Lawmakers Seeking Freer Hand for Medicaid Docs

State legislators want doctors to be able to prescribe drugs for Medicaid patients with less oversight from the private plans that oversee prescription drug coverage.

Doctors had a freer hand with their prescription pads until last year, when New York turned to commercial companies to manage patients’ prescription drugs, as part of a large movement to reduce Medicaid spending.  The state, however, gave those companies — prescription benefits managers or PBM’s — a veto of sorts over doctors on the right to “prior authorization” of prescriptions.

But now, less than a year later, the state Senate, with backing from some key Assembly members, would eliminate the companies’ right to prior approval. The budget provision may or may not survive negotiations with Governor Andrew Cuomo’s staff, but consumer and physician advocates are pushing hard to restore the “prescriber prevails” process.

“Already, physicians feel that the medication approval processes in New York cost them unnecessary time and money as they seek to assure that their patients have access to the medications they prescribe,” said Dr. Neil Nepola, a Staten Island family doctor and president of the New York State Academy of Family Physicians, during budget hearings.

New York expects to get $100 million in Medicaid drug savings from using the PBM’s. As with other forms of managed care, the promise is not only to save money but improve patient care.

“We’re concerned about the patient’s safety,” said Paul Macielak, president of the New York State Health Plan Association. “There is only a very limited number of physician prescriptions that require a prior authorization — a review of whether for that drug and that patient, whether it’s the appropriate dose, the appropriate drug, whether there’s contraindications, whether there’s possible fraud or abuse issues.”

Macielak said PBM’s are mainly focusing on painkillers and certain psychiatric medications. He says of the 3.5 million prescription requests in January, managed care companies made about 30,000 initial denials — less than 1 percent — and most of those were eventually reconciled. He gave as an example a PBM that flagged a prescription of a strong anti-psychotic prescribed to a 7 year old. The drug is not recommended for children.

Macielak also said it could be difficult for the state to achieve its projected savings if PBM’s can’t use prior authorization to deter doctors from over-prescribing. He added that private insurance companies have this mechanism, so there’s no reason Medicaid shouldn’t.

“The program has only just been implemented, and we’re still going through the transition, and we think it’s too soon to undo the program to go back to the ‘good ol ways’ of doing things,” he said.

Assembly Health Committee Chairman Richard Gottfried opposed the switch to PBM’s in 2011 and thinks softening their authority now is a step in the right direction.

“It’s pretty hard to argue that PBM’s are looking out for the patient,” Gottfried said. “They are a business making a profit for stockholders. They are not a professional practicing health care.”