Trends in Medicaid fee-for-service outpatient drug utilization, expenditures, and pharmacy reimbursement rates (2010–2012)

Bander Balkhi,Abdulrahman Alshehri

doi:10.4314/tjpr.v17i2.18

Abstract

Purpose: To assess drug utilization and expenditure trends in Medicaid fee-for-service program during the period 2010 – 2012 in the United States of America. Methods: A retrospective, descriptive analysis of the trend in drug utilization and expenditures in the Medicaid fee-for-service (FFS) program was performed using Medicaid state drug utilization data provided by Centers for Medicare and Medicaid Services (CMS) in the United States. Descriptive analyses were performed for all variables in the study. Association between prescription-drug utilization and reimbursement rate was examined using a linear regression model. Results: The results indicate that prescription-drug utilization of Medicaid FFS program decreased by 20 % during the period (2010 – 2012) as also drug expenditure during the same period. Although constituting nearly 70 % and about 75 % of the total drug utilization in 2010 and 2012, respectively, generics represent only around 18 % of the total drug expenditures. No statistically significant association was found between total expenditures and the reimbursement rate. Conclusion: FFS Medicaid drug expenditures decreased from 2010 to 2012 mainly due to a reduction in the total number of prescriptions as also the prices of generic drugs. Thus, higher utilization of generic drugs may offer substantial savings to Medicaid programs at the state level. Keywords: Fee-for-service programs, Medicaid program, Generic drug utilization; Branded drugs, Patient Protection and Affordable Care Act

Highlights

Medicaid is the largest healthcare insurance in the nation, and it is the key source of prescription medications for low-income Americans
Our analysis demonstrated that the total prescription-drug utilization in Medicaid program decreased by nearly 20 % from 351.2 million in 2010 to 281.4 million claims in 2012
From 2010 to 2012, generic utilization reached 75 % of all prescriptions paid by Medicaid

Summary

Introduction

Medicaid is the largest healthcare insurance in the nation, and it is the key source of prescription medications for low-income Americans. Under the new healthcare reform, the prescription drugs paid by Medicaid will be significantly increase. Rising prescriptions drug costs are a challenge for Medicaid programs, and cost-containment strategies are needed [4]. Medicaid programs have implemented a variety of policies aiming to control drug costs [5]. State Medicaid programs use different criteria to set the reimbursement for branded and generic drugs to control their spending on prescription medication [5,6]. Using a low-cost, generic alternative of a branded drug when available provides substantial savings on medication expenditure in state Medicaid program [9,10]

Methods

Results

Discussion

Conclusion