Medicaid: A Brief Overview and Case Studies on Access to Prescription Drugs

Miriam HarmatzFlorida Legal ServicesFebruary 25, 2009

Medicaid Eligibility

• Need categorical connection

- Aged or disabled

- Child or parent

• Low income

- Parent with child: income must be below

$682 and assets less than $2,000

- Aged, blind or disabled: income must be below $657

assets less than $2,000

Medicaid Structure

• Federal/State funding

• State flexibility but federal law controls

42 U.S.C. § 1396 et seq.

• Entitlement*

• Complicated

Prescription Drug Benefit

• $$$: huge budget item, with costs rising more quickly than other benefits

• Prior authorization: tool for controlling costs required for certain brand name drugs and drugs not on PDL

• Result: patients did not get their meds

Due Process for Prescription Denials

Hernandez et al. v. Medows, 209 F.R.D. 665 (S.D. Fla 2002.)

Medicaid statute 42 U.S.C. § 1396a(a)(3)

Goldberg v. Kelly

Medicaid regulations 42 C.F.R. § 431.200 et seq.

14th Amendment

Importance of data, experts and settlement

Discovery regarding drug denials

Relationship to class and permanent injunction

Complexity of benefit: settlement best outcome

What drugs can be prescribed?

On label

Off label

Medically accepted indication

42 U.S.C. § 1396r-8(k)(6)The term “medically accepted indication” means any use for a covered outpatient drug which is approved under the Federal Food, Drug, and Cosmetic Act [21 U.S.C.A. § 301 et. Seq.], or the use of which is supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(b)(i) of this section.

• Compendia• Applies to Medicaid & Medicare Part D

Edmonds et al. v. Levine

Off label marketing abuses

State response

Adverse impact on recipients

Structure of prescription benefit

Rebates

Very limited grounds for denial

Role of Compendia

Can PA

Medicaid Reform

Goal to block grant/privatize Defined benefit/predictable spending Plans determine amount, duration, and

scope PD limits on # Lack of data regarding denials

Medicare Part D

Privatized model

Limited government role

Lack of denial data or info on price negotiations

Lack of uniform PDL structure

“Medically Needy” hurt by Part D

Categorical connection: Aged or disabled– over income or over assets; share of cost (SOC) like

deductible Before Part D those with high drug costs met SOC

– Full Medicaid-including drug benefit/no co-payments– Full Medicare cost share benefit deductible, co-insurance,

co payments After Part D

– Lost Medicaid– Huge Part D co-payments– No Medicare cost sharing benefit

Medicare Part D “Victim”

RB needs transplant Income $1200/month, plus Medicare Medically needy share of cost (SOC) $ 900 Transplant drugs Part B: $ 700 All other drugs covered by Part D Cannot meet Share of cost; or afford cost of

Part B drugs Rejected for evaluation

Is health care right or responsibility?

If right- for everyone or just the “categorically connected” poor?

If right for everyone, cover every medically necessary service?

Government v. private sector?