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There is a saying in the consumer movement "Recovery is possible - it happens every day." Members of this movement have defined recovery as "regaining control of one's life on the other side of a psychiatric diagnosis." 

While medication is by no means the "be all and end all" of psychiatric treatment, for many if not most people, medication has played an essential role. This treatment "technology," by abating symptoms, has enabled people with mental illness to take advantage of and benefit from the many other technologies (such as community based case management, wrap around plans, supported employment and housing, and peer-led services) to build or rebuild the type and quality of life they desire. 

It is for this reason that "preserving open access "-assuring that all medications for the treatment of mental illness are equally and easily available -- is so critical. Unfortunately open access been under threat for a number of years. This threat has intensified recently in many states.


Understanding the Stresses on the System

A number of demographic, epidemiological, medical and economic trends have converged to make seeking cost-savings in the pharmacy portion of health care a target and focus for insurers, whether they be private or governmental (i.e.: Medicaid and Medicare). 

Demographically, America is seeing an unprecedented increase in its aging population, as baby boomers reach 65+ in record numbers. Attaining this milestone qualifies individuals (again in unprecedented numbers) for publicly funded health care. This increase in sheer numbers increases the cost of the health care system. Epidemiologically, these new members of the aging (and often Medicare) population are predisposed by virtue of their age and the aging process, to various chronic medical conditions (diabetes, heart disease, high blood pressure, stroke, cancer, and Parkinson's, to name a few). 

Compounding this is the fact that many of these illnesses are co-morbid with each other, and most, if not all, are co-morbid with the mental illness of depression. This increase in "sickness" among the increased total population further increases the cost of the health care system. 

Medically, treatment of illness is dramatically different than it was when health insurance programs were originally designed. Illness at that time was brief and acute, involving operations and short hospital stays which, while expensive, were not typically recurrent or ongoing. Illness today is chronic and ongoing and so is treatment. This increase in length of treatment also increases the cost of the health care system. 

Because of this change, (to chronic illness) some of the greatest growth in health care costs has been in pharmacy - as medication is typically the foundation of treatment of chronic illness.

Economically then, we have a health care system (again whether public or private) that is serving more people who are sicker and whose sickness lasts longer. When the general impact of inflation, and the tendency for legislators to avoid raising taxes, private insurance carriers to avoid reducing profits or stockholder dividends, and voters and stockholders to avoid supporting candidates or CEOs who would do so, is added in there appears to be no option but cost-cutting. 

And because, despite being a relatively small percentage (11-12%) of overall spending, they represent such a large and growing dollar amount, medications are a key target.

Cost Cutting Strategies

Limiting or constructing barriers to access to medication has been the key strategy used by public and private insurers to contain costs. The methods are varied and include: preferred drug lists with prior authorization requirements, restrictive formularies, and tiered co-payment structures. 

Limiting or constructing barriers to access to medication has been the key strategy used by public and private insurers to contain costs. The methods are varied and include: preferred drug lists with prior authorization requirements, restrictive formularies, and tiered co-payment structures.Limiting or constructing barriers to access to medication has been the key strategy used by public and private insurers to contain costs. The methods are varied and include: preferred drug lists with prior authorization requirements, restrictive formularies, and tiered co-payment structures. 

Restrictive Formularies/Preferred Drug Lists 

In the early 1990s, states used drug formularies (lists of medications) to limit Medicaid beneficiaries' access to medications. Many of these formularies contained only one or two mental health medications and rarely did they include the newest or most effective drugs available. In 1992, federal guidelines made it illegal for states to impose such "closed formularies," requiring Medicaid programs to make available all Federal Drug Administration (FDA) approved medications to enrollees. 

Formularies are now called preferred drug lists (PDLs), but the term's definition remains unchanged; a PDL is a list of medications that consumers can access. A physician who wishes to prescribe medications that do not appear on the PDL (or formulary) must obtain prior authorization from the Medicaid agency (or its subcontractor) to allow the patient to obtain the drug medications through the Medicaid program. As a rule, a Pharmacy and Therapeutics Committee (P&T) or another workgroup is responsible for developing the list of approved medications. Theoretically, Medicaid consumers have access to all FDA-approved medications, but in practice, program administrators can make it difficult for people to access this broad choice of drugs. The provider must prove that the medications in the PDL aren't effective or have intolerable side effects for the patient in order to justify their request for a non-PDL-listed drug. 


When Medicaid was first instituted in 1965, states were not permitted to charge beneficiaries for covered services. However, that changed in 1972 when the federal government allowed states to charge nominal fees for services to medically needy beneficiaries. Few states imposed the nominal fees until 1982 when the Tax Equity and Fiscal Responsibility Act (TEFRA) permitted states more autonomy in determining which eligibility groups could be charged and how much states could charge them. 

(B. Stuart and C. Zacker, Who bears the burden of Medicaid drug copayment policies? Health Affairs, March/April 1999; 18(2): 201-212.) 

Certain services, however, were excluded from cost sharing methods. Cost sharing methods include co-payments, premiums, deductibles, and co-insurance. The excluded services included emergency room visits, family planning services and hospice care. Although Medicaid beneficiaries were liable for co-payments, providers could not deny beneficiaries services based upon their inability to provide payment.

In February 2006, the federal government enacted the Deficit Reduction Act of 2005 (DRA) which includes several provisions that impacted Medicaid spending, such as shifting certain costs to beneficiaries and limiting coverage and access to health care services. In addition to increasing the allowed amount of the co-pay, DRA allows states to make co-payments enforceable so that providers and could deny beneficiaries services and prescription medications if a beneficiary is unable to make his or her co-payment at the time the service is rendered. (Kaiser Commission on Medicaid and the Uninsured, Deficit Reduction Act of 2005: Implications for Medicaid, February 2006).


The "Sheep's Clothing"

Given that health care consumers and their loved ones are unlikely to blindly embrace rationing or barriers to the medications that are part of their particular treatment, insurers (public or private) must develop phrases and concepts to make these changes politically and personally palatable. In many cases the philosophy in which they are couched can result in huge support without even bringing up the issue of needed cost savings.

Attempts to implement preferred drug lists and restrictive formularies are frequently couched in terms of patient safety. Insurers and policy makers will reference side effects of medications, particularly the dramatic increases in weight and issues with kidney; functioning that predispose consumers to diabetes and high blood pressure. The issue of "patient safety" is also a highly effective public message when applied to children, and frequently includes the increased risk of suicide when antidepressants are initiated and the unknown long-term effects of psychotropic medications on children's development and overall health. 

In the case of co-pays the galvanizing phrase is usually "personal responsibility," which presumes that everyone (regardless of economic circumstance.) should pay for a portion of their medical costs. The case for co-pays is also couched in the idea that by requiring people to pay for a portion of their services, they will become a "smarter" healthcare consumer, one who avoids unnecessary tests and treatments. 

"Prescriber oversight" the professed desire to assure that doctors and others who dispense these new, complicated and expensive medications adhere to "the best clinical practice" is another battle-cry of entities seeking to reduce access. Specifically these groups cite health care professionals who prescribe more or less than the "typical" dosage of medication, who prescribe more than one of the same type or "class" of medications, or who prescribe "off label," dispensing medications for non-FDA approved illnesses.

While effective, these tactics are generally not valid. Issues of side effects can be better handled by increasing rather than decreasing the number of medications available, as individual patients vary widely in not only their response to medications, but in the side effects they experience. Individuals also vary in those side effects which may be medically tolerable (based on their individual and family medical history) and personally manageable and acceptable. The highly touted suicides of youth on antipresseents often fail to include discussion of psychosocial factors and the availability (or lack there of) of other treatment technologies (case management, psychotherapy, and parent education and support) that represent best practice when working with children with depression and other serious emotional disorders.

The focus on "personal responsibility" for medical care and prescription costs does not address the very real dilemmas faced by persons receiving public assistance, for whom a few dollars means a choice between eating and paying rent, or taking their medications. Given that low income pregnant women and infants and children have been exempted from these personal responsibility requirements, it hardly seems fair that others, who likely receive public assistance for illnesses and disabilities that are at least as significant and likely longer-term, are not.

"Prescriber oversight" as it relates to over or under medication issues and polypharmacy (prescribing of multiple medications for the same illness) fails to take into account the complexity of mental illness, the fact that an individual may have more than one illness, the very real differences (which often occur by race or ethnicity) in dosage response, and the element of "art" as well as science that is a part of the practice of medicine. When these issues occur, they are often the result of "outliers" - either a small number of medical professionals (usually non-psychiatrists, often practicing in rural or frontier areas) who may lack training in psychiatric medicine opportunities to stay abreast of developments in the field, or a small number of psychiatrists (usually working on inpatient units or community health centers) who are dealing with "the sickest of the sick" and applying years of practice knowledge in their attempts to effectively treat patients. "Off label" dispensing issues are also frequently the result of "outlier prescribers" but in this case, as off-label is usually an issue in prescribing for kids, it is usually the result of a well seasoned psychiatrist practicing the "art" of medicine.

While patent safety and best practice prescribing are valid concerns, there are highly effective ways (which also save money) to address this issue without "punishing the many (both patients and doctors) for the sins of the few."


The Problem with these Strategies

At its heart, the problem with cutting spending by cutting pharmacy is that medication is the generally a foundational element of treatment for chronic disease of all types.

For some illnesses, like cancer and high blood pressure, medication prevents death and prolongs life; for others, like diabetes, it prevents worsening of the conditions; for others like Parkinson's and arthritis, it helps with the symptoms, makes the illness "manageable" and allows for optional function and quality of life. 

It is into this last category, particularly, that mental illnesses - diseases of brain structure, chemistry and functioning-fall. Medication, for many, enables recovery.

More pragmatically, the problem with cutting spending by cutting pharmacy is that ultimately it doesn't save money. Reducing access to medications, by virtually any mechanism, results in people requiring more costly treatment in the long run. 

In the case of co-pays, research shows that while co-payments do lead people to reduce their use of medical care, they do not necessarily make the person a smarter health care consumer. In fact, when higher co-payments are imposed, patients reduce their care for both essential and less-essential services. There is ample research to show that even modest increases in cost sharing will have a negative effect on beneficiaries' use of health care services. Medicaid costs then increase due to untreated conditions and worsening conditions, which result in the need for more expensive forms of care, such as emergency room treatment or hospitalization.

In 1971 RAND Health embarked on a 15-year study, The RAND Health Insurance Experiment (HIE) to explore cost sharing and its implications on utilization, and health care. The HIE found that low-income adults (defined in the study as equivalent to 200% of the poverty level) reduced their medical visits by 41% when they were responsible for co-payments. The study also found that health care consumers were not necessarily more educated or conscious of their utilization practices because they were responsible for co-payments, but rather they used fewer services or did not receive care altogether. The Rand Health Insurance Experiment April21, 2007)

Reducing access to medications, by any of the above mechanisms, also results in treatment lapses or discontinuation, by close to 30% of patients. Soumerai, et. Al., Use of Atypical Antipsychotic Drugs for Schizophrenia in Maine Medicaid Following a Policy Change, Health Affairs, September 2000). 

These lapses, when applied to mental health consumers and their medication regimen, can result in very rapid decompensation - in as little as 1-10 days. This can double the risk for hospitalization. Law, et al., Journal of Clinical Psychiatry Vol. 69, No. 1, January 2008. Weiden, Et. Al., Partial Compliance and Risk of Rehospitalization Among California Medicaid Patients with Schizophrenia, Psychiatric Services, Vol. 55, 2004. 

Use of more-costly medical treatments (hospitals, emergency rooms, and crisis services) are not the only "adverse events" that result from copays, restrictive formularies and preferred drug lists.

Two Key Studies (The impact of Medicare Part D on Medication Access and Continuity: Preliminary Findings from a National Study of Dual Eligible Psychiatric Patients; West, Joyce C. Ph.D., MPP, Director, American Psychiatric Research Network; American Psychiatric Association; and Medicaid Prescription Drug Policies and Psychopharmacologic Treatment Access and Continuity: Findings From Ten States; West, Joyce C. Ph.D., MPP, Director, American Psychiatric Research Network; American Psychiatric Association) showed that:

  • Disruptions in medication continuity are associated with significant adverse clinical outcomes
  • 69% of patients with medication access problems had adverse events compared to 40% for patients with no access problems. These adverse events include:
    • 20% had emergency room visits
    • 11% were hospitalized
    • 23% had side effects significantly worsen - interfering with functioning and out-weighing therapeutic benefits
    • 22% had an increase in suicidal ideation or behavior.
    • 15% had an increase in violent ideation or behavior.
    • 3% became homeless for more than 48 hours.

Further, lapses increase the odds for homelessness by three times, and double the odds of incarceration or detention in prison or jail, and Medicaid mental health patients with irregular medication use not only had twice the rate of hospitalization, but had hospital stays that were three times longer and four times as costly compared to patients who were consistent with their medication. (Weiden,, Partial Compliance and Risk of Rehospitalization Among California Medicaid Patients with Schizophrenia, Psychiatric Services, Vol. 55, 2004). 

Finally, in several illnesses, including schizophrenia and bipolar disorder, relapse is associated with loss of brain function, aggravation of other functional deficits, and worsening of the course of the disease, limiting prospects for a productive, satisfying life for the patient. (Wyatt,, First Episode Schizophrenia: Early Intervention and Medication Discontinuation in the Context of Course and Treatment, British Journal of Psychiatry, Vol172, Supplement 33, 1998).

Adverse events and reduced chances for recovery aside, mechanisms for reducing access to medication have other costs. These are often overlooked, and may be less apparent, as they don't typically show up in the pharmacy, or even the mental health budget.

Cutting pharmacy generally results in increased spending and in health care, in other "social services", and in bureaucracy (layers of management and new administrative systems and departments in insurance companies and state government; more billing clerks and less time with patients in medical offices) to monitor and enforce policies and procedures. Prior authorization costs for a single antipsychotic have been reported as high as $200,000. (NMHA, Policy Position, Restrictive Formularies, 1999.)

Implementing access restrictions shifts costs to jails, prisons and services like shelters and soup kitchens for the homeless. Given that these costs are generally ineligible for Federal Medicaid match they have the strong potential to erode, consume, or overtake any cost savings that might be generated from medication restrictions.

To add to the stupidity of these policies, several studies have shown that authorization for the medication and dosage in question is ultimately granted in 90% of cases.


Strategies for Advocacy: The Alternatives, The Attempts and the Next Steps

Unfortunately, for co-pays, no programs or strategies have been found which mitigate the negative impacts of this "cost savings" mechanism. Indeed, in numerous states (and countries) this mechanism has been shown to be ineffective and untenable.

Utah imposed a nominal co-payment ($2 or $3 per service or prescription) on its Medicaid beneficiaries for those with incomes below the Federal Poverty Level. As a result, there was a significant reduction in health care access and utilization, with physician visits for Medicaid beneficiaries being reduced from 600 visits per 1,000 enrollees to less than 400 visits per 1,000 enrollees. According to reports approximately two-fifths of beneficiaries resorted to reducing the amount of money they spent on food or housing, or they made their prescriptions last longer than intended, essentially self-medicating. Forty percent of beneficiaries affected by cost sharing in Utah reported the co-payment increases caused "serious" financial hardships. (1S.Wilhide. Medicaid Topics: State-By-State Comparison Cost Sharing: Co-Pays" American Academy of Pediatrics, October 2005.)

In 1992, Tennessee imposed co-payments on its Medicaid beneficiaries. Nearly 20% of those who visited their doctor were unable to pay the co-payment. Furthermore, of the 22% of individuals unable to make their co-payment for prescription medications, nearly two-thirds went without their medications. (Changing the Poor More for Health Care: Cost-Sharing in Medicaid" Center on Budget and Policy Priorities.)

Even countries with national health insurance programs have tried to implement cost-sharing and the subsequent research demonstrated barriers to care. In 1996, Quebec imposed co-payments for prescription drugs on more than 100,000 welfare recipients. The researchers found that after the imposition of co-payments, the beneficiaries filled fewer prescriptions for essential medications. The co-payments led to a 78% increase in the occurrence of adverse events, including death, hospitalization, and nursing home admissions. Co-payments also led to an 88% increase in emergency room use. (R. Tamblyn, R. Laprise, J. Hanley, et al., "Adverse Events Associated with Prescription Drug Cost-Sharing among Poor and Elderly Persons, "Journal of the American Medical Association, 285(4), January 2001).

As a result, the advocacy strategy when it comes to co-pays is to block it all at costs. This is a "hill to die on." Coalition building, with advocacy and provider/social service organizations representing other diseases that result in disability (HIV/AIDS, diabetes, heart, MR/DD, etc.), and advocacy and provider service organizations that represent low income persons and the medically underserved, will be key to preventing these measures from being adopted. Use the Fact Sheets and Talking Points in this tool kit to arm yourselves.

The advocacy strategy when it comes to restrictive formularies and preferred drug lists is a bit broader, as there are a number of programs and strategies that have been tested in the states. These strategies address the proponent's concerns about patient safety, poor prescribing practices, and polypharmacy in ways that avoid the pitfalls of PDLs, allow for individualized treatment decisions to be made by the patient and their provider, improve patient outcomes, and save money. These strategies include Behavioral Pharmacy Management systems, Treatment Algorithms and Disease Management Programs.

Behavioral Pharmacy Management Systems were initiated in Missouri and Pennsylvania in the early 2000's. They involve a software program which reviews Medicaid pharmacy claims against an evidence-based algorithm for mental health medications to identify "outlier" prescribing patterns that fall outside of clinically recommended practices, such as multiple antipsychotics or unusually high or low doses of medications. Prescribers with unusual patterns are sent information designed to improve prescribing. The software can be customized to elicit prescribing patterns which are of particular concern to a given state. In addition, informational packets may be followed by "peer to peer" education calls regarding evidence-based guidelines and best practices, particularly if the initial effort failed to change a prescriber's habits.

These educational programs are particularly helpful for the large number of primary care physicians who prescribe for patients with serious mental illness, yet who are often unfamiliar with best practice guidelines for prescribing psychiatric medications. Research shows this program not only realigns prescribing patterns, it reduces rates of growth in pharmacy spending. In Missouri during 2001-2002 there was an 11% increase in behavioral pharmacy costs among all prescribing MDs, however, MDs who received this intervention had no increase in costs. These programs have been expanded to other states, including New Jersey, and to a limited extent, Kansas.

A similar strategy is Prescription Case Management programs, which help monitor and ensure appropriate medication usage - often for a targeted population - through joint clinical reviews when prescribing activity is unusually high or outside of usual clinical practice. A good is example is the North Carolina Nursing Home Polypharmacy Initiative, in which a state physician/pharmacist team reviews the cases of nursing home residents who take more than 18 medications in 90 days and then makes recommendations to improve care. In 2002, the state's nursing homes carried out 74 percent of team recommendations, improving the health of their residents and savings the state $16 million in drug costs.

Algorithms were initiated in Texas, with a program called TMAP. TMAP is a disease management program for schizophrenia, bipolar disorder, and major depression. Under this program, evidence-based, consensus-derived clinical guidelines (algorithms) are developed. Training and ongoing technical assistance is then provided for clinicians in use of new medications and algorithms. The program also includes patient and family education regarding the disorder, treatment, and self-care. Key to the project's success is uniform documentation of treatment steps and decisions and outcome assessment.

Disease Management Programs, typically developed for other chronic illnesses such as diabetes, are similar. Key to these programs is education for the patient on disease management, medication usage and side effects, and self care strategies. In addition to Arkansas and Colorado, which have developed diabetes models that could be tailored to mental illness, mental health advocacy and consumer run organizations have at their disposal numerous programs and curricula, including Mary Ellen Copeland's WRAP Program, and MHA's Dialogue for Recovery. All of these, if broadly used, show great potential for improving consumers' use of and benefit from medications and other treatment technologies thereby reducing many of the problems which result in costly "adverse events".

It is important to note in proposing any of these alternatives that advocates are that programs are quality, not just cost-driven; improved health and functioning must be factored in. Mental health advocates, consumers, and family members must be a part of the planning process particularly in the selection of targets, curricula, and programs. Information about the programs must be available to the public. Ongoing review and evaluation must be part of the program, and must look beyond costs in pharmacy to costs elsewhere in the mental health, health care and social service delivery system, as well as including administrative costs.

Proposing any of these alternatives to preferred drug lists or restrictive formularies is best done in coalition. Key members certainly include the "usual suspects" of mental health and consumer advocacy and provider organizations. The coalition should also include organizations and service providers who will experience the cost shifting impacts (law enforcement, corrections, hospitals, homeless service providers) and the burden of increased bureaucracy and paperwork (state Medicaid agency; physicians; psychiatrists; and social workers; professional organizations). This coalition, like the one to block co-pays, should strive to include organizations that serve and advocate for persons with other medical conditions, particularly those conditions like cancer, arthritis, heart disease, stroke etc., that are co-morbid with depression and whose patients would be impacted by these limits.

Strategically, the best case is to obtain or maintain an "exemption" from these strategies for mental health diagnoses and the medications that treat them. In its discussion of model prior authorization programs, the Kaiser Family Foundation recommends that certain medications be exempt from prior authorization requirements. These include:

  1. All psychotherapeutic, anti-viral and anti-convulsive medications.
  2. All name brand drugs with narrow therapeutic indices.
  3. All name brand drugs for which side effects have been linked to use of the generic equivalent.
  4. All drugs administered in connection with organ transplants.

For our purposes, the broader the exemption (one that covers all diagnoses in the DSM, for example, or all medications in any class used to treat these diagnoses) the better. The next best case is to determine, with your coalition if at all possible, which diagnoses should be exempted. Typically these are the "major mental illnesses" (Axis I in the DSM) which include depression, bipolar and schizophrenia. Harder to get included, but equally important are the anxiety disorders. Alternately (again, with your coalition) determine which classes of medications are most critical to exempt (usually the antipsychotics, mood stabilizers and the SSRIs or SNRIs - preferably both! - used to treat depression). Once your coalition has reached consensus, use the "Talking Points" and Fact Sheets contained in this tool kit to arm yourselves for battle.

If it appears that despite your best efforts a restrictive formulary or preferred drug list which impacts mental health medications, is going to be implemented, all is not lost. Medicaid rules require that "the placement of any limitations on access to medications be "in the best interest of the recipients." 42USC&1396a (a)(19)

The "fall back position" for advocates in these circumstances revolves around assuring adequate patient protections. These are our "hills to die on". They are at the very least, to grandfather people who are stabilized. This means that prior authorization should be automatically approved for individuals already stabilized on medications. In order to do this, there must be the ability to track patient history to determine past experiences with medications. In addition, in accordance with congressional specifications, physicians must maintain the authority to make medical judgments, even when prior authorization requirements exist.

It is almost as important to be sure the process makes sense. Anybody deciding on formularies, or overseeing authorizations of non-formulary or non-preferred drugs needs to include currently practicing health professionals, currently practicing psychiatrist/s, current Medicaid health consumer/s, and currently practicing non-medical mental health professional/s or advocate/s. In addition, advocates, consumers, family members and providers should have input into the process and review of documents. This requires that notice of meetings, proposed policy changes, policy changes under consideration and other relevant issues needs to be made available to the public well in advance. Further, the committee should be able to ask questions of individuals submitting testimony.

In any case, it is the job of advocates to assure that whatever happens, Medicaid rules are followed. These include: response within 24 hours of receiving any consumer's prior authorization request; provision of a 72-hour supply of medications during emergencies; and no restriction of access to medications that are prescribed for children (anyone under the age of 21) when those medications are determined to be medically necessary.

Finally, it is up to advocates to be sure that states track administrative costs of the program; track healthcare costs and impact across the system; provide a hotline for program recipients; and make results of data public.

Only with this data can we know whether we may have lost a battle, but won the war, or whether we need to re-arm to fight another day.