Abstract
Prior research has shown that prescription drug spending grew substantially during the decade of the 1990s. This analysis uses 1996 to 1998 State Medicaid Research File (SMRF) fee-for-service (FFS) data for 29 participating States to provide insight into the factors driving this growth. The analysis examines cost variation by census region, State, Medicaid basis of eligibility, and therapeutic use of drugs. In 1998, the highest expenditures were for central nervous system (CNS) drugs and for anti-psychotics compared to three other groups of CNS drugs (anti-anxiety agents, anti-depressants, and hypnotics). By eligibility group, expenditures were typically highest for disabled enrollees. There were major variations among SMRF States and their respective regions.
Introduction
In this article, we present Medicaid prescription drug spending on CNS drugs for 29 States for which SMRF data are available in 1998. The SMRF prescription drug records include coding that allowed us to analyze prescription drug utilization and spending by therapeutic use. Because there is substantial variation in Medicaid Program characteristics across States, we did not attempt to estimate national Medicaid utilization and spending for CNS drugs.
In other research we have shown that national Medicaid prescription drug spending grew from $4.4 billion in 1990 to over $20 billion in 2000, representing an average annual increase of 16.3 percent during the decade. The average annual increase was even greater for the disabled at over 20 percent. We found that the percentage of total Medicaid prescription drug payments for the disabled increased from just over 40 percent to nearly 60 percent during those 10 years. We also showed that the disabled and aged eligibility groups represented a disproportionate share of total drug spending. Together, these 2 groups represented only 29.1 percent of Medicaid drug recipients in FY 2000, but they accounted for 84.9 percent of Medicaid drug payments. By therapeutic category, the largest percentage of total Medicaid prescription drug payments (17 percent in 1997) was for CNS drugs (Baugh et al., 2004). The statistics presented here were produced to develop a better understanding about the factors driving Medicaid prescription drug spending variations.
The tables and figures use 1998 data for all 29 of the States available in the SMRF data (Centers for Medicare & Medicaid Services, 2003). They present data on prescription drug recipients, number of prescriptions and Medicaid payments for drugs by eligibility group, therapeutic category, and group and individual State.
In the tables and figures, Medicaid eligibility is presented for four major eligibility groups: aged, disabled, adults, and children.The disabled group includes beneficiaries of any age who were determined to be eligible because of disability or blindness. The children's group includes foster care and adoptive services children. There were a small number of beneficiaries with unknown basis of eligibility that is not reported.
The data are presented for all of the Medi-Span therapeutic categories (Wolters Kluwer Health, 2003) in Figures 1 and 2. In Figures 3 through 11, data are presented by four of the Medi-Span therapeutic groups (anti-anxiety agents, anti-depressants, anti-psychotics, and hypnotics) within the CNS category. Additionally, data for individual SMRF States are presented within their respective regions in Figures 10 and 11. Tables 1 and 2 provide detailed information on CNS drug payments, number of prescriptions by State and basis of eligibility. Table 3 provides further detail on drug payments number of prescriptions, and drug recipients for the four CNS drug groups.
Table 1. Medicaid Central Nervous System Drug Prescriptions for 29 SMRF States, by Basis of Eligibility: 1998.
State | Basis of Eligibility1 | ||||
---|---|---|---|---|---|
| |||||
Aged | Disabled | Adults | Children | Total | |
| |||||
Number of Prescriptions 2 | |||||
Alabama | 171,947 | 504,090 | 21,628 | 29,080 | 726,745 |
Alaska | 14,938 | 57,966 | 19,740 | 7,884 | 100,528 |
Arkansas | 168,518 | 277,592 | 20,818 | 37,310 | 504,238 |
California | 711,050 | 3,035,654 | 237,501 | 137,803 | 4,122,009 |
Colorado | 136,643 | 236,098 | 18,384 | 25,501 | 416,642 |
Delaware | 22,269 | 67,156 | 37,825 | 7,338 | 134,588 |
Florida | 766,658 | 1,607,891 | 130,075 | 78,286 | 2,583,962 |
Georgia | 258,379 | 701,627 | 76,746 | 82,893 | 1,119,645 |
Idaho | 38,329 | 97,648 | 12,570 | 7,944 | 156,500 |
Indiana | 405,514 | 632,326 | 46,661 | 77,296 | 1,161,797 |
Iowa | 196,453 | 347,691 | 55,094 | 51,389 | 650,627 |
Kansas | 121,809 | 220,008 | 18,279 | 36,046 | 396,142 |
Kentucky | 281,661 | 705,378 | 62,725 | 38,492 | 1,088,256 |
Maine | 122,442 | 294,946 | 43,276 | 27,109 | 487,773 |
Michigan | 314,254 | 797,577 | 80,521 | 51,202 | 1,243,555 |
Minnesota | 175,263 | 553,531 | 34,927 | 30,500 | 794,269 |
Missouri | 471,605 | 819,058 | 48,636 | 58,986 | 1,398,285 |
Mississippi | 171,817 | 370,791 | 13,963 | 21,544 | 578,122 |
Montana | 41,782 | 91,775 | 24,470 | 14,447 | 172,474 |
New Hampshire | 81,801 | 149,197 | 30,792 | 22,205 | 284,023 |
New Jersey | 305,276 | 871,779 | 11,479 | 24,812 | 1,213,346 |
New Mexico | 44,840 | 84,471 | 4,456 | 4,651 | 138,418 |
North Dakota | 48,596 | 55,052 | 8,640 | 9,470 | 121,761 |
Pennsylvania | 882,389 | 1,235,475 | 100,090 | 92,077 | 2,310,031 |
Utah | 55,015 | 183,466 | 49,288 | 29,469 | 317,238 |
Vermont | 63,063 | 115,290 | 8,895 | 6,295 | 193,553 |
Washington | 313,891 | 805,026 | 26,117 | 16,452 | 1,161,486 |
Wisconsin | 312,086 | 770,476 | 11,362 | 21,238 | 1,115,162 |
Wyoming | 17,505 | 31,165 | 6,060 | 6,023 | 60,753 |
The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash assistance status. The disabled group includes individuals of any age who were determined to be eligible because of disability or blindness. The children's group includes foster care and adoptive service children. There were a small number of beneficiaries with unknown basis of eligibility that are not reported here.
Many States had prepaid care plans covering at least some State beneficiaries, as of June, 1998. These plans may have provided limited or comprehensive coverage of prescription drugs. It is not possible to reliably identify number of prescriptions or prescription payments for drugs provided by prepaid plans, at this time. Therefore, the number of prescriptions reported here are FFS prescriptions.
SOURCE: Centers for Medicare & Medicaid Service, Office of Research, Development, and Information: State Medicaid Research Files (Wolters Kluwer Health, 2003).
Table 2. Medicaid Central Nervous System Drug Payments for 29 SMRF States, by Basis of Eligibility: 1998.
State | Basis of Eligibility1 | ||||
---|---|---|---|---|---|
| |||||
Aged | Disabled | Adults | Children | Total | |
| |||||
Payments 2 | |||||
Alabama | $6,841,244 | $27,736,229 | $928,588 | $931,047 | $36,437,108 |
Alaska | 654,159 | 4,876,003 | 1,038,196 | 462,920 | 7,031,278 |
Arkansas | 7,316,446 | 19,696,533 | 1,058,098 | 1,183,069 | 29,254,146 |
California | 31,704,133 | 251,645,261 | 14,778,779 | 7,748,932 | 305,877,110 |
Colorado | 5,764,531 | 16,613,279 | 900,106 | 1,574,526 | 24,853,899 |
Delaware | 917,749 | 4,433,952 | 1,912,480 | 392,208 | 7,656,389 |
Florida | 32,696,077 | 100,966,854 | 6,049,983 | 3,633,971 | 143,412,985 |
Georgia | 11,846,366 | 41,529,239 | 3,476,343 | 2,674,333 | 59,526,281 |
Idaho | 1,738,070 | 6,904,317 | 696,561 | 388,892 | 9,728,136 |
Indiana | 18,612,307 | 42,820,396 | 1,884,973 | 4,133,690 | 67,451,366 |
Iowa | 8,225,276 | 23,986,931 | 2,844,952 | 2,398,802 | 37,455,961 |
Kansas | 6,524,859 | 18,870,043 | 1,113,764 | 2,088,952 | 28,597,618 |
Kentucky | 9,896,521 | 43,644,882 | 3,589,750 | 2,001,462 | 59,132,615 |
Maine | 4,930,283 | 18,359,145 | 2,256,591 | 1,460,408 | 27,006,427 |
Michigan | 12,887,267 | 54,455,868 | 4,203,415 | 2,464,934 | 74,011,504 |
Minnesota | 6,841,346 | 43,380,860 | 1,924,636 | 1,491,574 | 53,639,902 |
Missouri | 21,746,673 | 58,443,776 | 2,221,506 | 2,794,390 | 85,206,345 |
Mississippi | 8,282,750 | 25,857,206 | 738,810 | 884,603 | 35,763,831 |
Montana | 1,654,862 | 6,199,776 | 1,403,836 | 581,051 | 9,839,525 |
New Hampshire | 3,484,394 | 10,332,423 | 1,664,046 | 1,226,384 | 16,708,049 |
New Jersey | 12,949,124 | 58,072,673 | 534,106 | 1,422,274 | 72,978,177 |
New Mexico | 1,861,342 | 4,915,629 | 180,388 | 230,280 | 7,187,639 |
North Dakota | 2,142,739 | 3,821,249 | 426,576 | 485,242 | 6,875,877 |
Pennsylvania | 39,302,482 | 86,177,707 | 5,336,162 | 5,090,895 | 135,907,246 |
Utah | 2,496,666 | 12,571,566 | 2,547,254 | 1,396,699 | 19,012,185 |
Vermont | 2,437,913 | 7,855,093 | 404,361 | 328,719 | 11,026,342 |
Washington | 12,648,430 | 55,608,492 | 1,200,494 | 812,246 | 70,269,662 |
Wisconsin | 13,879,770 | 49,877,012 | 540,318 | 1,152,095 | 65,449,195 |
Wyoming | 795,638 | 2,451,716 | 337,346 | 340,886 | 3,925,586 |
The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash assistance status. The disabled group includes individuals of any age who were determined to be eligible because of disability or blindness. The children's group includes foster care and adoptive service children. There were a small number of beneficiaries with unknown basis of eligibility that are not reported here.
Many States had prepaid care plans covering at least some State beneficiaries, as of June, 1998. These plans may have provided limited or comprehensive coverage of prescription drugs. It is not possible to reliably identify number of prescriptions or prescription payments for drugs provided by prepaid plans, at this time. Therefore, the payments reported here are for FFS prescriptions.
SOURCE: Centers for Medicare & Medicaid Services, Office of Research, Development, and Information: State Medicaid Research Files (Wolters Kluwer Health, 2003).
Table 3. Medicaid Central Nervous System (CNS) Drug Prescriptions, Payments and Recipients for 29 SMRF States, by Basis of Eligibility and CNS Drug Group: 1998.
Measure2 | Basis of Eligibility1 | |||
---|---|---|---|---|
| ||||
Aged | Disabled | Adults | Children | |
Number of Prescriptions | ||||
Anti-Anxiety Agents | 1,563,419 | 2,696,771 | 303,251 | 195,616 |
Anti-Depressants | 3,031,053 | 6,138,328 | 766,631 | 574,643 |
Anti-Psychotics | 1,467,216 | 5,585,437 | 112,323 | 237,910 |
Hypnotics | 654,105 | 1,299,664 | 78,813 | 45,573 |
All CNS Drugs | 6,715,793 | 15,720,200 | 1,261,018 | 1,053,742 |
Payments | ||||
Anti-Anxiety Agents | $42,572,746 | $85,985,350 | $7,066,669 | $3,198,307 |
Anti-Depressants | 138,472,269 | 350,282,331 | 47,408,021 | 27,874,447 |
Anti-Psychotics | 95,034,419 | 637,882,904 | 9,442,813 | 20,259,345 |
Hypnotics | 14,999,983 | 27,953,525 | 2,274,915 | 443,227 |
All CNS Drugs | 291,079,417 | 1,102,104,110 | 66,192,418 | 51,775,326 |
Recipients | ||||
Anti-Anxiety Agents | 289,083 | 498,291 | 111,147 | 126,725 |
Anti-Depressants | 400,718 | 839,005 | 210,177 | 125,134 |
Anti-Psychotics | 214,475 | 537,100 | 43,928 | 46,265 |
Hypnotics | 133,040 | 247,040 | 31,944 | 17,396 |
All CNS Drugs | 706,153 | 1,385,529 | 315,046 | 275,023 |
The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash assistance status. The disabled group includes individuals of any age who were determined to be eligible because of disability or blindness. The children's group includes foster care and adoptive service children. There were a small number of beneficiaries with unknown basis of eligibility that are not reported.
Many States had prepaid care plans covering at least some State beneficiaries, as of June, 1998. These plans may have provided limited or comprehensive coverage of prescription drugs. It is not possible to reliably identify number of prescriptions or prescription payments for drugs provided by prepaid plans, at this time. Therefore, the data reported here are for FFS prescriptions.
SOURCE: Centers for Medicare & Medicaid Services, Office of Research, Development, and Information: State Medicaid Research Files (Wolters Kluwer Health, 2003).
Analysis of utilization and spending for prescription drugs by therapeutic use for the dually eligible (persons eligible to receive both Medicaid and Medicare services) will be presented in later research. This is because the data for 1999, and later years contain more detailed information on dually eligible status. Future research will also examine utilization and spending for brand-name, off-patent brand-name and generic drugs.
Conclusion
In 1998, CNS drugs was the most expensive therapeutic category of drugs for the 29 State Medicaid Programs in our study. The greatest increases in Medicaid drug spending by therapeutic category between 1996 and 1998 were also observed for CNS drugs. Among eligibility groups, the disabled, in these States, accounted for the largest percentage of total Medicaid spending for CNS drugs at 71 percent in 1996, increasing to 73 percent in 1998. Spending for CNS drugs in 1998 was $1,102 for the disabled, compared to $291 for the aged, $66 for adults and $52 for children. Among the four CNS drug groups, high numbers of prescriptions per recipient, and high payment per prescription led to the highest payments per recipient for anti-psychotics, regardless of eligibility group. Among SMRF States and census regions, there were major variations in payments per recipient and prescriptions per recipient for CNS drugs.
Technical Notes
As of June 1998, many States had prepaid health care plans covering at least some State beneficiaries. These plans may have provided limited or comprehensive coverage of prescription drugs. Based on available data, it is not possible to develop accurate counts of drug recipients, number of prescriptions, and payments for drugs provided by prepaid plans. Therefore, the data presented here are for FFS prescriptions. Previous research showed that the percentage of beneficiaries who were enrolled in prepaid plans and received no FFS drugs was 33 percent in 1998 across all eligibility groups, but varied by State from below 2 percent (9 States) to 57 percent (New Mexico). The percentage was lower for aged and disabled beneficiaries (12 and 17 percent, respectively) than for children and adults (41 and 36 percent, respectively).
These Medicaid data can be used to examine patterns of payment, but not appropriateness of care. Differences in payment patterns, by health care professionals, should not be attributed to inappropriate recognition or management of complex conditions.
Acknowledgments
The authors wish to thank Harold Cooper and Celia Dahlman for their work in developing the software that was used to tabulate SMRF prescription drug claim records by therapeutic category and group.
Footnotes
The authors are with the Centers for Medicare & Medicaid Services (CMS). The statements expressed in this article are those of the authors and do not necessarily reflect the views or policies of the Centers of Medicare & Medicaid Services (CMS).
Reprint Requests: David Baugh, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, C3-20-17, Baltimore, MD 21244-1850. E-mail: dbaugh@cms.hhs.gov
References
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- Centers for Medicare & Medicaid Services. Internet address: http://cms.hhs.gov/researchers/max (Accessed December 2003)
- Wolters Kluwer Health. Internet address: http://www.Medi-Span.com/products/product_mddb.asp (Accessed May 2003)