The Year in Medicaid 2024

The AMP cap expiration finally arrived following several years on the horizon since its conception in 2021.  Many manufacturers had strategies prepared as the calendar turned to 2024. There were some notable product discontinuations, such as a couple of asthma inhaler options, and a well-publicized change to pricing for many insulin products. A handful of manufacturers opted to exit the Medicaid Drug Rebate Program, but they did not cause significant disruptions in care. It took a good part of the year for states to gather all the information needed to make access changes due to some delays in availability, so their responses may still be in process as the calendar turns to 2025.

States continued to catch up on Medicaid disenrollments well into the new year. The first dip in Medicaid total enrollment was captured by the Artia Solutions Medicaid enrollment count in March 2024 at about 91 million, down from over 96 million in September 2023. This expected trend continued throughout the year to the next Artia count of around 81 million in September. The next expectation, however, is that there will be a bounce back in enrollment as recipients disenrolled improperly or unknowingly regain Medicaid coverage in 2025. Artia’s semi-annual Medicaid enrollment count will keep manufacturers updated.  

CMS began a busy year starting with the February announcement of its intent to act upon the President’s directive to the Department of Health and Human Services to lower drug prices and promote access to innovative drug therapies. CMS selected sickle cell disease gene therapies as the target of its first foray into value-based contracting on behalf of all state Medicaid programs. This factored heavily into the increase in the number of states that achieved CMS-approved value-based contract templates in 2024.  As of July, there were 29 states with an approved template, up from 21 at the beginning of the year. It remains to be seen if states follow through and contract any of the opportunities provided by CMS negotiations, which will be revealed to states by the end of the year.

Meanwhile, CMS was also busy reviewing stakeholder comments and assembling the Final Rule released in September. One of the most significant parts of the rule was the change to the definition of Covered Outpatient Drug (COD). While the new definition makes “COD” somewhat of a misnomer, the change extends the definition to include products previously not widely subjected to the mandatory CMS rebate. In particular, products historically administered as part of a bundled payment (e.g. hospital administration) can be rebate-eligible if they meet criteria for the reporting of drug costs. This may lead to yet more state plan amendments filed with CMS for approval of changes to reimbursement in order to take advantage of additional rebate opportunities.

As state Medicaid programs ponder coverage decisions for hospital-administered and/or physician-administered drugs, they will simultaneously consider coverage of obesity drugs in 2025. At 2024 Medicaid conferences such as ADURS and AMPAA, this topic was a standard inclusion in state reports in the way that hepatitis C access was a decade ago. As more products achieve weight loss and cardiovascular improvement indications, states will reconsider longstanding exclusions for products with what were once known as “cosmetic” uses.  

The past year also brought the continuation of the trend of states reclaiming pharmacy benefit utilization management control from their Medicaid MCOs. In 2024, Oklahoma and South Carolina implemented statewide PDLs. Oklahoma started theirs concurrently with the first-time use of managed care for Medicaid while South Carolina Medicaid managed care had been in place for years. Mississippi expanded on its statewide controls to add a statewide pharmacy benefit administrator (PBA) to its statewide PDL practice. Gainwell is the vendor for this statewide PBA, its second such client (Ohio).  Georgia is the first state to announce its intent to enact a statewide PDL in 2025. Over the course of the coming year, eyes will be on New Mexico to resume its statewide PDL plan. If it carries over into 2026, it could be joined by Nevada, which included a potential statewide PDL as part of its recent procurement announcement for Medicaid MCOs. Resulting MCO contracts are scheduled to begin January 1, 2026. In an interesting but so far isolated development, Minnesota’s legislature passed a law prohibiting for-profit MCOs from being awarded contracts for Medicaid coverage.

A recent surge in PBA services changing hands continued to muddy the waters of Medicaid rebate responsibilities. Following the transition of Mississippi, a SSDC pool state, to MedImpact for “PDL services,” Kentucky took a similar approach in 2024 by moving from Magellan’s (now Prime) NMPI pool to SSDC despite “PDL services” being awarded to MedImpact. So far, 2025 appears to have a straightforward transition as Colorado moves from Prime to MedImpact as its pharmacy services vendor.  Whatever additional changes come, difficulties like those caused by Change Healthcare’s switch vendor data breach in early 2024 will hopefully not be among them.

We look forward to 2025 as a year that yet does not have expected events like those from the previous one. Part of that reason could be the transition to a new administration, which could introduce new programs and orders that impact Medicaid delivery to recipients. Or, perhaps the relative decrease in obligations will give states room to breathe and implement their own innovations. There will no doubt be more to discuss as the year unfolds and we can promise full coverage at the return of Crossroads: An Artia Solutions Conference in August 2025 as well as throughout 2025.

Happy New Year!