evaluation of virginia’s preferred drug list policy and research division august 31,...

Evaluation of Virginia’s Preferred Drug List

Policy and Research Division

August 31, 2005Department of Medical Assistance Services

2

Presentation Outline

Components of Evaluation For This Report

PDL Process: Movement of Prescriptions

Preliminary Budget Savings

Study Design For Assessment Of Health Impact

PDL Health Impacts

Conclusions

3

PDL Study Requested By DMAS Director And The General Assembly

In 2004, the DMAS director requested a comprehensive evaluation of the agency’s newly administered PDL program.

Focus of the request:

– Program implementation -- movement of claims through the system and First Health’s management of the program and its Call Center

– Program savings in overall pharmacy program

– Health impacts of PDL

One year later the General Assembly placed language in the 2005 Appropriation Act formally directing the agency to conduct a study of the PDL

4

Three Important Research Questions Shape This Review

Within the context of this issue framework, the following specific research questions were addressed in the agency’s full review of the PDL:

• Has the PDL program been implemented in a way to ensure a high rate of compliance by physicians without adversely affecting patient access?

• Is there evidence that total spending in DMAS’ pharmacy program has been reduced since the PDL was established as the linchpin initiative in the agency’s pharmacy program?

• Is there evidence to suggest that the PDL program has adversely impacted patient health outcomes for those Medicaid recipients who are switched from non-preferred to preferred drugs?

5






PDL Health Impacts

Conclusions

6

Drug Claims For This Report Were Selected From Files Containing Over 26 Million Records And

Over 8.5 Million PDL-Eligible Claims

Claims Database (Oct 03 to July 05)

26,881,145

PDL Eligible Claims 8,524,437

Pre-PDL Claims 90 Days Prior to Hard Edit Date

(multiple claims per recipient and drug)829,875

Post-PDL Claims (Jan 04 to July 05)

(multiple claims per recipient and drug)6,179,588

Pre-PDL By PrescriptionSingle Claim Per Recipient Per Drug

420,151

Post-PDL By PrescriptionSingle Claim Per Recipient Per Drug

1,376,196

7

Claims Flow Analysis Had To Account For Changes Made To The 2004 PDL Hard Edit (Start) Date Or Preferred

Status For Certain NDC Codes (Drugs) In 2005

Hard Edit Date

107

437

42

Changed

Used 2004 Hard Edit Date (Verified by FH Staff)

Used 2004 Preferred Status and Considered

“Administratively Changed” in Flowchart

Preferred Status Analysis

Changed

Same

Same

Changed Changed Used 2004 Hard Edit Date and Preferred Status and Considered “Administratively

Changed” in FlowchartN=586

# of Affected National Drug Codes (NDC)

8

Nearly 7 of 10 Prescriptions That Were Written For Non-Preferred Drugs Prior To The Official Start of PDL Were Switched To Preferred Drugs Once The Program Was

Implemented

Total Rx420,151

Non-Preferred Rx124,088

Preferred Rx296,063

Change to Preferred Rx

86,143

Approved as Non-Preferred

11,682

Admin Change1,142

Remained on Preferred Rx

179,600

No New Claim109,467

Recent Pre-PDL Rx

No Claim Found109,467

Recent Pre-PDL Rx

No Claim Found25,121

Later Refill

No Refill

Pre-PDLPost-PDL

Walk away

Claim Not Yet Submitted

No New Claim25,121

Admin Change6,996

9

19 Months Into The Program There Are Substantially More Recipients Receiving Drugs In The Post-PDL Period Who Did

Not Have Paid RX Claims In The Pre-PDL Period

Claims Database (Oct 03 to July 05)

26,881,145

PDL Eligible Claims 8,524,437

Pre-PDL Claims 90 Days Prior to Hard Edit Date

(multiple claims per recipient and drug)829,875

Post-PDL Claims 1 to 6 Weeks After Hard Edit Date

(multiple claims per recipient and drug)6,179,588

Pre-PDL By PrescriptionSingle Claim Per Recipient Per Drug

420,151

Post-PDL By PrescriptionSingle Claim Per Recipient Per Drug

1,376,196

10

Thus All PDL Compliance Rates In This Study Are Calculated Without Respect To The Pre-PDL Status Of Any RX Claims….

The Compliance Rate Remains High

93%

*1,063,636* Includes only paid claims. .

Not on PDL

PDL Drug(Compliance)

Total Claims

7%

85% Compliance

Rate Needed to Achieve Budget

Savings

PDL Compliance Rate (January 2004 – July 2005)

Status of All Claims Paid After PDL Hard Edits

11

Using This Method Only Minimal Variation In Compliance Rates Across Select Therapeutic

Classes Is Observed

96% 94%91%93%

89%

94%

Cardiac Medications Gastro

Asthma/ Allergy

Central NervousSystem

Anti-Biotics

Analgesics

Total Claims 287,149 77,981 285,404 135,872 112,854 55,723

98%

64,049

Diabetes

Compliance Rate Needed to Achieve Budget Savings

85%

12

Four Out Of Five Requests For Non-Preferred Drugs Continue To Be Approved by the FH Call Center

January 2004to September 2004

80%

17%

3%

October 2004 to June 2005*

34,606 26,887

82%

14%

4%

Prior AuthorizationApproved

Physician AgreedTo Change to a Preferred Drug

Denied

(Technical Denials)

Total Calls

Notes: *There were also 5 reconsiderations (< 1 percent) in the October 2004 to June 2005 time period. Call data indicates that FH staff are answering phone calls within 28 seconds on average and the call lengths average two minutes and 27 seconds.

Total(January 2004 to

June 2005)

3%

81%

16%

61,493

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PDL Health Impacts

Conclusions

14

The Shift In Market Share Created By The PDL Continues

Preferred Drugs

Non-Preferred Drugs

PDL Status of RX Claim

57% 57% 57% 57% 59%58%

43% 43%43% 43% 42% 41%

July Aug Sept Oct Nov Dec

2003

Pre-PDL Period

84%88%89%89%83%

17% 11% 11% 12% 16%

Jan -Aug Sept Oct Nov Dec

91%88%90%90%90%

10% 10% 10% 10%

9%

Jan

90%

10%

Feb Mar Apr May Jun

Post-PDL Period

2004 2005

15

The Cost Per Script Continues To Be Below The Projected Amount Since PDL

Implementation

$50

$52

$54

$56

$58

$60

$62

$64Pre-PDL Period Post-PDL Period

2003

July Dec June Dec

2004 2005

JuneMarch MarchSeptSept

Forecasted Cost Per Script

Actual Cost Per Script

16

Estimated Savings in The Pharmacy Program Since The Implementation of The PDL (And More

Recently The MAC) Exceed $35 Million

$300

$350

$400

$450

$500

$550

Mil

lion

s

FY 2001 FY 2002 FY 2003 FY 2004 FY 2005

Official Medicaid Forecast for Pharmacy Expenditures

Actual Medicaid Expenditures

$35.2 million

17





Study Design For Assessment Of Health Impact PDL Health Impacts

Conclusions

18

Questions Persist Concerning The Impact Of PDLs On Recipient Health Outcomes

The principle criticism leveled at PDL programs is that the change in drugs destabilizes patients causing a number of adverse reactions

Critics of the program believe that over time, effects of the predicted destabilization in the Medicaid program for persons on PDLs will be seen in:

– Greater medical costs

– More frequent use of emergency departments

– Higher rates of hospitalization

– Longer hospital stays

19

Research Questions For This Analysis

Net of the influence of other factors, are there meaningful differences in the total amount of Medicaid spending observed for the PDL and non-PDL groups during the follow-up period?

Are Medicaid spending levels for hospital care higher for persons on the PDL after accounting for the impact of other factors?

What, if any, differences are observed in the utilization of inpatient hospital care?

Do PDL recipients utilize emergency departments for care at a higher rate than their counterparts, after controlling for other factors?

20

Quasi-Experimental Design Used To Address The Question Of PDL Health

Impacts

Design Type How It Works Advantages Disadvantages

Non-experimental

PDL patients’ health status/expenditures are compared from the periods before and after the PDL was implemented

Easy to implement and understand

Design does not address what would have occurred in the absence of the program – results unreliable

Experimental Patients are randomly chosen to participate in the PDL and outcomes are compared to those who were randomly screened off of the program

Cadillac of research designs in terms of producing reliable, unbiased measures of program impact

Not feasible

Quasi-Experimental

Develop a non-randomly assigned group of PDL participants who were switched to preferred drugs and compare to a non-randomly assigned group of non-participants who remained on non-preferred drugs

Produces measure of program impact without the burden of random assignment

Subject to selection bias which produces non-equivalency among study groups

21

First Step In Selection Of Study Groups Was To Identify Claims

That Define Each Group

Total Claims

Non-Preferred Rx102,472

Preferred Rx

Change to Preferred Rx

83,197

Approved as Non-Preferred

19,275

No New Claim

Remained on Preferred Rx

Recent Pre-PDL Rx

No New Claim

Claims Used To ID PDL Program Group

Claims Used To ID Recipient Comparison Group

Based On PDL Hard Edit (Start) Dates Established From 1-04 through 5-04

22

ExcludedControl Group

All Drugs Non-Preferred in Post-PDL Period

491

PDL Group

All Drugs Preferred

in Post-PDL Period

6,617

The Second Step Was To Identify Unique Recipients, Determine Whether They Were In The PDL Or Comparison

Group, And Examine Their Characteristics

Switched to Preferred Drugs

83,197

Did Not Switch19,275

Total Claims102,472

59,802

Some Drugs Preferred, Some Non-Preferred in

Post-PDL Period

52,694

Multiple Claims (Prescriptions)

Per Drug Per Recipient

Single Claim Per Recipient

23

There Are Key Differences In The Ages, Race, And Geographic Location Between The PDL And

Comparison Group

93%

7%

Female

Male

Female

Male

62%

38%

55%

45%

74%

26%

70%

30%

All Other

Black

36% Urban

Suburban38%

43%

24%

33%

Rural

Urban

Suburban

Rural

Note: *Chi-square values are statistically significant at < .05.

N=7,10826%

49%

51%

Over 65

Under 65

All Other

Black Over 65

Under 65

GENDER *RACE *AGE *RESIDENCE

PD

L

Co

mp

aris

on

63%

37%

63%

37%

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Key Differences Also Exist In The Medications Used By Recipients In The

PDL Study And Comparison Group

Cardiac Gastro-Intestinal

Central Nervous System

Asthma/Allergy

***CDPS(Case mix Score)

PDL Group

Comparison Group

KEY

*Rate of Use for Certain Medications **Risk Measure

43%

26% 29%

52%

19%

9%

3%7%

1.54 1.38

•Chi-square values are statistically significant at .0001. ** Difference is statistically significant < .05.•***The value of the CDPS in this study is understated for persons who have Medicare coverage

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The Third Step Was To Establish The Pre- And Post-Program Periods Based On Each

Recipients’ 1st Service Date Under PDL

5-30-05

2nd Hard Edits 2-04Date of

1st RX Service After 2-04

Post Program Period Initiated By Date of 1st RX Service After Hard Edit (Start) Date With Maximum

Possible Claims Run Out to 5-31-05

3rd Hard Edits 5-04Date of


1st Hard Edits 1-04Date of


5-30-05

5-30-05

Pre Program Period Extends Back 12

Months From The First RX Service Date

1-31-03

2-28-03

5-28-03

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Extending The Follow-up Period Increased Attrition In Both The PDL And

Comparison Group

PDL Group

Comparison Group

1st PDL RX Service

Date

ThreeMonths

Six Months

Nine Months

Twelve Months

491 485 485274

187

6,6176,160 6,160

1,194739

Period of Follow-up After 1 st

RX Service Date

Recipient Level

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PDL Health Impacts

Conclusions

28

Several Measures Used To Evaluate The Health Effects Of Virginia’s PDL

The following outcome measures were tracked for persons in the PDL program:

– Total Medicaid spending (excluding waiver and long-term care maintenance costs)

– Total Medicaid hospital spending

– Recipient hospitalizations

– Emergency room utilization rates

29

Total Medicaid Spending For The Typical Person On Preferred Drugs Is Actually Less Than The Amount

Observed For Persons On Non-Preferred Drugs

Annualized Medicaid Spending Levels Per Recipient

$6,775

$2,570

Notes: Medicaid expenditures are annualized based on 9 months of data in the post-PDL period and are adjusted by the number of days each recipient was eligible during the period. The post-PDL period is initiated with the submission of the 1 st prescription after the program’s hard edit date for the relevant drug. Persons with Medicare coverage were excluded from this analysis

PDL Group

Comparison Group

$1,765

$6060

Average Spending

N= 436 126 N= 436 126

Median Spending Level

Skewness Levels

PDL Group = 10.19Comparison Group = 5.32

30

The Typical Person On Preferred And Non-Preferred Drugs Did Not Have Any Hospital Expenditures During The First

Nine Months After Submission Of A PDL-Eligible Drug Claim

Annualized Hospital Spending Levels Per Recipient

$1,699

$0

Notes: Hospital expenditures are annualized based on 9 months of data in the post-PDL period and are adjusted by the number of days each recipient was eligible during the period. The post-PDL period is initiated with the submission of the 1 st prescription after the program’s hard edit date for the relevant drug. Persons with Medicare coverage were excluded from this analysis

PDL Group

Comparison Group

$0

$67.52

Average Hospital Spending

N= 436 126 N= 436 126

Median Spending Level

Skewness Levels


31

A Higher Proportion of PDL Recipients Visited The Emergency Room In The

Nine Month Follow-up Period

3% 3%

26%

18%

.04%3%

.02% 3%

In-Patient Hospital

Stays

PDL (Study) Group (N =434)

Comparison Group(N=116)

Recipients With …..........In The Post-PDL Period

Notes: Follow-up period is nine months from the date 1st prescription was written after hard edits were put in place. Persons who were eligible in the Pre-PDL period but not in the post period were excluded. Persons with Medicare coverage were also excluded.

*Emergency Room Visits

Mental Health Hospital Visits

Mental Health

Hospital Days

32

However, There Was No Difference In The Number Of Visits Made To The Emergency Room. The Typical Recipient In

The PDL And Comparison Group Had None

Annualized Number Of Emergency Room Visits Per Recipient

5.2

0

Notes: Number of visits are annualized based on 9 months of data in the post-PDL period and are adjusted by the number of days each recipient was eligible during the period. The post-PDL period is initiated with the submission of the 1 st prescription after the program’s hard edit date for the relevant drug. Persons with Medicare coverage were excluded from this analysis

PDL Group

Comparison Group

01.2

Average Number of ER Visits

N= 433 126 N= 433 126

Median ER Visits

Skewness Levels


33

A Similar Finding Is Observed With Respect To Days Spent In The Hospital

Annualized Number Of Days Spent In The Hospital Per Recipient

2.4

0

Notes: Number of days are annualized based on 9 months of data in the post-PDL period and are adjusted by the number of days each recipient was eligible during the period. The post-PDL period is initiated with the submission of the 1 st prescription after the program’s hard edit date for the relevant drug. Persons with Medicare coverage were excluded from this analysis

PDL Group

Comparison Group

0.42

Average Number of Days in Hospital

N= 436 126 N= 436 126

Median Days in Hospital

Skewness Levels


34

Attempts To Assess Effects Of PDL On Certain Outcomes Must Also Recognize

The Impact Of Other External Factors

Other Variables Significantly Related To Study Outcomes (Based on Pearson’s Correlation)

Variables

Post-PDL

Medicaid $

Post-PDL Hospital $

Post-PDL Emergency Room Visits

Post-PDL Days In Hospital

Pre-PDL Spending or Utilization

Case_mix

Age

Black Recipients

Geographic Location

35

When These Factors Are Accounted For The Total Amount of Medicaid Spending On Persons Switched To Preferred

Drugs Is Actually Less When Compared To Those On Non-Preferred Drugs

Notes: Estimates produced using OLS regression model. Dependent variable is total Medicaid spending per days of eligibility over

a nine month post-PDL period. R2 for model with outliers is.15. For model without outliers the R2 is .12.

Factors Consideredin Payment Model

*Pre-PDL Medicaid Spending

*Recipients’ Case Mix Scores

Age of Recipients

Race of Recipients

Type of Residence

*Statistically significant effects

Predicted Payment Level for Persons On Non-Preferred Drugs

$

Relative Difference

For Persons On

Preferred Drugs

**-$1742

Outliers In Outliers Out

**-$1098

**Differences not statistically significant

The Net Impact Of The PDL On Total Medicaid Spending

36

The Difference In Medicaid Spending On Hospital Care For Persons On Preferred Drugs Is Small And Statistically

Insignificant

Notes: Estimates produced using OLS regression model. Dependent variable is total hospital spending per days of eligibility over

a nine month post-PDL period. R2 for model with outliers is .25 No statistically significant effects in model without outliers.


Predicted Payment Level for Persons On Non-Preferred Drugs

$

Relative Difference

For Persons On

Preferred Drugs

** 277



** 28

The Net Impact Of The PDL On Total Hospital Spending

Pre-PDL Medicaid Spending

Recipients’ Case Mix Scores

Age of Recipients

Race of Recipients

Type of Residence


37

The Impact For Days Spent In Hospital is Small And Actually Negative


#

Relative Difference

For Persons On

Preferred Drugs

**-.10



The Net Impact Of The PDL On Total Days In Hospital

Predicted Number of Days In Hospital For Persons On Non-Preferred Drugs

Notes: Estimates produced using OLS regression model. Dependent variable is total days in hospital per days of eligibility over

a nine month post-PDL period. R2 for model with outliers is .10 and .06 for model without outliers.

**-.17

Pre-PDL Hospital Days


Age of Recipients

Race of Recipients

Type of Residence


38

Finally, No Discernable Impact Could Be Found On Emergency Room Use By Recipients Switched To

Preferred Drugs Relative To Their Counterparts On Non-Preferred Drugs


#

Relative Difference For

Persons On Preferred

Drugs

** 1.75



The Net Impact Of The PDL On Emergency Room Use

Predicted Days Of Emergency Room Use For Persons On Non-Preferred Drugs

Notes: Estimates produced using OLS regression model. Dependent variable is total emergency room visits per days of eligibility

over a nine month post-PDL period. R2 for model with outliers is .03. For model without outliers the R2 is .03

** .81


*Age of Recipients

Race of Recipients

Type of Residence


39

Conclusions

After nearly 19 months of program implementation, Virginia’s PDL program continues to gets high marks:

– PDL compliance rate is high and most changes are being made voluntarily

– Patients are not being denied drugs– The program is saving money for the Commonwealth – Though more research is needed, the program does not

appear to be adversely impacting the health status of persons switched to preferred drugs

evaluation of virginia’s preferred drug list policy and research division august 31,...

Documents

prepdl claims

pdl hard edit

postpdl claims

pdl eligible claims

administered pdl program

report pdl process

nonpreferred drugs

preferred rx296