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June 25, 2020

CMS Proposes New Value Based Purchasing Rule for State Medicaid Programs

On June 19, CMS published a proposed rule in the Federal Register that would allow states to enter into value based purchasing (VBP) arrangements with Medicaid payors specifically to permit manufacturers to work directly with payors to purchase drugs through VBP arrangements, while continuing to preserve the intent and integrity of the Medicaid Drug Rebate Program.  This proposed rule would also revise the calculation of average wholesale price, pharmacy benefit manager accumulators, and implement new drug utilization review programs designed to address the opioid crisis.

In addition, the rule also proposes various revisions to current regulations related to coordination of benefits and third party liability in the special treatment of certain types of care and payment under Medicaid and the Children’s Health Insurance Program. Among the changes include a requirement that states collect information on third party liability before making payments. CMS is accepting comments until 5 p.m. on July 20, 2020.