January 11, 2021

Around the nation: Tennessee received CMS' OK on plan to turn Medicaid into block grant program

Daily Briefing

    Tennessee Gov. Bill Lee (R) on Friday announced the Trump administration has approved a 10-year demonstration program to turn the state's Medicaid program into a block grant program, making Tennessee the first state in the United States to get CMS' approval to receive a lump sum of funding for its Medicaid program, in today's bite-sized hospital and health industry news from the District of Columbia, Ohio, and Tennessee.

    • District of Columbia: HHS' Office of General Counsel (OGC) late last month in an advisory opinion said drug manufacturers are required to provide discounts to community health centers, safety net hospitals, and other entities covered under the federal 340B Drug Pricing Program. Last year, some drugmakers began implementing new contract conditions or imposing restrictions on the discounts. However, Robert Charrow, HHS' general counsel, lambasted those actions in the advisory opinion, writing, "Certain manufacturers' newfound and unilateral refusal to sell drugs through contract pharmacies is at odds with the structure and intended operation of the statute." The opinion comes as Eli Lilly, Novartis, Astra Zeneca, Sanofi, United Therapeutics, and Novo Nordisk face three lawsuits asking the courts to order the Health Resources and Services Administration to stop the drugmakers from restricting discounts to providers. Officials from AstraZeneca, Novartis, and Sanofi told Inside Health Policy they plan to continue their restrictions on 340B discounts for contract pharmacies, and Inside Health Policy reports that Eli Lilly plans to continue its discount restrictions, as well (Silverman, STAT+, 1/4 [subscription required]; Stein, Inside Health Policy, 12/30 [subscription required]; Berg, MedCity News, 1/6; Stein, Inside Health Policy, 1/8 [subscription required).
    • Ohio: Summa Health and HealthSpan Partners, a division of Bon Secours Mercy Health, late last month announced that they would end their investor partnership on Jan 1., three years earlier than planned. Summa Health and HealthSpan entered the 10-year, $250 million partnership agreement in 2013. However, Summa President and CEO Cliff Deveny said the organizations have ended their partnership early because they're "moving in different directions," but noted that the health systems have "enjoyed a collaborative relationship that has been of benefit to both organizations" (Ellison, Becker's Hospital Review, 1/4).
    • Tennessee: Gov. Bill Lee (R) on Friday announced the Trump administration has approved a 10-year demonstration program to turn the state's Medicaid program into a block grant program, making Tennessee the first state in the United States to be approved to receive a lump sum of funding for its Medicaid program. The demonstration among other things will enable Tennessee to maintain a closed formulary for prescription drugs and to keep any savings generated under the program. However, there is opposition to the plan, and it's possible that President-elect Joe Biden's administration could reverse the approval upon taking office (Loller, Associated Press, 1/8; Brady, Modern Healthcare, 1/8; Silverman, STAT+, 1/8 [subscription required]).

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