Medicaid spending and utilization for central nervous system drugs

Health Care Financing Review, Fall, 2004 by David K. Baugh, Penelope L. Pine, Steve Blackwell, Gary Ciborowski

INTRODUCTION

In this article, we present Medicaid prescription drug spending on CNS drugs for 29 States for which SMRF data are available in 1998. The SMRF prescription drug records include coding that allowed us to analyze prescription drug utilization and spending by therapeutic use. Because there is substantial variation in Medicaid Program characteristics across States, we did not attempt to estimate national Medicaid utilization and spending for CNS drugs.

In other research we have shown that national Medicaid prescription drug spending grew from $4.4 billion in 1990 to over $20 billion in 2000, representing an average annual increase of 16.3 percent during the decade. The average annual increase was even greater for the disabled at over 20 percent. We found that the percentage of total Medicaid prescription drug payments for the disabled increased from just over 40 percent to nearly 60 percent during those 10 years. We also showed that the disabled and aged eligibility groups represented a disproportionate share of total drug spending. Together, these 2 groups represented only 29.1 percent of Medicaid drug recipients in FY 2000, but they accounted for 84.9 percent of Medicaid drug payments. By therapeutic category, the largest percentage of total Medicaid prescription drug payments (17 percent in 1997) was for CNS drugs (Baugh et al., 2004). The statistics presented here were produced to develop a better understanding about the factors driving Medicaid prescription drug spending variations.

The tables and figures use 1998 data for all 29 of the States available in the SMRF data (Centers for Medicare & Medicaid Services, 2003). They present data on prescription drug recipients, number of prescriptions and Medicaid payments for drugs by eligibility group, therapeutic category, and group and individual State.

In the tables and figures, Medicaid eligibility is presented for four major eligibility groups: aged, disabled, adults, and children. The disabled group includes beneficiaries of any age who were determined to be eligible because of disability or blindness. The children's group includes foster care and adoptive services children. There were a small number of beneficiaries with unknown basis of eligibility that is not reported.

The data are presented for all of the Medi-Span therapeutic categories (Wolters Kluwer Health, 2003) in Figures 1 and 2. In Figures 3 through 11, data are presented by four of the Medi-Span therapeutic groups (anti-anxiety agents, anti-depressants, anti-psychotics, and hypnotics) within the CNS category. Additionally, data for individual SMRF States are presented within their respective regions in Figures 10 and 11. Tables 1 and 2 provide detailed information on CNS drug payments, number of prescriptions by State and basis of eligibility. Table 3 provides further detail on drug payments number of prescriptions, and drug recipients for the four CNS drug groups.

Analysis of utilization and spending for prescription drugs by therapeutic use for the dually eligible (persons eligible to receive both Medicaid and Medicare services) will be presented in later research. This is because the data for 1999, and later years contain more detailed information on dually eligible status. Future research will also examine utilization and spending for brand-name, off-patent brand-name and generic drugs.

CONCLUSION

In 1998, CNS drugs was the most expensive therapeutic category of drugs for the 29 State Medicaid Programs in our study. The greatest increases in Medicaid drug spending by therapeutic category between 1996 and 1998 were also observed for CNS drugs. Among eligibility groups, the disabled, in these States, accounted for the largest percentage of total Medicaid spending for CNS drugs at 71 percent in 1996, increasing to 73 percent in 1998. Spending for CNS drugs in 1998 was $1,102 for the disabled, compared to $291 for the aged, $66 for adults and $52 for children. Among the four CNS drug groups, high numbers of prescriptions per recipient, and high payment per prescription led to the highest payments per recipient for anti-psychotics, regardless of eligibility group. Among SMRF States and census regions, there were major variations in payments per recipient and prescriptions per recipient for CNS drugs.

TECHNICAL NOTES

As of June 1998, many States had prepaid health care plans coveting at least some State beneficiaries. These plans may have provided limited or comprehensive coverage of prescription drugs. Based on available data, it is not possible to develop accurate counts of drug recipients, number of prescriptions, and payments for drugs provided by prepaid plans. Therefore, the data presented here are for FFS prescriptions. Previous research showed that the percentage of beneficiaries who were enrolled in prepaid plans and received no FFS drugs was 33 percent in 1998 across all eligibility groups, but varied by State from below 2 percent (9 States) to 57 percent (New Mexico). The percentage was lower for aged and disabled beneficiaries (12 and 17 percent, respectively) than for children and adults (41 and 36 percent, respectively).