Medicaid Malpractice

States Put Patient Recovery At Risk By Restricting Prescription Drugs

Mar 10 2003

Arlington, VA - The National Alliance for the Mentally Ill (NAMI) today released a 10-point policy prescription for State Medicaid programs to ensure access to effective medications for people with severe mental illnesses-challenging moves by states to save money by restricting drug benefits.

"These ten points call for Federal and state action," said Michael Fitzpatrick, director of NAMI's Policy Research Institute (NPRI). "In too many cases, current state initiatives to control drug costs are penny wise, but pound foolish. Too many times in the past, people with mental illnesses have been neglected or abandoned-at a terrible cost. As a society, we know how to treat mental illnesses, but too often, the investment is too little, too late."

"Restrictions on access to effective medication are acts of budget desperation-not enlightened leadership. They will compromise recovery and lead to greater costs elsewhere. They represent bad medicine and Medicaid malpractice."

"States are not putting the interests of patients first."

Approximately 45 states are instituting or considering restrictions on Medicaid drug benefits-through preferred drug lists, fail-first requirements, pill-splitting, increased co-payments and other measures. The cost of prescription drugs has increased an average of 18 percent since 2000, and is considered the most significant factor responsible for increased Medicaid costs.

The NAMI program includes support for the National Governors Association in seeking to increase the Federal Medical Assistance Percentage (FMAP) for Medicaid.

Debate over drug restrictions has been especially fierce this year in Colorado, Florida, Georgia, Illinois, Iowa, Massachusetts, Mississippi, Nevada, New Jersey, New York, New Mexico, Ohio, Oklahoma, Oregon, South Carolina, Texas, Tennessee, Washington, West Virginia, Vermont, and Virginia.

"The debate will extend well beyond 2003," Fitzpatrick said. "Anyone who thinks this year is bad should wait until 2004. Legislatures are undermining doctor-patient relationships and the exercise of professional judgment."

Text of 10-Point Program

With more than 220,000 members and 1200 state and local affiliates, NAMI is the nation's largest grassroots organization dedicated to improving the lives of people with severe mental illnesses. Funding sources for NAMI programs include hundreds of state and local governments and foundations; tens of thousands of individual donors; and a growing number of corporations. NAMI's greatest asset, however, is its volunteers-who donate an estimated $135 million worth of their time each year to education, support and advocacy. NAMI does not endorse any specific medication or treatment.


NAMI Policy Research Institute

March 2003

Prior Authorization Threatens Consumers' Health

To control pharmaceutical spending and to attempt to control their budget expenses, a number of states have adopted or are considering restrictions on access to certain types of expensive medications, including psychotropic medications, in their Medicaid programs. States will be attempting to control drug costs in several ways such as placing certain drugs on a list requiring prior authorization before dispensing -- and requiring as a prerequisite for authorization of a specific, often non-formulary medication - that the patient fail on at least one other medication.

These prior authorization initiatives pose significant threats for Medicaid recipients with serious mental illnesses trying to access medications prescribed by their treating physician. While NAMI understands that states must make tough decisions in the face of the current budget crisis, these programs will jeopardize consumer health if they restrict access to needed medications.

Based on data from Florida and Michigan thousands of Medicaid recipients have left the pharmacy without filling their prescriptions due to the prior authorization programs.

It is clear to the NAMI Policy Research Institute that the consequences for people with serious mental illness will be devastating if Medicaid prior authorization programs and other cost control initiatives become more commonplace. Based on costs rather than health and safety, prior authorization programs, preferred drug lists and fail first procedures often force physicians and consumers to choose medications that they would otherwise not prescribe. Restrictions on access to psychotropic medications not only jeopardize consumer health, but they fail to reduce overall health costs. Multiple studies have shown that in the long run, such policies actually increase costs in hospitalization as well as emergency and primary care.

NAMI Policy Research Institute's Prescription to Ensure Access to Medications

In response to the developing threats to access to medications for people with serious mental illness, the NAMI Policy Research Institute's Access to Medications Task Force was created and charged by the Board of Directors to examine the available evidence and provide policy guidance on this issue to the NAMI Board, NAMI's grassroots' advocates, and policymakers.

Based on the task force deliberations, NAMI recommends the following 10-point program to ensure open access to medications in the current budget deficit environment. This program is an integrated, comprehensive approach to addressing the needs and interests of the people with serious mental illnesses who need access to medications for recovery.

Federal Strategies

  1. NAMI supports an increase in the "Federal Medical Assistance Percentage," or FMAP to get states through these difficult financial times. Cutting back on Medicaid spending by states will result in severe service, infrastructure and community impacts due to the loss of federal funds. We are supporting efforts of the National Governors Association and other groups to increase the Medicaid matching rates.
  2. NAMI supports appropriate, emerging legislative initiatives to expand prescription drug coverage for Medicare beneficiaries. We believe that state pressure to control prescription drug spending will mount in the absence of a Medicare drug benefit.
  3. NAMI supports system-wide health care reform to reduce fragmentation in the delivery of mental health services and to ensure access to the most effective treatments.
  4. NAMI supports increased funding allocations to the National Institute for Mental Health (NIMH) to gain better insights on access to new medications and supports increased funding for research on evidence-based practices.

State Strategies

  1. When it comes to medications, particularly for mental illnesses, one size clearly does not fit all. Each person can react differently to anti-psychotic or anti-depressant medications both in terms of efficacy and potentially dangerous side effects. NAMI opposes the use of Medicaid prior authorization programs to control prescription drug costs and utilization. NAMI believes that Medicaid prior authorization programs are high-risk cost containment strategies and they are not an effective cost-management strategy based on private sector experience. The most cost effective and humane solution is to respect the roles of the practitioner and consumer to select the treatment that works best.
  2. If prior authorization programs are in place or being strongly considered, NAMI supports carve-outs for anti-psychotic, anti-depressant, anti-anxiety and anti-convulsant medications from restrictive cost control programs in order to ensure that people with mental illness have open access to medications that maintain recovery.
  3. NAMI supports research efforts by pharmaceutical companies to develop new medications but opposes pricing practices that make these medications unaffordable.
  4. NAMI supports the development of notification, grievance and appeals procedures to protect Medicaid recipients with serious mental illness.
  5. NAMI will participate, as appropriate, in class-action suits, and file amicus briefs, that would oppose restricting Medicaid clients' access to prescription drugs through prior authorization programs.
  6. NAMI supports "Polypharmacy Education Programs" that are aimed at reducing the over prescribing of medications as an alternative to restrictive cost containment programs and the development of explicit treatment protocols with rigorous follow-up assessments.


NAMI remains opposed to state policy changes that put costs ahead of consumer health care and stands ready to work with states to find real solutions to current budget problems. NAMI looks for every opportunity to work with state and federal policymakers and to ensure that limited public dollars are used in the most effective way to protect access to the most effective treatments for people with serious mental illnesses. We encourage policymakers to consider a comprehensive and coordinated effort to address the needs of people with serious mental illness to prevent long-term damage to an already inadequate system of care.