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CMS Approves La. Value-based Arrangement

The Centers for Medicare & Medicaid Services (CMS) approved a proposal allowing Louisiana to negotiate supplemental rebates involving Medicaid value-based purchasing arrangements with drug manufacturers.

The state plan amendment (SPA) is designed to allow the state to negotiate under a modified subscription model with manufacturers of prescription drugs that treat patients with hepatitis C. Under this model, the state would pay a fixed annual amount to a pharmaceutical manufacturer to purchase an unrestricted supply of hepatitis C drugs.

With CMS’ approval, Louisiana becomes the fifth state cleared to pursue value-based purchasing agreements for supplemental rebates with manufacturers, after WashingtonOklahomaMichigan, and Colorado. Louisiana’s SPA is similar to the one approved in Washington, which also uses a subscription model for drugs to treat Hepatitis C.

Promoting value-based payments is one of the initiatives outlined in the American Patients First Blueprint, which captures the administration’s plan to combat high drug prices

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Rachel Schwartz is a policy associate at America's Essential Hospitals.

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