Cost and Utilization of Behavioral Health Medications Associated with Rescission of an Exemption for Prior Authorization for Severe and Persistent Mental Illness in the Vermont Medicaid Program

BACKGROUND: In recent years, many state Medicaid programs have implemented preferred drug lists (PDL) to control pharmaceutical costs by generating supplemental rebate revenues and directing providers to the most cost-effective treatments. Two states, Michigan and Vermont, sought approval from the Centers for Medicare and Medicaid Services for supplemental rebates for their Medicaid fee-for-service programs in 2002. Behavioral health medications were largely excluded from PDLs and other managed care initiatives implemented by state Medicaid programs because of significant opposition to any impact on this vulnerable population. In November 2001, the Vermont Medicaid program implemented the Vermont Health Access Pharmacy Benefit Management Program, a PDL designed to promote cost-effective use of medications. Despite the potential cost savings resulting from implementation of a PDL, behavioral health providers and advocates in the state of Vermont opposed the implementation of the managed care initiative for beneficiaries with severe mental illness, and after January of 2002, Vermont\u27s program was changed to exempt beneficiaries meeting the severe and persistent mental illness (SPMI) criteria from prior authorization (PA) for behavioral health medications not on the Medicaid PDL. The SPMI exemption was phased out by June 30, 2006. OBJECTIVES: To determine the effects of the rescission of the PA exemption on utilization and costs of 3 classes of behavioral health medications (antidepressants, antipsychotics, and anxiolytics/sedatives). Secondary analyses were conducted to assess the association between rescission of the PA exemption and 2 quality measures that might be associated with pharmacy management policy: (a) behavioral health hospitalizations and (b) high-dose prescribing of antipsychotics, defined as dosing that exceeded the manufacturer-recommended maximum dose by 25%. METHODS: This was a retrospective analysis of pharmacy claims for beneficiaries of the Office of Vermont Health Access Medicaid Program for dates of service from July 1, 2005, through December 31, 2007. The 12-month PA exemption period for 3 categories of drugs (antidepressants, antipsychotics, and anxiolytics/sedatives) was July 1, 2005, through June 30, 2006; and the post-PA exemption period was the 12 months from January 1, 2007, through December 31, 2007, following rescission of the SPMI exemption. Costs in this analysis were defined as the amount paid by Medicaid, excluding federal drug rebates paid by drug manufacturers and supplemental rebates associated with the PDL program. Costs were adjusted for inflation using the Consumer Price Index for medical costs. Frequencies were used to identify trends between medication classes and time periods. Medical claims from the 2 time periods were used to assess inpatient hospitalization trends. Descriptive statistics, Pearson chi-square tests (for categorical data), and t-tests (for continuous data) were used to assess the 2 study cohorts. RESULTS: 17.8% (n=22,130) of 124,169 eligible beneficiaries in the PA exemption period had 1 or more pharmacy claims in the 3 classes of medications exempt from PA versus 19.2% (n=23,717) of 123,499 eligible beneficiaries in the post-PA exemption period. Utilization of behavioral medications per member per month (PMPM) increased by 14.3% from 0.14 claims PMPM in the PA exemption period to 0.16 claims PMPM in the post-PA exemption period, similar to the 14.1% increase in the utilization of nonbehavioral medications (from 0.64 to 0.73 claims PMPM). Utilization changed little between the PA exemption period and the post-PA exemption period for the 3 individual classes of behavioral health drugs, 0.08 claims PMPM versus 0.09 claims PMPM for antidepressants and 0.03 for both study periods for both antipsychotics and anxiolytics/sedative hypnotics. PMPM costs for the 3 drug classes exempt from PA increased by 2.1% from $12.76 to$13.03, compared with a 12.2% increase from $42.58 PMPM to$47.79 PMPM for nonbehavioral health medications. The small 2.1% increase in PMPM costs for the 3 formerly PA-exempt drug classes was attributable in part to a 12.9% reduction in average cost per pharmacy claim, from $94.05 to$81.92, including a 24.8% reduction in the average cost per antidepressant claim, from $65.59 to$49.33. For the subgroup of beneficiaries taking atypical antipsychotic medications, the percentage with high-dose prescriptions decreased from 3.1% to 2.2%. Mental health inpatient hospitalizations also decreased from 0.6% of beneficiaries in the PA exemption period to 0.4% in the post-PA exemption period. CONCLUSIONS: In a Medicaid population excluding Medicare dual-eligible beneficiaries, the rescission of a PA exemption for 3 major classes of behavioral health medications in a PDL was not associated with decreased utilization of formerly PA-exempt behavioral health medications. The increase in PMPM spending for the formerly PA-exempt behavioral health medications was small compared with the increase in PMPM cost for nonbehavioral health medications, and there were fewer beneficiaries with hospitalization for mental health reasons in the period after rescission of the PA exemption

Implications of Recent Controlled Substance Policy Initiatives

Recent legislative and regulatory activity designed to address controlled substance diversion and overuse of narcotics is having a significant impact on prescription drug utilization and patient care in the United States. Although providers and patients are the focus of these new requirements, the designers and implementers of formularies and medication use protocols need to be aware of salient features of these initiatives. Formulary drug product selection, prior authorization procedures and drug utilization strategies should be reconsidered in accordance with the changes in controlled substance oversight. The primary focus of this article involves recent approaches to controlling the illegal acquisition of licit prescriptions, particularly opioid pain relievers (OPR). According to the Centers for Disease Control and Prevention (CDC), in 2008 OPRs were involved in 74% of the 20,000 fatal prescription drug overdoses in the United States. This represents an increase of over 300% since 1999 and these fatalities now exceed death by cocaine and heroin combined. [Interestingly, the death rate varied five-fold by state, largely reflecting different levels of opioid regulation and oversight. They also noted that sales of OPRs quadrupled between 2000 and 2010 and that OPR abuse cost health insurers over $72 billion annually in healthcare costs

Demographics and the Cost of Pharmaceuticals in a Private Third-Party Prescription Program

Objective: To compare variance in the cost of pharmaceuticals attributable to demographic variables with variance explained by plan characteristics, using prescription claims data within various therapeutic categories, and to examine differences in average cost of pharmaceuticals among demographic variables after controlling for covariates. Design: Retrospective, cross-sectional study. Data Collection: Data for this study were obtained from 1996 prescription claims information for the commercial population administered by a Rhode Island-based pharmacy benefit management (PBM) company. Six therapeutic categories with the highest expenditures were analyzed. Information on claims for six drug categories was extracted using database management software. Statistical analyses using multiple regression and analysis of covariance were carried out. Results: Plan characteristics outperformed demographic variables sixteenfold for all drug categories combined in explaining variance in cost of pharmaceuticals among plan enrollees. Average cost of pharmaceuticals differed among demographic variables such as age, gender, location, and place of employment after controlling for average wholesale price and days supply. Conclusions: The results obtained in this study have practical significance in the determination of capitation rates when utilization history of prospective members is not available. In this situation, managed care organizations (MCOs) or PBMs may have to set capitation rates based solely on eligibility data. Significant differences in average drug costs among the members based on place of employment suggest that benefit managers should consider differentiating capitation rates according to their clients\u27 businesses. Finally, the data from this study indicated that commercial members residing in Tennessee had the lowest average cost of pharmaceuticals among all states evaluated. The fact that one PBM manages more than 80% of the TennCare prescription program along with a significant commercial client base suggests that a spillover effect may exist

Telehealth: Applications from a legal and regulatory perspective

Telehealth is becoming mainstream in the U.S., as more consumers, employers, hospital systems, and even insurers adopt the technology. The authors explore the challenges of regulation, reimbursement, and licensing as the modality evolves

Professional roles evolve with changing landscape of legal risk

Opioid-use monitoring, medication-error prevention, and counseling/duty-to-warn issues illustrate new or emerging legal risks for pharmacists as their roles expand

Hazardous waste compliance in health care settings

Pharmaceutical waste has become an urgent public health and environmental protection issue in recent years, leading to a variety of sometimes-conflicting federal and state legislation and regulations that health care entities must take seriously

Systemic market and organizational changes: Impact on P&T committees

The authors consider market stakeholder consolidation, market-driven efficiency demands, consumerism, and legal enforcement of patient rights related to access to appropriate drugs and posit how future P&T committees may approach these issues

Understanding insurance coverage in the senior market: Reimbursement and emerging trends

Currently, Medicare Part D is the primary payer of pharmaceuticals and driver of formulary selection for most seniors, regardless of their care setting. This primer examines key issues in reimbursement for geriatric care from a historical perspective and how it has affected health care professionals in their clinical and distributive functions. Discussion on how reimbursement trends evolved for older adult patients across care settings such as nursing facilities, assisted living, hospice, and home health are included. Additionally, this primer identifies what is changing across the different care settings, the complexities of medication coverage today, and current trends that may have significant impact on medication cost in the near future if the Affordable Care Act is implemented as currently written. Finally, the primer identifies legislative and regulatory initiatives and reimbursement trends that will continue to pose a challenge in the coming years as Congress and the president address the number of individuals covered by publicly funded programs. This challenge will be amplified in part by a growing biotechnology pharmaceutical pipeline and a rapidly increasing genomics industry. © 2012 American Society of Consultant Pharmacists, Inc. All rights reserved

The affordable care act: New features in 2013

Among the health care changes this year: revenues to hospitals will be lower, payments to physicians will be modified, and more patients will be covered by Medicaid