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NCD Letter to Center for Medicaid and CHIP Services on OR's 1115 Demo Waiver Renewal

Monday, March 7, 2022

Mr. Daniel Tsai
Deputy Administrator & Director, Center for Medicaid & CHIP Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, Maryland 21244

Re: Oregon Health Plan (OHP) 1115 Demonstration Waiver Application for Renewal

Dear Mr. Tsai:

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 on behalf of NCD to voice concerns with OHP’s continued use of the quality-adjusted life year (QALY) for coverage decisions in its Medicaid program, and to advise CMS not to approve OHP’s waiver application until CMS obtains an assurance that OHP will not utilize this discriminatory metric to inform coverage decisions.

In 2019, NCD released a report on the QALY[[1]]( describing its discriminatory design (placing a lower value on treatments which extend the lives of people with chronic illnesses and disabilities) and its discriminatory impact (in countries where it is regularly used, access to lifesaving and life extending medications is restricted). The report also detailed alternative cost-effectiveness methodologies to the QALY that are not as discriminatory against people with disabilities – important context since the disability community’s concerns with the QALY have been misunderstood[[2]]( as being opposed to cost-effectiveness analysis generally, which is inaccurate.

As you know from our November 8, 2021 letter to CMS,[[3]]( and our meeting with you on December 2, 2021, NCD is developing a report on state Medicaid programs’ use of the QALY. The report will contain a case study on OHP, highlighting the U.S. Department of Health and Human Services’ 1992 rejection of Oregon’s Section 1115 waiver because it deemed Oregon’s plan to use the QALY to ration health services “discriminatory and inconsistent with the Americans with Disabilities Act.”[[4]]( Oregon was required to revise its waiver to address these concerns before approval.

Our recent communications with your staff confirm that CMS is not examining waiver applications or state Medicaid plans for use of this discriminatory metric, and NCD has not been able to ascertain when or whether HHS or CMS changed its policy regarding states’ use of the QALY, since it rejected Oregon’s waiver in 1992. Further, OHP recently confirmed to NCD that it continues to use the QALY to contain costs under its Section 1115 waiver. And although OHP informed us that its use of the QALY does not discriminate against people with disabilities, we do not know if the manner that OHP uses the QALY results in limiting or restricting access to the most effective prescription medicines for beneficiaries.

NCD unequivocally agrees that drug prices need to be lowered, as high drug prices can themselves be a source of health inequity for people with disabilities. However, their lowering should not be based on a pricing methodology that devalues the lives of people with disabilities and has been proven discriminatory in its impact to access to treatment.

NCD appreciates your efforts to address disparities in health equity for the 80 million people receiving health coverage through Medicaid and the Children’s Health Insurance Program (CHIP), many of whom are individuals with disabilities who rely on these programs.[[5]]( We encourage you to examine the design and impact of the QALY as it pertains to equitable access to health care for people with disabilities. Moreover, we recommend that CMS revive and restate its 1992 policy and reject any Medicaid waiver applications that indicate reliance on the QALY, or any similar metric, to limit or restrict access to the most effective drugs and treatments for people with disabilities.


Andrés Gallegos

[[1]]( </assets/uploads/docs/ncd-quality-adjusted-life-report-508.pdf> (November 6, 2019).

[[2]]( See, Tufts University’s Center for the Evaluation of Value and Risk in Health letter to Massachusetts Joint Committee on Health Care Financing (November 11, 2021), claiming the QALY helps people with disabilities and that H.1256 / S.745 would prohibit all cost-effectiveness analysis – claims inconsistent with NCD’s research in the area.

[[3]]( (November 8, 2021).

[[4]]( Letter from Louis Sullivan, Secretary, IU.S. Dep’t of Health and Hum. Srvs., to Barbara Roberts, Governor, State of Oregon (Aug. 3,1992), reprinted in, MED-GUIDE-1992-2, MED-GUIDE-TB Para. 40, 406A, HHS Papers Explaining Rejection of Oregon Medicaid Waiver, HHS News Release, Secretarial Letter, and Analysis (Aug. 3, 1992) (CCH).


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