Medicaid Planning: Safe Harbors Created by Congress
In January 2019, the Office of the Inspector General of the U.S. Department of Health & Human Services (HHS) released a proposed rule to narrow existing regulatory discount safe harbor under the Anti-Kickback Statute (AKS) and generate two additional safe harbors. The primary purpose regarding the proposed rule is updating the discount safe harbor to accommodate our modern prescription drug distribution model while protecting federal health care programs, benefits, and their beneficiaries.
If Finalized, the Proposed Rule Would Mean Changes:
Exclusion from existing discount safe harbor discounts provided to Medicare Part D plans (this includes Medicare Advantage plans with drug benefit), Medicaid managed care organizations (MCOs) and pharmacy benefit managers (PBM).
The addition of a new safe harbor to protect specific discounts passed along to beneficiaries of federal health care programs.
The addition of a new safe harbor to protect specific fees prescription drug manufacturers pay to pharmacy benefit managers.
The proposed rule appears to have an indirect effect on pharmaceutical prices through increased transparency due to the requirement that discounts be provided at the point of sale. It is unknown what the actual impact of the proposed rule would be on prescription drug costs.
If the proposed rule is finalized as it was introduced, there would be a significant change to prescription drug reimbursement by Medicare Part D and Medicaid MCOs. Predicting how manufacturers, PBMs, and health plans would react to the changes can be difficult, but the Office of the Inspector General expects enrollees’ out-of-pocket costs for prescriptions to fall. Beneficiaries who fill more prescriptions will receive the most benefits from changes that occur as a result of the proposed rule. Other studies indicate that premiums could rise as a result of the proposed rule as the existing safe harbor contains rebates intended to lower premiums.
If you are unsure how your Medicaid eligibility will be affected by proposed changes to public policy, please get in touch with one of the experienced Medicaid planning attorneys at Elder Solutions Law Firm today.