As states grapple with increasing prescription drug costs in their Medicaid plans, many have begun to employ utilization management techniques, like fail-first strategies or restricted formularies, to cap costs. But such restrictions on mental health medications in Medicaid are adversely affecting patient outcomes and increasing administrative costs for community mental health providers, according to a new survey conducted by the National Council for Behavioral Health and the National Alliance on Mental Illness (NAMI).
In Illinois, for example, the state placed restrictions on 17 psychiatric medications and in 2013, capped the number of all prescriptions for Medicaid recipients to four per month without prior approval. More than a dozen other states have similar script limits, although some exempt psychiatric medications.
However, it’s not clear that this strategy is actually reducing overall costs.
“It’s difficult to quantify long-term costs when people are not adhering to treatment, and utilizing high cost services like jails and emergency rooms,” says Andrew Sperling, director of federal legislative advocacy for NAMI. “In Medicare Part D, where we have broad access protection in place, we have not seen costs explode.”
Mental health prescriptions account for a significant chunk of the rapid growth in Medicaid prescription costs (as much as 40 percent or more, according to some estimates), which is why states are targeting those drugs. According to the National Association of State Budget Officers’ Fiscal 2014 report, five states took budget action to limit prescription drugs within Medicaid last year, and another 11 states had pursued other efforts to reduce such costs. For 2015, those numbers were three and nine, respectively.
And it’s not just Medicaid. Commercial plans and health-insurance-exchange plans have also implemented formulary controls that target psychiatric medications. Prescription benefit management (PBM) services are similarly placing limits on everything from high-priced cancer drugs to hepatitis-C treatments.
Barriers to access
Patients can be adversely affected by policies that limit use of prescribed medications, or require providers to use step therapy approaches (also called “fail first”) because of logistics. Three-quarters of respondents to the National Council survey said that patients had trouble complying with their medication plans, and 62 percent said patients experienced increased emergency department visits, hospitalizations and healthcare costs.
“When patients are faced with these barriers, they are far less likely to adhere to their ideal medication regimen,” says Rebecca Farley, director of policy and advocacy at the National Council. “That leads to all sorts of negative outcomes, like increased hospitalizations. Our psychiatrists also indicated that they see higher rates of incarceration, and that’s a cost that could potentially be avoided if people had access to treatment at the right time.”
That means that although many states have implemented these policies to reduce the rapidly rising cost of medications for their own budgets, they are likely increasing administrative costs for providers and other secondary costs. According to the Journal of the American Board of Family Medicine (January-February 2013), primary care doctors spend $3,430 in labor costs related to prior authorization tasks in a single year.
"Why do you need to spend 45 minutes on the phone to get a prior authorization on a generic antidepressant?”
“The physician should have full range of access to drugs without question. The problem is that most of these restrictions are not evidence-based; they are cost-based,” says Sam Muszynski, director of the American Psychiatric Association’s office of healthcare systems and financing. “The amount of uncompensated time required to get a simple prior authorization even on generic drugs is absolutely insane. Why do you need to spend 45 minutes on the phone to get a prior authorization on a generic antidepressant?”
Cutting into treatment time
The most common obstacles that state plans have put in place are prior authorizations, preferred drug lists, limitations on the number of prescriptions a patient can access, or fail-first/step therapy requirements. All of these can influence how psychiatrists approach treatment.
“It changes how psychiatrists decide what medications to prescribe,” says Ruth Shim, one of the authors of the survey. “You have to think twice about prescribing the medication you think will work the best, because of the prior authorization process that might go along with the medication.”
The provider survey examined how these restrictions are affecting patient outcomes, based on responses from National Council-affiliated psychiatrists in community mental health centers.
More than one-third of respondents reported that they spent between 11 percent and 20 percent of their time handling tasks related to prior authorizations. One in 10 reported spending 40 percent or more of their time on utilization management-related tasks. Since available drugs have variable levels of tolerability depending on the patient, and some patients might try multiple meds before finding a good fit, doctors could spend more time on drug approvals than actual treatment.
“As a clinician, I know these barriers get in the way of being able to practice,” says Shim, who is with the Department of Psychology at New York City’s Lenox Hill Hospital. “There’s a lot of faxing, filling out paperwork, and re-appealing.”