Friday, September 12, 2008

MEDICAL POLICY: State, Medicaid Enact Cost-Cutting Measures

(previously published here at

The Pa. Department of Public Welfare (DPW) last week added early refills of prescription drugs to the state's list of Medicaid services and items that require prior authorization.
An "early refill" is a request for a refill when over 25 percent of the previously filled prescription would normally remain if followed properly. Requiring approval is aimed at preventing people from "stockpiling" medications.

Refilling prescriptions early resulted in Medicaid payments being paid for more than 12 months worth of prescriptions over a 12-month period, according to Stacey Witalec, a DPW spokeswoman.

The DPW's change was made on Aug. 4 and is expected to save the state more than $2.5 million on the purchase of medicines in the 2009 fiscal year. It comes after a failed bid by DPW to take over management of the state Medicaid program's prescription drug program. Matching federal Medicaid dollars would provide a total savings of $5.4 million in 2009 and $6.5 million for fiscal year 2010.

In a similar effort to both cut costs and promote more responsible health care, Philadelphia's three Medicaid HMO plans are following the DPW's lead in not paying hospitals for added costs that result from preventable medical errors.

The DPW estimates that "hundreds of millions of dollars" will be saved under this program, Ms. Witalec said.

Keystone Mercy Health Plan will implement the policy beginning on Oct. 1. The company serves over 293,000 residents, making it the region's largest Medicaid managed-care company.

After Oct. 1, all hospital claims will be required to indicate that the medical condition for which the patient received care was "present at admission" - that it existed before the patient was admitted to the hospital, said Dr. Jay Feldstein, Keystone Mercy's chief medical officer.

Dr. Feldstein said Keystone Mercy have met with its provider hospitals throughout the year to outline the new policy. Provider hospitals covered by the company will retain the right and ability to appeal what DPW has defined as a "preventable serious adverse event."

A hospital trade group, Delaware Valley Healthcare Council (DVHC), has created a team of clinicians and hospital administrators to discuss and review the policies of the Medicaid managed-care companies.

"We're looking for [the HMO's] policies to be clinically sound and financially fair," said Kenneth J. Braithwaite II, a regional executive for the DVHC.

Health Partners, the Philadelphia area's largest not-for-profit health plan serving Medicaid patients, is in the early stages of developing its policy, according to spokeswoman Felicia Phillips.

Health Partners serves over 135,000 members in southeastern Pa. and is owned by a group of seven Philadelphia hospitals, including St. Christopher's Hospital for Children and the Hospital of the University of Pa.

Similarly, AmeriChoice of Pa. has just begun work on how to implement such a policy, Steve Matthews, a spokesman for the company told a local publication. The Philadelphia-based subsidiary of United Health Group has 75,000 members in the five-county area.

DPW's original program, which began in January, was developed to identify and stop Medicaid payments to hospitals for preventable mistakes that result in a serious negative outcome. The program was created in coordination with the Hospital & Health System Association of Pa., a state trade group.

This applies to 27 types of medical errors, or "never events," such as medication mistakes, bad blood transfusions and operating on a wrong body part.

Also in October, the federal Medicare program will stop paying hospitals for procedures and treatment of hospital-acquired conditions in eight categories that cover medical errors, injuries and infections that are judged to "reasonably have been prevented."

New Jersey health officials are waiting for the national program to begin before adopting a state policy of their own.

Heather J. Chin can be reached at

©The Evening Bulletin 2008

No comments: