NCD letter to CMS regarding state Medicaid program use of the QALY

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November 8, 2021

Chiquita Brooks-LaSure, Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
P.O. Box 8010, Baltimore, MD 21244-1850

RE:     Information and Meeting Request from the National Council on Disability

Dear Administrator Brooks-LaSure:

The National Council on Disability (NCD) is an independent, nonpartisan federal agency charged with providing advice to the President, Congress and federal agencies on matters affecting the lives of people with disabilities. I write in my capacity as Chairman of NCD to request information on state Medicaid plans and waivers to inform an NCD report on states’ use of cost-effectiveness methods, such as Quality-Adjusted Life Years (QALYs), in Medicaid coverage decisions for prescription drugs and other healthcare services.

NCD undertakes this study under our general mandate to “review and evaluate on a continuing basis -- policies, programs, practices, and procedures concerning individuals with disabilities conducted or assisted by Federal departments and agencies…in order to assess the effectiveness of such policies, programs, practices, procedures… in meeting the needs of individuals with disabilities.”[1] And specifically, our mandate to “review and evaluate on a continuing basis new and emerging disability policy issues affecting individuals with disabilities at the Federal, State, and local levels, … including access to health care.”[2]

In 1992, the U.S. Department of Health and Human Services (HHS) rejected the State of Oregon’s proposed Section 1115(a) waiver on grounds that its approach to rationing of health services using QALY-based cost-effectiveness ratios was discriminatory and unlawful. At the time, HHS Secretary Louis W. Sullivan MD wrote a letter to the New York Times stating, “Our principal concern is that Oregon's plan in substantial part values the life of a person with a disability less than the life of a person without a disability. This premise is discriminatory and inconsistent with the Americans with Disabilities Act.” [3] Oregon was required to revise its Section 1115(a) waiver to address these concerns before approval.

Nevertheless, we are aware that Oregon continues to use QALYs in rationing health care under its Section 1115(a) waiver, and that other state Medicaid programs also use QALYs as part of deliberations within their Drug Utilization Review Boards and Pharmacy and Therapeutics Committees to inform decisions related to prescription drug coverage. In addition, we have been informed that some state Medicaid plans have proposed the use of cost effectiveness data, such as QALYs or similar metrics, to restrict formularies.

Information & Meeting Request

1.  NCD requests information about Oregon’s Section 1115(a) waiver and its continued approval to better understand the parameters under which HHS allows the state to use QALYs as a component of its decision-making for determining its prioritized list of health services.

2.  NCD requests information about HHS guidance and policies as they relate to state Medicaid programs’ use of QALYs or similar metrics from 1992 to present.

3.  NCD also requests a meeting with HHS staff involved in the review and approval of state waiver applications. NCD is also in communication with CMS to arrange a meeting on our broader health equity work, but if it’s more efficient for CMS to combine these two meetings, we are happy to do so.

I appreciate your consideration and cooperation in assisting us to obtain this information so that we can develop an accurate report in a timely manner. Responses to this request should be directed to Ana Torres-Davis, NCD Senior Attorney Advisor, at atorresdavis@ncd.gov.

Respectfully, 

Andrés J. Gallegos
Chairman




[1] 29 U.S.C. § 781(a)(5), (a)(6).

[2] 29 U.S.C. § 781(a)(10).

[3] L. Sullivan, “Oregon Health Plan Is Unfair to the Disabled,” New York Times, September 1, 1992,  https://www.nytimes.com/1992/09/01/opinion/l-oregon-health-plan-is-unfai...