The Centers for Medicare & Medicaid Services has signed off on Louisiana's plan to use a Netflix-style subscription model to pay for hepatitis C drugs in its Medicaid program.
CMS announced Wednesday it approved a state plan amendment that would allow Louisiana Medicaid to pay a lump sum to drug manufacturers for antiviral hepatitis C medications for an unlimited supply of the drugs.
Louisiana is the fifth state to try out this payment arrangement. CMS approved a similar request in Washington earlier this month and had previously given the OK for demonstrations in Oklahoma, Colorado and Michigan.
“The high cost of prescription drugs is one of the greatest challenges in our healthcare system, and Louisiana’s innovative approach to leveraging a subscription model to promote access to hepatitis C therapy is a great example of how states can lead in designing solutions,” CMS Administrator Seema Verma said in a statement.
Supplemental rebate arrangements like the one approved in Louisiana are exempt from Medicaid’s “best price” rules. CMS welcomes similar proposals, the agency said.
Allowing for these alternative payment arrangements is part of CMS’ broader goal of allowing states greater flexibility to shape their Medicaid programs, Verma said.
“States are best positioned to meet the needs of their Medicaid beneficiaries, and CMS is committed to giving them flexibility to confront the challenges they face,” she said.
CMS’ efforts in this area have not been without controversy. It has approved demonstrations for work requirements in several states, which have faced legal challenges—a federal judge rejected them in Kentucky and Arkansas earlier this year.