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National Alliance on Mental Illness
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NAMI POLICY RESEARCH INSTITUTE

STATE ACTION ALERT

February 21, 2003

 

MEDICAID PRIOR AUTHORIZATION PROGRAMS:

A GUIDE FOR ADVOCATES

 

The combination of a preferred drug formulary with prior authorization programs for all non-listed drugs within a state’s Medicaid program is a dangerous proposition for persons with mental illnesses. These programs have the potential to further erode a very tenuous community system of care. Recovery is at risk when Medicaid prior authorization programs make if difficult to obtain needed drugs.

It is critically important for advocates to educate Medicaid directors, and other public officials about the serious consequences of limiting access to medications which is central to the recovery of persons with mental illness. Advocates must highlight that rising Medicaid pharmacy costs be understood as part of the larger picture – dramatic reductions in hospitalizations and criminalization result from access to effective medications.

It is clear, based on presentations to the NAMI Task Force on Access to Medications, that Medicaid prior authorization programs are high risk cost containment strategies and they are not an effective management strategy based on private sector experience. Based on data from Florida that was collected in April 2002, about 35,000 people who sought medications left the pharmacy without filling their prescriptions. It is estimated that nearly one-third of those consumers never received their medications. Another 22,000 people received a different medication or less than the amount prescribed.

It is clear to NAMI that the consequences for people with severe mental illness will be devastating in Florida and other states if Medicaid prior authorization programs and fail-first strategies become more commonplace. Prior authorization programs may help state Medicaid programs control their budgets in the short term, but unintended consequences such as increases in the costs of hospitalization and incarceration in the criminal justice system will offset any savings.

It is critically important that NAMI organizations oppose in all cases the imposition of prior authorization programs that include medications to treat mental illness.

Advocates should:

  • Establish short-term broad-based coalitions with interest groups who have similar objectives on access to prescription drugs.
  • Arrange meetings with state Medicaid officials, officials in the executive branch, as well as with state policymakers and their staffs.
  • Monitor Medicaid P&T Committees in order to raise issues from a consumer’s point of view relative to psychotropic medications that may not be on the radar screen of these committees. Meet with officials from these committees to provide information on medications used by patients with severe mental illnesses.
  • Track the state budget process and hearings that may impact access to prescription drugs.
  • Contact the media and health care reporters to discuss the potential implications to impeding access to prescription drugs.

Key Statistical Talking Points for Advocates

  • We have made significant progress in discovering effective treatments for mental illnesses, and we have made progress in developing services that help people with mental illnesses to achieve recovery, independence, and dignity in their lives. We cannot go backwards due to economic and budget considerations.
  • The indirect economic costs and social and medical consequences that come from inadequate and denied treatments for people with serious mental illness are staggering:
  • Over $100 billion in lost productivity.
  • $12 billion in lost productivity due to premature death, including suicide.
  • $6 billion to incarcerate more than 283,000 persons with mental illnesses in jails and prisons.
  • Anywhere from 50-75% of youth in juvenile justice facilities have a diagnosable and most often untreated mental illness.
  • Approximately one-third of the nation’s 600,000 homeless persons suffer from severe mental illnesses.

The indirect costs and consequences of not supporting mental illness recovery are clear and must be considered even in times of state fiscal pressures. The costs of not treating consumers with serious mental illnesses will make it even more difficult for states to control costs due to increased hospitalizations and more ER and physician visits.

Policymakers must be informed that the newer, more effective medications make a tremendous difference and that access denied is a threat to the state in human and economic terms.

For further information, please contact Mike Fitzpatrick at (207) 353-9311 or Joel Miller at (703) 524-7600.

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