s meant to encourage so-called value-based arrangements, where insurers pay for drugs only when they work. Already, though, some of the nation’s top Medicaid and drug pricing experts are confused and concerned that the proposal’s vague language could open the door to drug makers gaming the system. 

STAT talked to two experts for their quick takes on the new draft policy. Here are a few of their biggest concerns: 

A ‘WTF’ preamble:

Edwin Park, a research professor at Georgetown University, is seriously concerned about the new rule’s preamble, which he reads as saying a state Medicaid program could lose out on getting the “best price” for a drug unless they agreed to participate in so-called value-based pricing arrangements. He noted that the language is “so bizarre that it almost seems unintentional” and “doesn’t make any sense.” If that policy actually was enacted, he added it “could be worse than current law.” 

What sort of deals qualify?

Rachel Sachs, an associate professor of law at Washington University in Saint Louis, says she's concerned by the government's expansive definition of what sorts of deals qualify under this new proposal. She noted, for example, that the administration points to both “evidence-based measures” and “outcomes-based measures” as potential value-based arrangements, but Sachs notes that those are very different things: the former might let insurers pay for drugs based on how well a medicine works, compared to other medicines, while outcomes-based measures typically refer to paying for a drug only when it works for a patient.

Some basic instructions are lacking: 

Park also notes that CMS provides little to no instruction on how drug makers should report a best-price for a value-based contract when they don’t yet have data on the level of discounts they’re providing insurers. He argues this could allow drug makers to game the system by reporting the smallest possible discount under a value-based pricing arrangement — a move that would let them delay giving more substantial  discounts to Medicaid. That could potentially put serious strain on state budgets that depend on those discounts, he argued.