The NYSPA Report: Medicaid’s Fragmented Formularies

To control the spiraling cost of medications to the NYS Medicaid program, the NYS budget adopted during 2011 radically altered the way the program purchased and paid for that formulary. The previously unified Medicaid formulary was fragmented such that each Medicaid HMO was required to define and manage its own formulary for its members. For those who were to remain in the Medicaid FFS system until they were moved into managed care, a more restrictive formulary was defined. Previously, given the state’s concern about the vulnerability of special populations, such as persons with serious and persistent mental illness, certain classes of medications, such as atypical antipsychotics, were not subject to restriction. This was no longer to be the case.

As a result, physicians and patients were faced with a virtual “Tower of Babel” of disparate formularies to negotiate and with new formulary programs fraught with barriers.

In the past obtaining approvals from the Medicaid formulary for non-preferred medications was a relatively straightforward process which could be concluded in a timely manner by dealing directly with the Medicaid formulary. After the implementation of the law, such was no longer the case. Furthermore, the long standing “prescriber prevails” clause of the law, which assured patient protection, was not included in the new law governing Medicaid managed pharmacy, thus vesting the ultimate decision about which medications, including psychotropics, to the managed care companies. To the surprise of many psychiatrists, because appeals for non-preferred medications were now within the province of the HMOs, the more complex and time consuming NYS laws and regulations applicable to managed care utilization review and external appeal now came in to force. These permit the process to be stretched into one which may take days or even weeks despite time being of the essence in these situations. While some companies tried to expedite medication related appeals, there was no requirement that they do so.

Psychiatrists found the new landscape frustrating and to have a negative impact on patient care. For example, many psychiatrists who had participated in the NYS OMH PSYCKES Quality project which encouraged clinicians to move patients from atypical antipsychotics adjudged to put them at increased risk for certain health issues to lower risk medications found that the preferred medications were often not on the HMO or state formulary. Another example was the failure to coordinate “plan” formularies with those of the hospitals. The consequence was a frequent need to change psychoactive medications at the time of discharge with the potential for destabilizing patients’ clinical conditions at the time that the state was emphasizing the importance of coordinated discharge planning. Administratively, psychiatrists encountered many barriers to gaining approval for a non-formulary medication from the patient’s HMO. Calls were required or forms faxed and layers of bureaucrats with varying knowledge or lack thereof had to be negotiated with, often without timely resolution of the matter. How user-friendly HMOs processes were was highly variable. There seemed to be no clear expectations of them in terms of their execution except that that they abide by above mentioned laws and regulations which did not easily lend themselves to the urgency of medication appeals. Time spent in making the initial request often took 15 minutes or more and the process often did not end there. Remember also that given the pressure in clinics for productivity, such an appeal could use up much of the limited time allotted for visits, diminishing the patients’ experience of their time with their doctor. Indeed, patients might often leave without the certainty that they would receive the preferred psychotropic medications on a timely basis.

Psychiatrists reported that appeals were consuming as much as 25 % of their time, resulting in their seeing fewer patients than in the past. A psychiatrist carrying a caseload of 200 patients working in a busy medical clinic specializing in the care of persons with HIV described what she has encountered. The process often requires that she make repeated phone calls, wasting time trying to figure out which number to call, spending long periods of time on “hold,” speaking to untrained representatives who act as intermediaries, and dealing with a vexing reliance on faxing. Then, given the shift in the balance of decisional authority and the infrequent ability to discuss the clinical situation with a knowledgeable clinician, not being certain that the patient will receive the most appropriate medication. This psychiatrist recalls trying to gain access to needed medications to avert an emergency department visit for a patient with mania who was experiencing a decompensation. She found herself making repeated calls to the Medicaid HMO late into the evening but only being able to speak with representatives lacking decisional authority as well as to a pharmacist who said 24 hours would be required for a decision. The new system failed the patient despite the psychiatrist’s best efforts. She observed, “that since the change in the law it has become much more laborious to keep patients stable on their medications – if a patient in tenuous condition cannot pick up their medication immediately, the odds on them going back to the pharmacy to pick it up later drop dramatically.” While what we mention are anecdotes, they are common stories shared among psychiatrists working to navigate the new system. As we can see, it all adds up.

NYSPA, aware of the too rapid rise in the costs of psychotropic medications to the NYS Medicaid Formulary, issued a “White Paper” in 2003. (See the NYSPA Report in the Summer, 2005 issue of Mental Health News.) Against the commonly held view of mental health advocates, it called for the inclusion of psychoactive medications in restricted formularies but balanced that recommendation by calling for a series of patient protections, including the preservation of the “doctor prevails” clause, to assure that their patients would receive the indicated medications and that their scarce time would not be devoured by cumbersome review processes. The scheme put into place in 2011 achieved neither those goals.

Psychiatrists voiced their concern about the impact of the newly implemented scheme on their most severely ill patients and advocated for redress. The legislature restored the “doctor prevails” requirement for the use of atypical antipsychotic medications beginning as of 1/1/13. Despite the fact that Medicaid HMOs will continue to be able to require psychiatrists to deal with the too often excessive hassles of their appeals processes, this change is viewed as an important first step towards restoring a balance in favor of quality patient care. Also, the NYS DOH, recognizing the extent of the problem, convened an ad hoc workforce force to review and modify the process. We are pleased to be participating in the work of that workgroup. That group is currently reviewing the present state of program and is expected to make recommendations and/or take steps to mitigate the worst aspects of the current approach. Psychiatrists and advocates for those with mental illness will need to monitor its work product closely. NYSPA plans to advocate for additional legislative remedies during the coming legislative session. It will seek to have all generic psychotropic medications included in the formularies of the Medicaid HMOs and for them to be available for physicians, including psychiatrists, to prescribe without prior approval or, at least, under the condition of “prescriber prevails.” Given the significant increase in the number of important psychotropics, including many of the atypical antipsychotics, which are now available as generics, as compared with what was available in 2003, adopting such a change now would greatly reduce the valuable psychiatric time expended in appeals and better serve patients and their psychiatrists and, perhaps, even the HMOs. Finally, we seek an appeals process which will be no more cumbersome than the one which was in place prior to the changes in the law.

Barry B. Perlman, MD, is Director of the Department of Psychiatry at Saint Joseph’s Medical Center in Yonkers, New York, and is Past President and Legislative Chair of the New York State Psychiatric Association. Jessica Daniels, MD, is Assistant Professor of Psychiatry at the New York Presbyterian Hospital – Weill Cornell Medical Center in New York City.

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