Utilization and Reimbursements Increased Following State Medicaid Expansion, But Newly Covered Patients Were Less Costly Than Existing Patients; JMCP…

Utilization and Reimbursements Increased Following State Medicaid Expansion, But Newly Covered Patients Were Less Costly Than Existing Patients; JMCP Study

ALEXANDRIA, Va., March 14 -- The Academy of Managed Care Pharmacy issued the following news release:

People who gained prescription drug coverage as a result of states expanding Medicaid under the Affordable Care Act (ACA) initially had lower health care costs than people already enrolled in the program, according to a study in the March issue of the Journal of Managed Care & Specialty Pharmacy (JMCP), the official journal of the Academy of Managed Care Pharmacy.

The data suggests that patients entering the program were healthier than existing patients during the initial Medicaid expansion, and that risk pooling worked, concluded the study "Prescription Drug Utilization and Reimbursement Increased Following State Medicaid Expansion in 2014."

Researchers wanted to know how influx of new patients into Medicaid as a result of the ACA would affect average reimbursement per patient. Specifically, they looked at per-member-per-quarter (PMPQ) utilization and reimbursement rates before and after states expanded their Medicaid programs. Both expansion and non-expansion states experienced significant drops in PMPQ prescriptions immediately after expansion, the study found. PMPQ prescriptions and reimbursement trends in the expansion states did increase by the end of the post-expansion period.

The immediate decline in PMPQ utilization trends in expansion states suggests that risk pooling is working with the introduction of new healthy patients into the program, according to authors Nirosha Mahendraratnam, MSPH; Stacie B. Dusetzina, PhD; and Joel F. Farley, PhD. All are researchers at the University of North Carolina, Chapel Hill Eshelman School of Pharmacy.

The study used Medicaid drug utilization data from 2011 to 2014 in eight states that expanded Medicaid in 2014, and 10 states that did not. Expansion states experienced a 1.4 million prescriptions PMPQ and $163 million per quarter increase in utilization and reimbursement above the rates observed in non-expansion states after expansion. One year after ACA implementation, expansion states used 17.0 percent more prescriptions and spent 36.1 percent more in reimbursement than the quarter preceding expansion.

"We expected, and found, that states expanding Medicaid experienced a jump in the volume and spending for prescriptions compared to states that did not expand," said Joel F. Farley, PhD

Professor, Division of Pharmaceutical Outcomes and Policy, UNC Eshelman School of Pharmacy.

"What was interesting, though, was that when you looked at the effect of expanding Medicaid on average across people in the program, spending per member did not increase to the same extent after the ACA," he added. "To us, this suggests that the people who gained Medicaid prescription coverage after the ACA were not initially much more costly than the people enrolled in Medicaid before the ACA."

Farley does note that toward the end of the first year of Medicaid expansion, this spending did increase above what programs might have expected if they had not expanded their program. However, this could be explained in part by the introduction and pent up demand for expensive drugs, such the new Hepatitis C treatments.

A link to the article can be found here (http://www.jmcp.org/doi/abs/10.18553/jmcp.2017.23.3.355). To read the current issue of JMCP, visit www.jmcp.org.

About AMCP

The Academy of Managed Care Pharmacy (AMCP) is the nation's leading professional association dedicated to increasing patient access to affordable medicines, improving health outcomes and ensuring the wise use of health care dollars. Through evidence- and value-based strategies and practices, the Academy's 8,000 pharmacists, physicians, nurses and other practitioners manage medication therapies for the 270 million Americans served by health plans, pharmacy benefit management firms, emerging care models and government. www.amcp.org.

[Category: Pharmaceuticals]

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