For a variety of logistical and budgetary reasons (not least of which is the 2010 expansion of Medicaid drug rebates to managed care-administered Medicaid drug benefit plans), states have increasingly decided to either allow or require Medicaid beneficiaries to enroll in Managed Medicaid (MM) plans where reimbursement is based on a capitated or Primary Care Case Management (PCCM) model. In contrast to traditional fee-for-service models (FFS), MM plans allow the state government to outsource management of the Medicaid program to one or more managed care organizations.
California, Illinois, Mississippi, New Jersey, South Carolina, Kentucky, New York, and Ohio made the switch in 2011; Texas and Louisiana followed in 2012; Florida, Kansas, Idaho, New Hampshire, and Washington either switched in early 2013 or are expected to do so in the near future.Because a number of the most populous states made the switch early, the share of all Medicaid prescriptions handled by MM plans grew from 19% to 46% (or, in absolute terms, from 4.9 to 12.5 million monthly prescriptions) during the nine month period ending June 2012.A new report from the IMS Institute for Health Informatics uses anonymized patient data from Kentucky, New Jersey, New York and Ohio, to provide an early assessment of prescription drug usage patterns when patients are switched from fee for service to MM plans. In summary, the Institute found that, in comparison to the control group, patients on respiratory drugs in the MM group had a 3% average incremental increase and patients on diabetic therapy had a 6% incremental increase. As shown by an average difference of 7% in generic utilization rates between FFS and MM patients on antipsychotic therapy, the managed care plans were also more successful in driving generic substitution.The study was not constructed to provide conclusive evidence about the affects of shifting patients to MM plans. Nonetheless, its findings are in keeping with more rational medicine use that might be expected in a more tightly managed population: i.e. greater reliance on drug therapy alongside increased generic utilization rates.