✯
✯
2003 National Health Policy ✯Conference
January 22-23, 2003
J.W. Marriott
Washington, D.C.
2003 National Health Policy Conference
Wisconsin Medicaid: Controlling Pharmacy
Costs While Expanding Access and Enhancing
Quality
Peggy B. Handrich, Administrator
Division of Health Care Financing
Wisconsin Department of Health and Family Services
January 23, 2003
Overview of the Presentation
‹
Medicaid - Program Scope and Budget Issues
‹
Medicaid - Pharmacy Programs
‹
Wisconsin SeniorCare
‹
Prudent Pharmacy Purchasing and Quality
Enhancement - Goals and Strategies
‹
Future Pharmacy Management Strategies
WISCONSIN
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The Wisconsin Medicaid Program
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Wisconsin Medicaid is three major programs, Medicaid
BadgerCare and SeniorCare
In FY 2003, projected expenditures total $4 billion, total
enrollment at Oct 2002 was over 665,000
Medicaid is the largest health care program in the nation and
in Wisconsin (11% of state budget)
Total state funds shortfall / cost-to-continue estimated to be
$733 million for SFY 03 through 05
Key factors increasing Wisconsin Medicaid costs
Increasing caseload, especially for low-income families, due to
recession
Rising costs of health care, especially prescription drugs
Funding to fully support annualized costs of SeniorCare
WISCONSIN
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Medicaid & BadgerCare Recipients and
Expenditures by Enrollment Group - FY 2002
Recipients
Expenditures
13.4%
60.5%
Children
and
Families
35.8%
Elderly
11.9%
27.5%
Blind
and
Disabled
50.7%
Source: Wisconsin Medicaid Enrollment and Expenditure Reports
Note:
Calculations used unduplicated counts of eligibles by category, including BadgerCare,
and Expenditures were for services only, excluding special financing payments or administrative costs.
WISCONSIN
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Medicaid Expenditures as Share of Total State
Budget Less Than National Average Last 10 Years
Medicaid as a Percent of Total State Expenditures
All States and Wisconsin, FY 1986 - FY 2002
25.0%
All States
Wisconsin
20.0%
15.0%
10.0%
5.0%
0.0%
1986
1988
1990
1992
1994
1996
Source: National Association of State Budget Officers, State Expenditure Reports
Note:
Average all states data excludes the District of Columbia
1998
2000
2002
WISCONSIN
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Caseload Increased with Recession and New Programs
• Enrollment growth outpaced national average between 1998 and 2002
• Increased by 48% from June 1999 to June 2002 (Avg annual rate of 14%)
• Projected to increase by 30% by June 03 due to the addition of SeniorCare
Family Medicaid
SeniorCare
BadgerCare
Other
Elderly/Disabled
800,000
600,000
400,000
200,000
0
Jun-98
Source:
Jun-99
Wisconsin Medicaid Enrollment Reports
Jun-00
Jun-01
Jun-02
Jun-03
WISCONSIN
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Average Annual Medicaid/BadgerCare
Expenditure Growth SFY 1998-2002
Pharmacy growth far exceeded other categories of cost growth.
Nursing Facilities
3.30%
Physician/Clinic
Inpatient Hospital
4.50%
4.80%
Managed Care
10.80%
16.70%
Prescription Drugs
All Medicaid
Source: Wisconsin Medicaid Expenditure Reports
7.40%
WISCONSIN
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‹
Overview of Medicaid Pharmacy Programs
In FY 2003, FFS expenditures for prescription drugs
projected to total $560 million
‹
Elderly population with Medicaid drug coverage
potentially triples with the implementation of
SeniorCare
‹
Medicaid and BadgerCare - $500 million ($199 million state
funds)
SeniorCare - $60 million ($30 million state funds)
Managed care drug costs included in the comprehensive, riskbased rate
Currently providing Rx insurance to over 67,000 seniors who
previously had no Rx insurance
Top 15 therapeutic classes account for about 67%
of total drug costs. Following chart reflects the
unique nature / needs of the population served WISCONSIN
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Top 15 Rx by Expenditure and Volume - SFY 02
Antipsychotics
Antidepressants
Anticonvulsants
Proton Pump Inhibitors
Analgesics
Antihyperlipidemics
Antibiotics
NSAIDs
Antidiabetics
Antiviral
Asthma
Calcium Channel Blockers
Anticoagulents
Antihistamines
ACE Inhibitors
514,412
$66,583,321
641,199
$37,247,423
462,940
$33,615,846
176,853
$22,165,824
470,170
$20,025,202
203,483
$14,902,173
319,358
$14,340,666
278,062
$11,651,040
234,572
$11,426,522
319,358
$9,024,225
229,500
$8,530,970
# Prescriptions
Expenditures
197,273
$8,390,130
191,849
$7,808,438
146,306
$7,317,564
256,651
$7,008,740
Source: Wisconsin Medicaid Expenditure Reports
WISCONSIN
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SeniorCare Overview
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Prescription drug assistance program for
Wisconsin residents 65 years of age or older
‹
Assist seniors with low incomes or high drug costs
Funded with state funds, participant cost sharing,
price discounting, manufacturer rebates, and federal
funding through Medicaid waiver
Program authorized on September 1, 2001
Enrollment began July 1, 2002, benefit coverage
began September 1, 2002
Eligibility Requirements
Wisconsin resident 65 years of age or older not
enrolled in Medicaid
Enrollment fee of $20, no asset test, income only
Differential cost-sharing depending upon income level
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SeniorCare Income Eligibility Thresholds and
Cost-Sharing Requirements
‹
Level 1 - Up to 160% FPL
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Level 2 - Above 160% FPL up to 240% FPL
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Up to $14,176 individual, $19,104 couple, $15 co-pay
brand name drug, $5 co-pay generic drug
Above Level 1 thresholds up to $21,264 individual,
$28,656 couple, $500 deductible then $15 co-pay brand
name drug, $5 co-pay generic drug
Level 3 - Above 240% FPL
Above Level 2 thresholds, no upper income limit,
spenddown equal to amount that income exceeds 240%
FPL, then $500 deductible, then $15 co-pay brand
name drug, $5 co-pay generic drug
WISCONSIN
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SeniorCare Benefits
‹
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Medically necessary prescription drugs and insulin,
other over-the-counter medications not covered
Only covers drugs produced by manufacturers with
a rebate agreement
Medicaid pharmacy benefits management processes
will apply:
‹
Prior Authorization, Drug Utilization Review, Day Supply
Limitations, Generic Substitution, Lock-in
Medicaid-certified providers must accept SeniorCare
Over 1,100 pharmacies in Wisconsin, 120 border pharmacies
105% of the amount allowed by Medicaid program, plus the
Medicaid dispensing fee
AWP minus 11.25% for sole source drugs and maintains an
extensive MAC pricing list for multi-source drugs
WISCONSIN
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Federal Funding Approved for Waiver
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Legislation in September 2001 required department to
seek a federal waiver to augment state funds
Waiver approval received on July 1, 2002, the same
day that the enrollment began
Key waiver terms and conditions
Five year demonstration - budget cap on Medicaid
expenditures for aged population
Federal funds only on behalf of people with incomes at or
below 200% FPL
No federal match on enrollment fees
Federal rebate agreements do not apply to purchases for
people above 200% FPL - need separate agreements
with manufacturers
WISCONSIN
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Waiver - Key Budget Neutrality Concepts
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Medicaid Diversion
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Overall Spending Cap
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Program achieves savings in Medicaid (and Medicare) by
keeping seniors healthier longer, reducing spenddown
enrollment into Medicaid and diverting / delaying their need
for expensive (institutional) services
Medicaid costs for elderly plus SeniorCare will be no more
than what Medicaid costs for elderly would be in the absence
of the waiver over the five year demonstration period
Annual cost / eligible growth limited to 6.3%, annual
caseload growth limited to 2%
Program Evaluation
A third-party professional evaluation to be conducted by
Brandeis University including cost and utilization analysis,
benefits analysis and participant survey
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SeniorCare - Adopting MA Policies
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SeniorCare was implemented through the same
systems as the Medicaid FFS program
Incorporated all Medicaid prudent purchasing /
quality assurance tools (described in the next
section)
Seniors and advocacy groups uniformly supportive
of these measures
Also supportive of cost-sharing features of program
Allowed application of mature, well developed
management tools to new program
Ensures value for money, some measure of
equity with the other program participants
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Medicaid Pharmacy Prudent Purchasing and
Quality Enhancement Goals
‹ Value-based purchasing
‹
Priority for low-income consumers
‹
provide adequate access to pharmacy services
z ensure comprehensive statewide access and remove
barriers when they are found
differential cost sharing based on income
Quality assurance
‹
best possible quality for the best possible price
emphasis on appropriate clinical decision making
prospective DUR through point of sale system, targeted
intervention, careful use of PA
Inclusive policy input
advisory committees, partnering with community
service and advocacy agencies, provider organizations
WISCONSIN
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Medicaid Pharmacy Prudent Purchasing and
Quality Enhancement Strategies
Aggressive Maximum Allowed Cost (MAC) List
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Wisconsin sets much lower rate for multi-source generic
drugs than most states or federal government
Contract with professional academic-based pharmacists to
continuously review generic pricing
Over 1,000 targeted generics are on the MAC list
Targeted Prior Authorization
WI has Pharmacy and Therapeutics Committee and
technical system in place for PA
Currently includes NSAIDS, ACE Inhibitors, anti-obesity
drugs, certain stimulants, and Alpha 1 Proteinase Inhibitor
(Prolastin). H2-Antagonists were removed as generic
alternatives became available
Committee has approved PPIs and cholesterol lowering
drugs
WISCONSIN
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Medicaid Pharmacy Prudent Purchasing and
Quality Enhancement Strategies
Encourage use of generics
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Aggressively pursue manufacturer rebates
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Wisconsin Medicaid recovers 21% of drug expenditures
Separate agreements for SeniorCare above 200% FPL
Assure appropriate utilization
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Generics comprise 50% of FFS prescriptions, but only
17% of costs
Good value for money where therapeutically equivalent
On-line, real time system to control and monitor drug use
through drug utilization review and prior authorization
Lock-in program to prevent / eliminate potential abuse
Brand Medically Necessary
If MAC generic drug available, prescriber must indicate
the brand is necessary in writing
Less than 1% of Rx result in written over-ride
WISCONSIN
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Medicaid Pharmacy Prudent Purchasing and
Quality Enhancement Strategies
‹ Diagnosis Restrictions
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Prospective Drug Utilization Review
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Requires pharmacy to submit diagnosis with claim
Claim is denied if diagnosis not on allowed list
Applies to about 1% of total prescriptions
Assists pharmacists screen out dangerous or
fraudulent prescriptions
Claims denied if indications of drug-drug interaction,
drug-age or drug-gender mismatch, or if participant is
trying to obtain multiple prescriptions
Retrospective Drug Utilization Review
Monthly review of all paid drug claims to identify
patterns of sub-optimal prescribing, consumption or
inappropriate behavior on the part of pharmacies,
prescribers or participants
WISCONSIN
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Medicaid Pharmacy Prudent Purchasing and
Quality Enhancement Strategies
Maximum Days Supply
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Targeted Disease Management
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Limits reimbursement to no more than a 34 days supply
of the drug (certain disease-specific exceptions)
Intervention protocols based on diagnosis of the
participant
Attempt to identify and rectify patterns of questionable or
sub-optimal care
Recent initiatives include interventions for asthma,
diabetes and congestive heart failure
Pharmaceutical Care
Enhanced reimbursement for pharmacist to carry out
participant education and counseling to increase
compliance and prevent inappropriate use
Provides direct clinically relevant patient education over
WISCONSIN
and above regular pharmacy practice
20
Information Technology / Data Analysis
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SeniorCare lead to new data management and analysis
capabilities that will be leveraged into other Medicaid
programs; provides speed, accuracy and consistency
Datamart - pre-aggregated query system, frees analysts from
raw data handling providing more time for analysis
Combines data from claims processing, eligibility and financial
management information and operating systems - difficult to do
and valuable to have
Web-based Drug Inquiry - real time drug coverage and pricing
look-up for all SeniorCare covered products - publicly available
Allows look up by drug label name (participant preference) and
NDC number (provider preference)
Indicates if product is brand or generic, (determines co-payment),
price paid, pricing formula, package size, existence of days
supply restriction, other helpful information
http://apps.dhfs.state.wi.us/SeniorCareDrugInquiry/jsp/home.jsp
WISCONSIN
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Web-based Drug Inquiry - Result for “Lipitor 10mg”
View a full list of definitions
NDC:
00071015523
Effective Date: 09/01/02
1
Co-payment :
BRAND
Maximum Days
34 DAYS
Supply:
Age
NONE
Restriction:
Package Size:
90.00
Perform another search
Label Name:
PA Required:
Medicare
Covered:
Unit Of
Measure:
Diagnosis
Restriction:
Compound
Only:
LIPITOR 10MG TABLET
NO
NO
EACH
NO
NO
Wisconsin SeniorCare Drug Rate Information
Both the Medicaid and SeniorCare ingredient rates are being provided for your
information. The Medicaid ingredient rate is calculated as AWP minus 11.25%, MAC
or Innovator, and the SeniorCare ingredient rate is the Medicaid ingredient rate, plus 5%.
Rate
2
Methodology
AWP - 11.25%
Medicaid
Ingredient Rate
$184.46
(x 105%)
SeniorCare
2
Ingredient Rate
$193.68
WISCONSIN
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Future Pharmacy Management Strategies
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New initiatives may include:
Expanded prior authorization
More generic substitution
Expanded provider profiling and education
Pooled purchasing strategies
SeniorCare program modifications
Further emphasis on access and quality
assurance
Review of electronic systems to ensure
capabilities keep pace with needs
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Contact Information
For additional information on Wisconsin Medicaid
pharmacy programs please contact:
Mr. James Vavra
Director, Bureau of FFS Health Care Benefits
Division of Health Care Financing
Department of Health and Family Services
1 W. Wilson Street Room 350
PO Box 309
Madison, Wisconsin 53701-0309
608-261-7838
vavrajj@dhfs.state.wi.us
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