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's 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.