A Medicaid state plan is an agreement between a state and the federal government describing how that state administers its Medicaid program. The agreement ensures that a state will abide by federal rules for its program activities and includes details of individual coverage, services provided, reimbursement procedures for providers, and administrative activities that are ongoing in the state.

When a state is planning to make a change to its program policies or operational approach, the state sends a State Plan Amendment (SPA) submission to CMS for review and approval. Cell and gene therapy (CGT) financial solutions described in this toolkit would require a state Medicaid program to obtain CMS approval through a SPA to enter into single-state and/or multi-state supplemental drug rebate agreement for Value-Based Purchasing. CMS maintains a chart that depicts the states with Medicaid Pharmacy Supplemental Rebate Agreements (SRA).

SPAs do not expire. As such, a value-based contract as outlined in a SPA will be subject to the agreement terms between a state Medicaid plan and the drug manufacturer and can be negotiated on a year-by-year basis without CMS involvement.

This Medicaid-specific FoCUS white paper lays out additional detail. The paper contains a toolkit of resources including an example of an approved state plan amendment (SPA) application, an example Value-based Supplemental Rebate Agreement, and a worksheet for negotiating a Milestone-based Contract.