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Prior Authorization Programs Marked by Wide Variation

All but a few states have implemented some form of Medicaid pharmacy prior authorization (PA) program, but the focus of PA activities and other program characteristics vary widely, according to a recent report in the Parke-Davis Medicaid Pharmacy Bulletin based on survey data from the National Pharmaceutical Council.

Only eight states (Arizona, Connecticut, Delaware, Indiana, Louisiana, New Hampshire, North Carolina, and Wyoming) have not yet implemented Medicaid prior authorization requirements. About 38% of existing programs screen for drug classes only; these programs typically compare reported utilization rates to national averages. About 60% of programs screen for individual drugs only. Just over 25% of states screen for both drug classes and individual drugs.

Selection of products for inclusion on PA lists is driven by a wide range of factors, including comparative cost, potential for abuse or overuse, and reported therapeutic outcomes, in addition to established safety and efficacy. Pharmacists are solely responsible for initiating PA requests in 11 states; in 18 others, either physicians or pharmacists may initiate requests. The number of annual PA requests varies widely from state to state, ranging from 100 or fewer in states such as Nebraska and North Dakota, all the way up to a high of 800,000 in California.

Most states require use of mailed or faxed PA requests; some also require providers to include a written statement of the justification for using an off-list medication or exceeding monthly state limits on the number of medications dispensed. Several states, including California, Florida, Georgia, Oregon, and South Carolina, have set up automated telephone voice response or messaging systems to facilitate processing of requests. To handle emergency requests, most states have PA review staff on duty around the clock: some permit pharmacists to dispense a three- to five-day supply pending a final PA determination.

Some states have created focused prior authorization initiatives targeting specific classes of medications such as benzodiazepines and non-steroidal anti-inflammatory drugs. So far, no state has extended PA policies to cover protease inhibitors and other very expensive AIDS medications, although a movement in this direction is anticipated.

Most states report very high PA approval rates. Last year in California, for instance, 72% of requests were approved outright, another 13% were approved after modification, and about 7% were denied; the remainder were deferred pending receipt of additional information or documentation. Ohio reports a 99% approval rate. Connecticut officials report that they have not denied a single PA request to date.

Bay State Moves to Integrate Services for Dual-Eligibles

Massachusetts health officials are eagerly awaiting a final decision from the Health Care Financing Administration on an ambitious Section 1115 waiver request calling for full integration of services for about 109,000 seniors dually eligible for Medicare and Medicaid.

At the heart of the proposed waiver program is the creation of new "Senior Care Organizations," state-designated entities that would provide full-spectrum services-including primary, acute, and institutional long-term care-within a fully capitated reimbursement structure. Seniors could choose from two or more SCOs.

Legislation under consideration by California lawmakers would make the Golden State the 19th to require insurance companies to cover diabetes care supplies and equipment, as well as self-management training provided by pharmacists and other qualified health professionals.

In July, Louisiana became the 18th state-the 10th this year-to enact a comprehensive diabetes insurance coverage law (see box).