On Nov. 29, 2016, President-elect Donald Trump announced that he will nominate Seema Verma to be the administrator of the Centers for Medicare & Medicaid Services (CMS). Verma has extensive experience with state Medicaid program design. Her consulting firm, SVC Inc., has assisted several states in developing Patient Protection and Affordable Care Act (ACA) expansion plans and 1115 Medicaid waivers. Her firm also has provided states with technical assistance on Medicaid to Indiana, Iowa, Ohio, Kentucky, Tennessee, Michigan and Maine.
Verma is known for her Medicaid work in Indiana under former Gov. Mitch Daniels on the state’s original 1115 Medicaid waiver. In addition, she worked closely with Vice President-elect Mike Pence when he served as governor on the state’s ACA Medicaid expansion, known as Healthy Indiana Plan 2.0.
Verma’s nomination as CMS administrator may indicate that the Trump administration will seek to implement broad reforms to the Medicaid program. Verma’s views on key Medicaid reform issues are described below.
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Cost-sharing: Verma believes that Medicaid’s “uncompromising” cost-sharing policies prevent individuals from taking responsibility for their health and foster over-use of health services. She believes that cost-sharing policies should consider value-based benefit design and incentivize enrollees to take into consideration cost and quality. If confirmed, Verma may advocate for broader use of premiums, cost-sharing and other consumer responsibility provisions in state Medicaid programs, including work requirements.
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Medicaid Financing: Verma supports flexible Medicaid financing mechanisms, including block grants. Block grants would end Medicaid’s current status as an entitlement program and shift additional costs to states. Block grants will likely lead to higher deductibles and copayments, including for prescription drugs and medical devices, and restrictions on eligibility and coverage.
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High Deductible Health Plans (HDHPs) and Health Savings Accounts (HSAs): Verma supports the use of HDHPs and HSAs as a coverage mechanism for the Medicaid population. HDHPs and HSAs are a centerpiece of the ACA Medicaid expansion that Verma designed for Indiana under Vice President-elect Pence. Under Indiana’s ACA Medicaid expansion, certain beneficiaries are required to make small monthly contributions to HSAs to receive coverage. According to a 2016 Health Affairs blog post, Verma believes that these mechanisms require individuals to have “skin in the game,” which encourages beneficiaries to make “cost and value conscious healthcare decisions.”
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State flexibility: Verma supports state flexibility and allowing states to innovate without undue federal constraints. While testifying before the House Energy and Commerce Committee in 2013, she described the approval process for 1115 waivers as “burdensome.” This type of statement could indicate that she will take action to streamline the 1115 waiver process once confirmed.
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Quality and Alternative Payment Methodologies: Verma believes that there are few incentives for states to achieve quality outcomes. She supports joint federal and state collaboration to identify program standards and incentives. She also believes that states should be rewarded with reduced oversight when they meet quality metrics and supports transitioning from fee-for-service to value-based payments in the Medicaid program.
Senate Confirmation
The Senate Finance Committee is likely to consider Verma’s nomination after the Senate confirms President-elect Trump’s nominee for secretary of Health and Human Services, Rep. Tom Price, and other members of his cabinet. During Verma’s confirmation hearing, Democratic members of the Senate Finance Committee may raise questions about her consulting firm and its contracts, as well as policy-related questions.
For more on other breaking drug pricing related news, visit Sidley’s Global Drug Pricing page.
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Patricia DeLoatche |
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Sidley Government Strategies Practice
Sidley Healthcare Practice
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