Millions of Americans rely on Medicaid to access essential care and lifesaving treatments. As a vital safety net for vulnerable and low-income individuals and families, it is imperative that the public assess any proposed changes to Medicaid – small and large – in an effort to mitigate unintended consequences. Yet a new proposed rule from the Centers for Medicare and Medicaid Services (CMS) to “stack” rebates in Medicaid could harm infusion providers and their patients by limiting access to lifesaving, provider-administered treatments in the lowest-cost care settings. Luckily, it is not too late for the agency to course-correct and preserve access to much-needed treatments. CMS must heed the concerns of lawmakers, physicians, and health equity advocates and act quickly to withdraw the proposed rebate stacking mandate to protect providers and patients.
Today, drug manufacturers give Medicaid the lowest or “best” price offered to any entity throughout the healthcare supply chain, including pharmacies, wholesalers, and infusion providers. Approximately 780 manufacturers participate in the Medicaid Drug Rebate Program (MDRP), enabling infusion centers to offer the lowest-cost access to treatments and ensuring that Medicaid patients can access critical therapies at the right time in a cost-effective setting. For infusion providers, the MDRP ensures Medicaid’s coverage of drugs for some of the most vulnerable patients managing the physical, emotional, and financial burdens of complex chronic and autoimmune diseases, including lupus, rheumatoid arthritis, Crohn’s disease, and more.
In May 2023, CMS published a rule proposing sweeping changes to the Medicaid drug program with the potential to upend the way drug discounts are handled and drug prices are calculated. The proposed rule would force drug manufacturers to stack or aggregate drug discounts provided to all stakeholders throughout the healthcare supply chain, including non-hospital infusion providers and pharmacies, to establish the drug’s “best price.” Commonly referred to as the “stacking” policy, the proposed changes would create an artificial price that could harm future incentives for medical innovation and providers serving Medicaid patients who rely on such discounts.
If finalized, Medicaid rebate stacking could disincentivize drugmakers from offering voluntary drug discounts that make community-based infusion centers the lowest-cost care settings for provider-administered treatments. If drug manufacturers roll back discounts to infusion centers, infusion providers may be unable to acquire and administer critical medications, forcing patients to forgo treatment or receive care in a higher-cost setting. Non-hospital, community-based infusion centers are often more accessible and affordable than traditional hospital sites, offering safer and more efficient patient-centered care for those in need of provider-administered treatments, like life-changing biologic medicines.
A recently published study from Avalere demonstrates that a “stacking” policy would have a ripple effect, impacting Medicaid rebate liability across drug classes. The Avalere study found that the proposed “stacking” policy could potentially disrupt markets for stakeholders across the healthcare ecosystem, such as payers, manufacturers, pharmacies, providers, supply chain entities, and patients.
In addition to the implications for providers and future drug development, a CMS stacking policy in Medicaid could raise patient privacy concerns by requiring drug manufacturers to follow medicines throughout the supply chain. To determine “best price” today, drugmakers evaluate price on an individual customer basis. To determine “best price” under a stacking policy, a manufacturer would require access to a patient’s identifying information (and health insurer information) to accurately track drug discounts from all entities in the supply chain who are eligible for the best price.
Since CMS published the proposed changes this summer, policymakers, health-equity advocates, and physician advocates have all raised alarms about the impact of stacking rebates. In October 2023, members of the Senate Finance Committee issued a letter to CMS expressing concerns that the proposed changes would increase bureaucracy and upend decades of statutory understanding without providing any benefit to patients. The National Minority Quality Forum (NMQF) argued that the proposed rule would prove to be a deterrent to drug research benefiting Medicaid patients, and the American Society of Gene + Cell Therapy urged CMS to consider how the rule would impact bringing life-changing therapies to market.
While we commend CMS for continuing to propose solutions intended to reduce costs for Medicaid beneficiaries, every policy should be evaluated on its impact across the entire healthcare ecosystem to mitigate unintended consequences. It is imperative that CMS withdraw the stacking policy to protect providers and vulnerable patients who rely on access to essential treatments to optimize their health and well-being.
Brian Nyquist, MPH is the President and Chief Executive Officer (CEO) of the National Infusion Center Association (NICA)
