Highlight on Delaware: First State missed rebates for physician-administered drugs

By not billing manufacturers for some rebates for physician-administered drugs dispensed to enrollees of Medicaid managed-care organizations (MCOs), Delaware missed out on rebates worth $230,000 ($127,000 federal share), according to a report from the HHS Office of Inspector General (OIG).  Although the state agency properly billed for most MCO drug utilization samples, it did not have valid National Drug Codes (NDCs) for other data submitted, and did not bill manufacturers for those rebates. The Delaware state agency told the OIG that it has no reasonable means for researching and identifying the specific products and NDCs because the MCO that submitted most of the utilization data without valid NDCs is no longer contracted with the state; the OIG responded that the state agency’s contract with MCOs provided access to records to support claims for at least five years after the claim was submitted (OIG Report, A-03-15-00202, December 30, 2016).

Drug rebate program

For a covered outpatient drug to be eligible for federal reimbursement under the  Medicaid program, the drug’s manufacturer must enter into a rebate agreement with CMS and pay quarterly rebates to the states; these rebates offset the cost of prescription drugs.  MCOs contract with states to provide specific services to enrolled Medicaid beneficiaries; in return, they receive a predetermined periodic capitation payment, which may cover physician-administered drugs. States report to CMS the capitation payments made to MCOs, but these reports do not identify specific types of services provided. States then submit drug utilization data containing NDCs to the manufacturer in order to receive the rebates. Most states require MCOs to submit NDCs to the state so the state can perform its reporting requirements. Failure to comply with federal requirements for capturing NDCs and collecting rebates can make a state ineligible to receive federal reimbursement for covered physician-administered outpatient drugs.

Delaware drug rebate program

A contractor manages Delaware’s drug rebate program for the state Medicaid agency, which is responsible for billing and collecting Medicaid drug rebates for physician-administered drugs. In 2013, Delaware paid MCOs more than $1 billion, including expenditures for physician-administered drugs. For that year, the OIG audit found that the state agency did not fully comply with requirements for billing manufacturers for rebates. Although most MCO drugs were properly billed and submitted for rebates, some physician-administered drugs did not have valid NDCs; the state agency did not bill manufacturers for rebates for those drugs. The MCO submitted its utilization data without valid NDC information, and the state failed to ensure that it submitted the information.

OIG recommendations and state response

The OIG made three recommendations to the state agency; the state did not concur with the first two. The recommendations were that the Delaware Medicaid agency:

  • work with CMS to determine the correct NDCs for the drug utilization data missing this information, bill the manufacturers for the rebates, and refund the federal share of rebates collected;
  • work with CMS to resolve drug utilization without valid NDCs for which the OIG was not able to determine an estimate, determine the correct NDCs and rebates due, bill manufacturers for the rebates, and refund the federal share of rebates collected; and
  • ensure that MCOs submit drug utilization data containing NDCs for all physician-administered drugs.

Delaware said that it has no reasonable means for researching and identifying the specific products and NDCs that were missing from utilization data because it no longer is under contract with the MCO that submitted the incomplete data. However, the OIG noted that the state agency’s contract with that MCO requires access to records for at least five years after a claim is submitted; therefore, the OIG believes that its recommendations are valid.

Delaware provided the OIG with information on actions it planned to take to address the third recommendation.

Highlight on Delaware: ACA rates increasing for Delawareans

Monthly premiums will increase 18 to 35 percent for Delawareans who purchase individual and small group health insurance on the health insurance marketplace in 2017. However the increase faced by individuals will depend on their plan and, in cases of individuals eligible for federal subsidies, the impact of the premium hike is limited because tax credits will increase as premiums rise.

Insurers

Highmark Blue Cross Blue Shield of Delaware and Aetna Life Insurance Co. are the only two companies that will offer individual or small group plans to Delawareans on the marketplace in 2017. When requesting rate increases, Highmark asked for a 32.5 percent increase in individual plan rates—a demand 4 percent higher than the year before.  Aetna sought increases between 23.9 and 25 percent for individual plans. Although Delaware Department of Insurance Commissioner Karen Weldin Stewart negotiated lower rates with the insurers, CMS encouraged Stewart to accept the rate increases so that the insurers would not leave the marketplace. Aetna has pulled ACA plans from 11 other states. The acceptance of the higher rates was a calculated compromise to maintain exchange options for Delaware consumers. Even with the compromise, across the state, plan choices are limited. Between the two companies, there are 20 individual plans and 11 plans for small businesses in 2017.

Premium increases

The premium increases for individual plans vary from 18 to 35 percent. As an example of the cost increases, a 21-year-old nonsmoker could experience about a $64 increase. In other cases, the increases are more severe, for example, smokers over the age of 60 could pay over $300 more than they did in 2016. Consumers can compare rates at the Delaware Department of Insurance website. In the case of enrollees earning between 100 and 400 percent of the federal poverty level (FPL), tax credits are available to make the cost of insurance premiums more affordable.

Perspective

Despite concerns over the rate increases, HHS press secretary Jonathan Gold assured Delawareans that affordable plans will continue to be available, noting that many individuals will be able to select a plan that costs less than $75 per month.  Gold cautioned that “headline rate changes” can be misleading because “tax credits reduce the cost of coverage below the sticker price and shopping helps consumers find the best deal.”

Connecticut Proposes Deaf Child Bill of Rights to Address Education Gap

Deaf and hard of hearing (HOH) children generally do not differ cognitively from their peers in a way that would prevent them from learning the same material just as well. So why is it that in Connecticut, as well as other locations, children with hearing disabilities appear to be falling behind hearing children in state tests? In 2011, approximately 71 to 81 percent of children with hearing disabilities failed to reach state standards in Connecticut Mastery Tests (CMTs) and Connecticut Academic Performance Tests (CAPTs). Comparatively, between 35 to 58 percent of hearing students failed to meet the goals.

The answer, according to advocates for deaf and HOH persons, is not the disability itself, but the manner in which the children are being taught.  According to Terry Bedard, president of Hear Here Hartford, a deaf advocacy group, “Their needs are not being addressed in the way they should be, and that’s resulting in this wide achievement gap.” Advocates believe that since there is a relatively “low incidence” of hearing disabilities, they are commonly overlooked. In Connecticut, approximately 700 children are registered with the education department as having a hearing disability; however, the number could be greater since such students are not tracked carefully.

Consequently, the Connecticut General Assembly’s education committee will be considering legislation this term to address the gap. “A Deaf Child Bill of Rights,” introduced by the Connecticut Council of Organizations Serving the Deaf, would focus on an individualized education program (IEP) centered around each student’s communication and language needs. Each student’s IEP would be connected to a formal “Language and Communication Plan” that would address that child’s specific needs. The measure would also require that the team implementing the IEP includes at least one educational professional who specializes in hearing disabilities. The bill would compel the state to execute a more specific tracking system in order to better identify hearing disabled children and chart their academic progress.

If the bill is passed, Connecticut will be the 12th state in the country to implement a deaf child bill of rights, joining California, Colorado, Delaware, Georgia, Louisiana, Montana, New Mexico, Pennsylvania, Rhode Island, South Dakota and Texas.