Medicaid Authority under Fire Drug Approval in Tug-of-War

By LoMonte, Frank | The Florida Times Union, March 16, 1997 | Go to article overview

Medicaid Authority under Fire Drug Approval in Tug-of-War


LoMonte, Frank, The Florida Times Union


ATLANTA -- The state spent almost $6 million in one recent year

to fill 371,000 prescriptions for Medicaid patients'

pain-killing drugs.

Then, suspicious auditors put the drugs under "prior approval,"

meaning the doctor needed to phone or fax Medicaid reviewers

before the state would pay for the prescription.

Five years later, spending was down to $296,000 for just 21,478

prescriptions. That's a 95 percent savings, even as Medicaid was

growing to cover 400,000 more people.

"It just plummeted, appropriately," said Charles Callahan,

executive director of the Georgia Pharmacy Foundation, who noted

that the class of drugs included Valium, Xanax and other widely

abused pain-killers.

"The percentage of Medicaid recipients on these drugs compared

with privately insured or cash patients was very alarming,"

Callahan said. "When they are over-prescribed and over-utilized,

you basically don't want to get out of bed."

Callahan's group is paid $1 million a year by Medicaid to

review requests for 100 drugs that are considered high-cost,

experimental or prone to improper use.

But Medicaid would lose that authority under a bill that has

passed the Senate overwhelmingly and awaits action in the House.

The measure by Sen. Nadine Thomas, D-Atlanta, would require

Medicaid to pay for any federally approved drug regardless of

cost.

It has the support of influential drug companies from across

the country, which are looking to Georgia as a battleground

because its list of drugs requiring prior approval is the

longest anywhere.

The bill also would prevent Medicaid from insisting on generic

drugs instead of higherpriced but medically equivalent brand

names. Instead, the judgment would be left up to individual

pharmacists.

State auditors estimate the bill could explode Medicaid costs

by $50 million a year.

Thomas and the drug industry say that figure is misleading,

because it doesn't account for money Medicaid might spend if

people who are denied drugs become sicker.

"The bottom line is, you are denying access to people. What

it's saying is, poor people and senior citizens do not deserve

quality care," said Thomas, a registered nurse.

Medicaid, which spends $310 million a year on drugs, has

contracted with Georgia pharmacists to screen prescription

requests since 1991.

But two events in 1996 set off a political firestorm that made

the pre-approval program suddenly controversial.

One was the move in November to put mood-altering drugs on the

prior approval list. The decision was made after a potent new

anti-psychotic drug, Risperdal, came on the market in 1994 and

within one year became a $5 million-a-year Medicaid expense.

"We were seeing prescriptions for kids as young as 22 months.

They were prescribing it for bed wetting, anxiety, everything,"

said Marjorie Smith, the state's Medicaid commissioner.

That mobilized drug manufacturers and mental health advocates,

who came forward with horror stories about children driven into

the hospital when their urgently needed Risperdal was turned

down.

Physicians complained of administrative glitches when their

Medicaid approval forms were faxed back "rejected" for a small

omission, forcing patients to wait hours or even days to learn

if their drugs would be covered.

Smith and Callahan say the complaints exposed legitimate

administrative problems, which can be fixed without repealing

the entire drug review process. …

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