Managed Medicaid captures almost half of fee-for-service Rxs, shifts patient care


IMS study analyzes the shift from fee-for-service in four states through changes in prescriptions for antipsychotic drugs, diabetes therapies, and respiratory medications


The shift of Medicaid patients from fee-for-service to Managed Medicaid during 2011 resulted in a massive shift of prescriptions nationally, with nearly half of all Medicaid prescriptions now filled by Managed Medicaid, according to a recent study released by the IMS Institute for Healthcare Informatics. Study findings were presented April 4 during the Academy of Managed Care Pharmacy Annual Meeting in San Diego.

The study

“Medicaid accounts for 16 cents of every U.S. healthcare dollar, and is expected to grow to 20% by 2021 largely driven by the upcoming expansion of Medicaid as part of the Affordable Care Act,” stated the IMS Institute study, “Impact on Patient Care of Shift From Fee-For-Service to Managed Medicaid.”  


“The shared cost model between states and the federal government, combined with the continuing weak economic climate and the impending expansion, has prompted many states to shift from historically common fee-for-service payment models to managed care models, and several states with large Medicaid populations made such changes during 2011,” the report noted.


Other considerations for making the shift include expected savings in drug-cost rebates, lower dispensing fees and  ingredient costs to pharmacies, and potential for lowering both usage rates and cost escalation trends.


With states playing a bigger role in the healthcare system overall next year as a result of the Medicaid expansion, the IMS Institute decided to share recent data on prescription drug utilization in four states that have moved a substantial number of Medicaid beneficiaries to Managed Medicaid. 


“Prescription drug usage is typically an indicator of effective overall disease management, particularly in chronic diseases such as these,” noted the report’s introduction. 


The number of monthly prescriptions dispensed through Managed Medicaid increased from 4.9 million in September 2011 to 12.5 million in June 2012, according to study data.


The study analyzed the impact of care on Managed Medicaid beneficiaries in Kentucky, New Jersey, New York, and Ohio since 2011, focusing on three therapeutic areas: antipsychotic drugs, diabetes agents, and respiratory medications. According to the report, the initial impact, in the first nine months following the change, showed widely varying impacts on patient care. Some therapy areas in some states showed essentially no change from Fee-for-service programs, while others showed significant changes.


“We compared prescription drug use for the cohort of patients for 9 to 12 months before moving into a Managed Medicaid plan and then 9 to 12 months after the change to Managed Medicaid. 


“We also took a look at a cohort of patients who were in a fee-for-service model and remained there,” said Murray Aitken, executive director, IMS Institute for Healthcare Informatics, adding, “While it is still early days, our research reveals some important signs of impact.”


Antipsychotic use



All four states analyzed in the study demonstrated a greater use of antipsychotic generic drugs when they were available for Managed Medicaid beneficiaries compared with fee-for-service Medicaid patients, Aitken said. 


“The generic utilization rates for Managed Medicaid patients taking antipsychotics were between 3% and 14% higher than for fee-for-service patients in each state after the policy shifts,” he said. “Patients in Managed Medicaid plans in Kentucky and New Jersey were more likely to be using generic antipsychotic medicines compared to those in fee-for-service plans.”


During the study period, both Zyprexa and Seroquel lost patent exclusivity and generics became available. During the post-policy shift period, more than 55% of Managed Medicaid beneficiaries in Kentucky were using antipsychotic generics. In Ohio, the percentage was about 47%, in New Jersey, it was about 48%, and in New York, it was 51%.


“There is still variation in terms of the extent to which generics are used. In addition, there is also a variation in terms of Managed Medicaid plans versus fee-for-service plans,” Aitken noted.


Diabetes care


The IMS study also showed the impact upon care of diabetes patients moved to Managed Medicaid plans.


In New York, more diabetes patients received diabetes drugs, with an increase in the average number of prescriptions in the post-policy shift period of 5% (and an increase of 13% in prescriptions for the most commonly used diabetes treatment) and a change from an annualized average of 11.2 scripts per patient to 11.8 scripts per patient. 


In the fee-for-service cohort, the average number of diabetes medications remained stable at about 12 scripts before and after policy changes.


“Aggressive management of diabetes is understood by the Managed Medicaid plans to be an important way to manage the overall costs. With the prescription drug benefits being carved in now, there is a greater incentive for the plans to be optimizing the treatment overall for the patient,” Aitken told Drug Topics


He added, “We also saw a greater use of metformin and the lower-cost drugs for the treatment of diabetes.”


Respiratory medications


Patients in Kentucky with respiratory disorders who were switched to Managed Medicaid had an increased utilization rate of 5% compared to only a 3% increase for the patients who remained in fee-for-service Medicaid during the study. In New Jersey and Ohio, Managed Medicaid patients used 1% more prescriptions per patient in each state. All Managed Medicaid programs showed an increase in scripts per patient per month in all three states. 


“It would be interesting to talk to state Medicaid directors in these different states to compare notes on what is going on,” Aitken noted. “We also see absolute levels of some of these drugs. When you see significant variations, it would be difficult to conclude that everyone is optimized.”


Fee-for-service patients in Kentucky, Ohio, and New Jersey used approximately 26% to 27% more respiratory prescriptions per patient than managed care patients did, both before and after the policy shift.


“This was consistent with the policy that more severely ill patients remain on fee-for-service payment models,” Aitken said.




Significant variation across states and therapeutic areas continue to exist after the shift to Managed Medicaid, the study noted, reflecting longstanding differences in clinical practice, Medicaid program design, and patient profiles.


Further analyses are warranted to determine the impact on health outcomes and the overall costs associated with Medicaid programs, the report concluded.


“We urge states to put systems in place to measure and monitor prescription drug use and ultimately outcomes. Each year states will need to assess the impact of these programs on the health of the Medicaid population,” Aitken said.


Edith A. Rosato, RPh, IOM, CEO of the Academy of Managed Care Pharmacy, said in a press statement that the Academy was encouraged by the positive results of the study on patients who received care through Managed Medicaid programs.


“Given the variability in state programs, Managed Medicaid plans will need to be continually evaluated,” Rosato said. 


She added, “Initial findings suggest that patients could be better managed in these programs, particularly when the drug benefit is carved into a state’s managed care plan rather than maintained in a fee-for-service program.”

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