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What Drives Spending and Utilization on Medicaid Drug Benefits in States?

December 20, 2014 Comments off

What Drives Spending and Utilization on Medicaid Drug Benefits in States?
Source: Kaiser Family Foundation

Medicaid is one of the country’s biggest payers for prescription drugs, but because prescription drugs have accounted for a small share of total Medicaid spending, Medicaid’s pharmacy benefit policies have not been at the top of mainstream healthcare policy debate. However, with the approval of new specialty drugs, such as the Hepatitis C treatment Sovaldi, states are mindful that the price tag for the Medicaid drug program could increase significantly. While states have implemented many cost-saving policies targeting their Medicaid prescription drug benefits, there remains room for additional cost savings, better management, and improved health outcomes. To ensure appropriate policy for this central benefit and achieve these goals, it is important to understand which drugs are most frequently prescribed and which drive spending.

Using state drug utilization data, as well as an industry drug database, this issue brief examines trends in Medicaid drug prescriptions and drug spending before rebates from 2010 through 2012.1 As part of the Medicaid drug benefit, manufacturers provide rebates to the state and federal government. However, rebates are based on proprietary data and they are not available to the public at the drug level. As a result we are unable to include them, or use this data to calculate total Medicaid drug spending. After presenting this analysis, we place these findings in the context of policy discussions. Key findings of the analysis include:

  • Comprising 35% of prescriptions and 34% of spending before rebates in 2012, Central Nervous System Agents, a class of drugs that include pain killers, antidepressants, and antipsychotics, constitute the largest share of Medicaid drug utilization and spending. Within this drug class, pain killers and fever reducers represent a third of utilization.
  • Specialty drugs account for just two percent of drug utilization in 2012, but they comprise 28% of drug spending. This share increased from 2010 when they totaled 24% of drug spending before rebates. The specialty drug share of total drug spending varies at the state level.
  • Brand-name drugs account for a disproportionate amount of drug spending. In 2012, they accounted for 20% of Medicaid drug prescriptions but 76% of spending. In the past three years, the share of Medicaid drugs that are generic has risen slightly, possibly due to a number of blockbuster brand drugs losing their exclusivity and facing generic competition in the past several years.
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Key Findings on Medicaid Managed Care: Highlights from the Medicaid Managed Care Market Tracker

December 15, 2014 Comments off

Key Findings on Medicaid Managed Care: Highlights from the Medicaid Managed Care Market Tracker
Source: Kaiser Family Foundation

States design and administer their own Medicaid programs within federal rules, and states and the federal government share Medicaid costs and have shared stakes in the program. One of the most important programmatic decisions that states make is how they will deliver and pay for care for Medicaid beneficiaries. Historically, states purchased services largely on a fee-for-service basis. However, since the early 1980s and particularly in recent years, states have increasingly used various models of managed care. The dominant model is comprehensive risk-based managed care, in which states contract with managed care organizations (MCOs) to provide comprehensive acute care, and in some cases long-term services and supports as well, to Medicaid beneficiaries, and pay the MCOs a fixed monthly premium or “capitation rate” on behalf of each enrollee. This model is called risk-based managed care because, through contracts, states shift the financial risk for serving their Medicaid beneficiaries to MCOs.

Today, 39 states contract with a grand total of about 265 MCOs to provide comprehensive Medicaid services; over 90% of Medicaid beneficiaries live in these 39 states. As of September 2014, more than half of all Medicaid beneficiaries nationwide were enrolled in MCOs, and the role of MCOs in Medicaid continues to grow, as an increasing number of states adopt risk-contracting programs, and states with existing programs expand them to include larger geographic areas and beneficiaries with more complex needs, shift from voluntary to mandatory enrollment in MCOs, and move long-term services and supports into capitated arrangements. In addition, states expanding Medicaid under the Affordable Care Act (ACA) are relying largely on MCOs to serve the millions of newly eligible adults. More broadly, the ACA expansions of both Medicaid and private health insurance are fueling dynamism in the managed care market as MCOs and large managed care companies position themselves to take advantage of new opportunities.

New From the GAO

December 12, 2014 Comments off

New GAO Reports
Source: Government Accountability Office

1. Health Care: Information on Coverage Choices for Servicemembers, Former Servicemembers, and Dependents. GAO-15-4, December 12.
http://www.gao.gov/products/GAO-15-4
Highlights – http://www.gao.gov/assets/670/667487.pdf

2. Hurricane Sandy: FEMA Has Improved Disaster Aid Verification but Could Act to Further Limit Improper Assistance. GAO-15-15, December 12.
http://www.gao.gov/products/GAO-15-15
Highlights – http://www.gao.gov/assets/670/667470.pdf

3. VA Health Care: Improvements Needed in Monitoring Antidepressant Use for Major Depressive Disorder and in Increasing Accuracy of Suicide Data. GAO-15-55, November 12.
http://www.gao.gov/products/GAO-15-55
Highlights – http://www.gao.gov/assets/670/666841.pdf

4. College-and-Career Readiness: States Have Made Progress in Implementing New Standards and Assessments, but Challenges Remain. GAO-15-104R, December 12.
http://www.gao.gov/products/GAO-15-104R

5. Grants Management: Programs at HHS and HUD Collect Administrative Cost Information but Differences in Cost Caps and Definitions Create Challenges. GAO-15-118, December 12.
http://www.gao.gov/products/GAO-15-118
Highlights – http://www.gao.gov/assets/670/667506.pdf

6. Grant Program Consolidations: Lessons Learned and Implications for Congressional Oversight. GAO-15-125, December 12.
http://www.gao.gov/products/GAO-15-125
Highlights – http://www.gao.gov/assets/670/667482.pdf

7. Aviation Security: Rapid Growth in Expedited Passenger Screening Highlights Need to Plan Effective Security Assessments. GAO-15-150, December 12.
http://www.gao.gov/products/GAO-15-150
Highlights – http://www.gao.gov/assets/670/667464.pdf
Podcast – http://www.gao.gov/multimedia/podcasts/667489

8. Medicaid: Federal Funds Aid Eligibility IT System Changes, but Implementation Challenges Persist. GAO-15-169, December 12.
http://www.gao.gov/products/GAO-15-169
Highlights – http://www.gao.gov/assets/670/667485.pdf

9. Missile Defense: Cost Estimating Practices Have Improved, and Continued Evaluation Will Determine Effectiveness. GAO-15-210R, December 12.
http://www.gao.gov/products/GAO-15-210R

HHS OIG — Access to Care: Provider Availability in Medicaid Managed Care

December 12, 2014 Comments off

Access to Care: Provider Availability in Medicaid Managed Care
Source: U.S. Department of Health and Human Services, Office of Inspector General

WHY WE DID THIS STUDY
Examining access to care takes on heightened importance as enrollment grows in Medicaid managed care programs. Under the Patient Protection and Affordable Care Act, States can opt to expand Medicaid eligibility, and even States that have not expanded eligibility have seen increases in enrollment. Most States provide some of their Medicaid services-if not all of them-through managed care. OIG received a congressional request to evaluate the adequacy of access to care for enrollees in managed care. This report determines the extent to which providers offer appointments to enrollees and the timeliness of these appointments. A companion report issued earlier this year, State Standards for Access Care in Medicaid Managed Care, OEI-02-11-00320, found that State standards for access to care vary, and that they are often not specific to certain provider types or to areas of the State. Additionally, States have different strategies to assess compliance with access standards.

HOW WE DID THIS STUDY
We based this study on an assessment of availability of Medicaid managed care providers. The assessment included calls to a stratified random sample of 1,800 primary care providers and specialists to assess availability and timeliness of appointments for enrollees.

WHAT WE FOUND
We found that slightly more than half of providers could not offer appointments to enrollees. Notably, 35 percent could not be found at the location listed by the plan, and another 8 percent were at the location but said that they were not participating in the plan. An additional 8 percent were not accepting new patients. Among the providers who offered appointments, the median wait time was 2 weeks. However, over a quarter had wait times of more than 1 month, and 10 percent had wait times longer than 2 months. Finally, primary care providers were less likely to offer an appointment than specialists; however, specialists tended to have longer wait times.

WHAT WE RECOMMEND
Together, these findings-along with those from our companion report-call for CMS to work with States to improve the oversight of managed care plans. We recommend that CMS work with States to (1) assess the number of providers offering appointments and improve the accuracy of plan information, (2) ensure that plans’ networks are adequate and meet the needs of their Medicaid managed care enrollees, and (3) ensure that plans are complying with existing State standards and assess whether additional standards are needed. CMS concurred with all three of our recommendations.

New From the GAO

December 8, 2014 Comments off

New GAO Report
Source: Government Accountability Office

Medicare: Bidding Results from CMS’s Durable Medical Equipment Competitive Bidding Program. GAO-15-63,November 7.
http://www.gao.gov/products/GAO-15-63
Highlights – http://www.gao.gov/assets/670/666807.pdf

New From the GAO

November 25, 2014 Comments off

New GAO Reports
Source: Government Accountability Office
1. Group Purchasing Organizations: Funding Structure Has Potential Implications for Medicare Costs. GAO-15-13, October 24.
http://www.gao.gov/products/GAO-15-13
Highlights – http://www.gao.gov/assets/670/666643.pdf

2. Medicare Program Integrity: CMS Pursues Many Practices to Address Prescription Drug Fraud, Waste, and Abuse. GAO-15-66, October 24.
http://www.gao.gov/products/GAO-15-66
Highlights – http://www.gao.gov/assets/670/666648.pdf

New From the GAO

November 24, 2014 Comments off

New GAO Reports
Source: Government Accountability Office
1. Group Purchasing Organizations: Funding Structure Has Potential Implications for Medicare Costs. GAO-15-13, October 24.
http://www.gao.gov/products/GAO-15-13
Highlights – http://www.gao.gov/assets/670/666643.pdf

2. Medicare Program Integrity: CMS Pursues Many Practices to Address Prescription Drug Fraud, Waste, and Abuse. GAO-15-66, October 24.
http://www.gao.gov/products/GAO-15-66
Highlights – http://www.gao.gov/assets/670/666648.pdf

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