Should Medicaid Cover Home-Based Care for Children with Complex Medical Conditions? (H.R. 1839)

What is H.R. 1839?

(Updated September 30, 2019)

This bill was enacted on April 18, 2019

This bill — the Medicaid Services Investment and Accountability Act of 2019 — would extend Medicaid recipients’ protections against spousal impoverishment; establish a state Medicaid option to provide coordinated care to children with complex medical conditions in health homes; prevent the misclassification of drugs in the Medicaid drug rebate program; and extend a number of public health programs.

Extension of Medicaid Recipients’ Protections Against Spousal Impoverishment

This section of the bill would extend an existing provision in the Medicaid Extenders Act of 2019 that disregards a spouse’s income when determining eligibility for home- and community-based services through September 30, 2019.

State Medicaid to Provide Coordinated Care for Children with Complex Medical Conditions in Health Homes

This section of the bill would permit state Medicaid plans to provide medical assistance to children with complex medical conditions through health home services, and provide two quarters of enhanced federal matching funds for states’ payments to health homes. This would entail selecting a designated provider, team of health care professionals operating under a designated provider, or a health team to serve as the child’s health home team.

It’d also establish procedures for the HHS Secretary to set standards for such programs, gather input from stakeholders to craft such programs, monitor such programs’ success, and collect data on such programs’ use. Additionally, the bill would establish state reporting requirements for states to report to the DHS Secretary, Medicaid, and the CHIP Payment and Access Commission on their program participation numbers and patient characteristics.

Children with “medically complex conditions” are defined as individuals under 21 years of age who are 1) eligible for state Medicaid assistance and 2) have one or more chronic conditions affecting three or more organ systems and which severely reduce cognitive or physical functions and require the use of medication, durable medical equipment, therapy, surgery, or other treatments or have one life-limiting illness or rare pediatric disease.

“Chronic conditions” would be defined as serious, long-term physical, mental, or developmental disabilities or diseases, including cerebral palsy, cystic fibrosis, HIV/AIDS, blood diseases (i.e., anemia or sickle cell disease), muscular dystrophy, spina bifida, epilepsy, severe autism spectrum disorder, and serious emotional disturbance or serious mental health issues.

“Home health services” includes comprehensive care management; care coordination, health promotion, and provision of access to the full range of pediatric speciality and subspecialty  medical services, including services from out of state providers as medically necessary; comprehensive transitional care, including appropriate follow-up, from inpatient to other settings; patient and family support; referrals to community and social support services, if relevant; and use of health information technology to link services, as feasible and appropriate.

Extension of the Community Mental Health Services Demonstration Program

This section of this bill would extend the community mental health services demonstration program for another two years, or through June 30, 2019, whichever period is longer.

Additional Funding for the Money Follows the Person Rebalancing Demonstration

This section of the bill would provide an additional $20 million in funding for the Money Follows the Person Program.

Preventing the Misclassification of Drugs Under the Medicaid Drug Rebate Program

This section of this bill would establish a civil monetary policy for misclassifying covered outpatient drugs. Any manufacturer that knowingly misclassifies a covered outpatient drug, such as by knowingly submitting incorrect drug product information, would be subject to a civil monetary penalty of up to two times the amount of the difference between:

1. The total amount of rebates for the drug that the manufacturer paid to all states for all rebate periods during which the drug was misclassified; and

2. The total amount of rebates for the drug that the manufacturer would have been required to pay to all states for all rebate periods during which the drug was misclassified if it’d been correctly classified, as determined by the DHS Secretary. If a manufacturer paid a lower per-unit rebate because of a drug misclassification, regardless of whether it was done knowingly, the company would have to pay back the difference.

This bill would require HHS to notify manufacturers of any misclassified drugs, regardless of whether or not the classifications were intentional. Manufacturers would then be required to correct misclassifications in a timely manner. If a manufacturer failed to correct misclassifications in a timely manner, HHS could correct the misclassification on the manufacturer’s behalf, suspend Medicaid coverage of the drug in question, and/or impose additional civil monetary penalties of up to 23.1 percent of the drug’s average price.

Every year, the HHS Secretary would retain 25 percent of all civil money penalties collected under this section of this bill. This money would be used to: 1) improve drug data reporting systems; 2) evaluate and ensure manufacturer compliance with rebate obligations; and 3) fund oversight and enforcement to ensure that manufacturers accurately and fully report drug information, including data related to drug classification.

Extension of Third-Party Liability Period for Child Support Services

This section of the bill would extend the number of days that a state can delay Medicaid payments to providers for medical services provided to a child with a medical support order from 90 days to 100 days.

Denial for Medicaid Coverage for Certain Expenditures Relating to Vacuum Erection Systems and Penile Prosthetic Implants

This section of the bill would prohibit Medicaid payments for vacuum erection systems or penile implants, unless they’re medically necessary.

Argument in favor

Medicaid is a vital program for many of America’s most vulnerable patients. Ensuring that it covers these patients is vital for ensuring their continued health care coverage. Drug manufacturers have been caught cheating the government and taxpayers by misrepresenting their drugs in the past — punishing them for this behavior is needed to ensure that they end this practice.

Argument opposed

States already have broad latitude to provide a range of services, including home-based care, to children with complex medical conditions under their Medicaid programs. This bill isn’t needed to expand that authority. Drug manufacturers are already subject to a $100,000 maximum penalty for each line of false information they provide so he increased penalties in this bill are unnecessary.

Impact

Medicaid recipients; medical service providers; children with complex medical conditions; children with chronic conditions; children with rare diseases; vacuum erection systems; penile prosthetic implants; state Medicaid programs; community mental health programs; HHS; and the HHS Secretary.

Cost of H.R. 1839

The CBO estimates that implementing this bill would reduce the deficit by a net $1 million over 10 years, as the changes related to drug rebates, third-party payments, and vacuum erection systems would offset mandatory spending increases from the other Medicaid program changes in the bill.

Additional Info

In-Depth: Rep. Raul Ruiz (D-CA) introduced this bill to ensure Medicaid covers vulnerable populations, including children with complex medical conditions, and establish stiffer punishment for drug manufacturers that intentionally mislead regulators about their drugs in order to reduce their Medicaid rebate payments.

In a 2013 Children’s Hospital Association report on the state of medical care for children with complex medical conditions, most of whom relied on Medicaid, health services researchers characterized the health care delivery system for such patients as “fragmented, uncoordinated, crisis-driven, and over-medicalized.” The researchers called for substantial improvements to the ecology of care for children with complex medical needs, support for the structures and processes of care most important to these children and their families, and teaching familial caregivers and pediatric providers how to best care for these children. In December 2018, Children’s Hospital Association president and CEO Mark Wietecha called for continued attention to Medicaid’s role in providing appropriate care to children with complex medical conditions:

“It’s our hope that more state Medicaid programs, families, managed care, and providers including hospitals, clinics, and primary care practices, will work together to transform care for hundreds of thousands of children with medical complexity nationwide.”

The drug classification and rebate provisions of this bill are similar to those in a bill from the 115th Congress, the Right Rebate Act of 2018 (S.3702 / H.R.7223). A summary of that bill published by original Senate cosponsor Sen. Chuck Grassley’s (R-IA) office noted a 2016 whistleblower lawsuit against Mylan, which involved claims that Mylan misclassified its EpiPen as a generic drug as a part of the Medicaid Drug Rebate Program (MDRP), allowing it to pay lower rebates to the Medicaid program than it should have. Sen. Grassley’s office cited an analysis by the HHS Office of Inspector General (OIG), which found that taxpayers might have overpaid for EpiPen by “as much as $1.27 billion over a 10 year period.”

This bill has three bipartisan cosponsors, including two Republicans and one Democrat. While it hasn’t made a statement on this full bill, the Children’s Hospital Association has expressed its support for this bill’s provisions on expanding Medicaid coverage for coordinating care for children with complex medical conditions.

Of Note: There are approximately three million children with complex medical conditions in the U.S., many of whom are covered by Medicaid. These patients often require intensive services from multiple providers in a range of clinical and non-clinical settings. Families USA observes:

“Most children with special needs (69 percent) have complex medical conditions that cannot be managed with medication alone. They rely on multiple services to manage their health conditions, beginning with pediatric sub-specialist physicians, but often also including physical, occupational, or speech therapies; in-home nursing; comprehensive services for children with intellectual and developmental disabilities; specialized wheelchairs; and pediatric mental health care. More than one in four such children has a condition that consistently affects their daily life—and that percent has increased in recent years.”

According to Families USA, 28 states already operate Home and Community-Based Services (HCBS) waivers specifically designed for children with complex medical conditions, which allow such children and their families to access Medicaid funding for in-home care. Most remaining states operate at least one HCBS program that can enroll both children and adults. During a Alliance for Health Policy panel discussion in October 2018, Deidre Gifford, M.D., MPH, deputy care director at the Center for Medicaid and CHIP Services, Centers for Medicare and Medicaid Services, noted that states already have full flexibility to use Medicaid funds to provide home health services to children:

“[H]ome and community-based services for children [are] covered under EPSDT and there are multiple… state plans for kids… They are to be provided services that ensure the child’s access to the larger community whenever possible. And if the state elects to do so, the state can use these services to the family setting whenever possible.”

Drug manufacturers must provide rebates to states in order for their drugs to be covered under Medicaid. These rebates, which are based on drugs’ classifications, help offset Medicaid’s federal and state costs. According to the Centers for Medicare & Medicaid Services (CMS), approximately 600 drugmakers participate in this program. Under current law, there’s already a maximum penalty of $100,000 for each item of false information that a manufacturer provides to HHS.

Media:

• CBO Cost Estimate
  
• Children’s Hospital Association (In Favor, Specific Provisions)
  
• Bloomberg Law
  
• Alliance for Health Policy Panel Transcript (Context)
  
• Families USA (Context)
  
• HealthAffairs (Context, In Favor)
  
• Children’s Hospital Association (CHA) Report (Context)
  
• Kaiser Family Foundation (KFF) (Context)