Medicaid Drug Red Tape Delays Patients’ Medicines

Problems Could Add to Physician Medicaid Exodus

July 23, 2016

Red tape in the Medicaid prescription drug program hinders some low-income children and adult patients across Texas from timely getting necessary medications prescribed by their physicians, according to the Texas Medical Association’s (TMA’s) Texas Medicine magazine. The problem occurs when physicians prescribe some “preferred” medications listed under the Medicaid Preferred Drug List (PDL) but the drug is subject to additional review, unbeknownst to the physician. When the patient tries to fill the prescription at the pharmacy, it is denied, and the patient has to return to the physician for help. At a time when the program is under legislative review, TMA is recommending improvements.

Preferred or Not?

Texas Medicaid operates a PDL where most prescription drugs are classified as preferred or nonpreferred. Drugs in the preferred category do not require preauthorization — physicians getting approval before prescribing them — when prescribed under Medicaid. However, despite the Medicaid preapproval, patients and their physicians discover some prescriptions on the PDL require additional, unexpected approval before patients can get their drugs. These additional requirements are not well publicized. “I have no way of knowing these things ahead of time until those prescriptions get kicked back to me,” said Ryan Van Ramshorst, MD, a San Antonio pediatrician. “It makes it very challenging as a provider to get medications to kids who need them. And my office is not set up to do prior authorizations so I do them myself, and it takes a lot of my time,” said Dr. Van Ramshorst, a member of TMA’s Select Committee on Medicaid, CHIP, and the Uninsured. He cites one child who nearly had to be hospitalized as a result of this drug delay and others whose successful, common asthma-control medication was suddenly denied.

The PDL perplexes doctors partly because the state of Texas and roughly 20 contracted Medicaid HMOs comanage it. When the legislature established this arrangement, the intent was to ensure a single, statewide PDL with which all Medicaid HMOs must comply. But the HMOs are not required to follow all so-called “clinical edits” that subject some drugs to additional review, creating confusion. (Clinical edits are additional quality and safety checks by the state.) Some of these reviews accomplish things such as preventing harmful drug interactions. Yet when physicians check the PDL, there is no mention that some drugs may be subjected to this extra step. Plans also can simplify the clinical edits — a good thing — but the variability across plans sows confusion. And if the plans do not have to comply with all the edits, some physicians wonder whether they are needed at all.

Saving Money?

Another element of the program raising eyebrows involves rebates. The program has a rebate component to save the state money, but physicians wonder if it’s effective, and whether patient care might be at risk. Federal rule requires pharmaceutical companies who want their drugs to be covered by Medicaid to pay rebates to the state. Additionally, Texas and a handful of other states require companies to pay a supplemental rebate for their medicine to be considered a preferred drug, eligible for the PDL. This often results in brand name drugs being preferred. Some doctors who prescribe less expensive generic drugs whenever possible question a program whose rebate plan tends to favor more expensive brand-name drugs instead of cheaper generics. And delay can occur if the doctor prescribes the generic, but the name brand is in the PDL.

“That’s just nuts. It’s amazing to me the vendor drug program [VDP] evolved itself into this mess where a doctor and a patient are penalized for prescribing the generic rather than the brand name,” said TMA Physicians Medicaid Congress Chair John R. Holcomb, MD, a San Antonio pulmonologist. “It’s foreign to our training to write a generic prescription and have it rejected.” And one physician said sometimes the name-brand drug is five times more expensive than its generic counterpart.

Doctors Offer Solutions

Because of these issues, the TMA Physicians Medicaid Congress is pushing for Medicaid reforms and calling for an administrative overhaul of the drug benefit program to simplify and streamline requirements. The VDP’s state/HMO comanagement arrangement expires in August 2017, so the legislature must decide whether to keep the current structure or let the HMOs solely manage the benefit. As it is, Medicaid HMOs are responsible for 87 percent of all Medicaid patients in Texas, so some believe they should manage the drug benefit program too. And with fewer than 37 percent of Texas physicians accept all new Medicaid HMO patients, according to TMA Physician Survey data, some argue fixing this prescription drug problem might keep that participation number — which is near “crisis level,” according to House Public Health Committee Chair Rep. John Zerwas, MD (R-Richmond) — from shrinking further. One doctor said he has to ask for 10 times more Medicaid prior authorizations than he does under commercial insurance; reducing the program’s bureaucratic hassle might encourage doctors to stay.

TMA recommendations for streamlining the VDP:

·         Within each drug class on the preferred drug list, include a reference so physicians can immediately determine if there are any additional associated prior authorization criteria (clinical edits) that the state sets and which HMOs implement them or a less stringent version of them.

·         When the state Drug Utilization Review Board considers a clinical edit, publicize the justification for the proposal and the entity that recommended it. 

·         Evaluate the validity of all current clinical edits, then establish a schedule to periodically review clinical edits.

·         For physicians using Epocrates, a mobile health software app, establish an electronic mechanism so physicians can quickly and easily access information on clinical edits and which HMOs use them.

·         Limit changing drugs from PDL or preferred to nonpreferred status to annual changes.

·         When a drug’s preferred status changes, provide the rationale.

·         If there is a drug shortage, adopt an expedited communication plan so the Texas Health and Human Services Commission and HMOs can quickly share information with network physicians on medication alternatives. 

·         Allow physicians to prescribe drugs for nonlabeled uses in certain patient populations when there is clinical evidence supporting such usage. 

·         If the HMOs are given authority to completely manage the benefit, establish strong statutory consumer and provider protections, including continuity of care provisions and limits on controversial utilization management efforts, such as step therapy.

The health plans say they, too, are limited, by the state.

As for updating physicians about drug changes, state Medicaid officials are working on a revised VDP website that would make it easier for doctors to determine which restrictions apply to a drug, such as whether it is preferred or nonpreferred. But the changes are not expected to be ready until early 2017.

“The vendor drug program is still a huge issue and has been for many years. It’s very frustrating, and this needs to be addressed in the [2017] legislative session," Dr. Van Ramshorst said.

TMA is the largest state medical society in the nation, representing more than 49,000 physician and medical student members. It is located in Austin and has 110 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans.


Contact: Brent Annear (512) 370-1381; cell: (512) 656-7320; email: brent.annear[at]texmed[dot]org

Marcus Cooper (512) 370-1382; cell: (512) 650-5336; email: marcus.cooper[at]texmed[dot]org

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Last Updated On

July 22, 2016

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