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In 18 of 20 states with the largest Medicaid managed care populations, pharmacy benefits are included in some or all capitation contracts. But this strategy remains controversial, especially from a quality standpoint, and some Medicaid officials continue to argue for pharmacy carve-outs.

A recent issue of the Parke-Davis Medicaid Pharmacy Bulletin looks at current and planned managed care pharmacy experiments in several states, including New Mexico, which is set to launch a new pharmacy capitation program in April 1997.

A New Mexico Medicaid pharmacy consultant who was interviewed for the report expressed concern that folding pharmacy into the managed care capitation rate will reduce outpatient access to medications, reduce access to high-cost drugs, and ultimately increase, not decrease, overall program costs.

Moreover, the New Mexico consultant fears, pharmacy capitation will undercut the state's investment in prospective and retrospective drug use review (DUR) and electronic claims management systems that are yielding solid cost savings.

Other Medicaid officials, however, are convinced that pharmacy benefits must be built into the managed care capitation structure. If pharmacy is carved out, they argue, contractors cannot fully manage patient care, and the fundamental goals of managed care-improved coordination of services and program cost savings-are defeated. In response to critics' assertions that managed care plans aren't providing accurate encounter data needed for cost and outcomes monitoring, capitation proponents argue that states must specify exactly what sort of data they want contractors to provide and be more aggressive in enforcing contract terms.

The Parke-Davis report also assesses state oversight of Medicaid managed care formularies. So far, the main thrust of oversight is case-by-case investigation of specific enrollee complaints, usually involving denied access to high-cost drugs such as protease inhibitors. In most states, managed care formularies must be comparable to the Medicaid fee-for-service formulary, or contractors must provide other avenues of access to drugs that would be available under fee-for-service.

Formulary oversight is expected to tighten as more high-utilizing elderly and disabled enrollees come into Medicaid managed care.

ASCP recently published an important new resource to help consultant pharmacists educate managed care organizations about their services and proper pharmacy benefit design.

Pharmacy Services in Long-Term Care: A Guide for Managed Care Plans is a companion piece to ASCP's Model Long-Term Care Benefit document, issued in July 1995. The new guide presents an overview of innovative managed care initiatives in Arizona, Minnesota, Tennessee, and South Carolina; detailed guidelines for managed care plans to use in structuring pharmacy benefits and protocols; and an overview of essential pharmacist services, including drug regimen review, utilization management activities, in-service training, continuous quality improvement activities, and interdisciplinary care planning. To receive a copy of this 10-page guide, send a self-addressed, stamped (96¢ postage) 9 x 12 envelope to:

Managed Care Guide

ASCP

1321 Duke Street

Alexandria, VA 22314

The New Jersey Department of Health and Senior Services (DHSS)has received a $700,000 grant from the Robert Wood Johnson Foundation to develop and test new nursing home quality improvement methods based on information gleaned from the federal Minimum Data Set (MDS 2.0).

Under a two-year pilot program, DHSS will routinely conduct in-depth analyses of MDS data from 20 nursing facilities, focusing on rough indicators of quality of care such as use of restraints, prevalence of depressive symptoms, and incidences of falls and injuries. The findings will be used for benchmarking and facility-to-facility quality comparisons.

As of mid-December, more than 20 state Medicaid waiver requests were awaiting federal approval, reports HCFA.

To help ASCP members stay current on a growing number of state managed care programs, ASCP has compiled fact sheets on all pending and approved Section 1115 waiver initiatives. This information can be accessed in the Government Affairs and Consult Net sections of ASCP's new World Wide Web home page at http://www.ascp.com.