Impact of Restrictive State Policies Impact of Restrictive State Policies on Utilization and Expenditures in on Utilization and Expenditures in

the Medicaid Programthe Medicaid Program

Roberto Vargas, MD, MPHRoberto Vargas, MD, MPH1,21,2

Carole Gresenz,Carole Gresenz, PhDPhD22

Jessie Riposo, MSJessie Riposo, MS22

Jeannette Rogowski, PhDJeannette Rogowski, PhD33

JosJosé é Escarce, MD, PhDEscarce, MD, PhD1,21,2

1.Division of General Internal Medicine and Health Services Research, David Geffen School of Medicine at UCLA

2.RAND Health3.University of Medicine and Dentistry New Jersey, School of Public

Health

BackgroundBackground

For state Medicaid programs, the For state Medicaid programs, the Deficit Reduction Act eliminatedDeficit Reduction Act eliminated Need to offer all benefits to all Need to offer all benefits to all

enrolleesenrollees Requirement of states to get federal Requirement of states to get federal

waivers before limiting benefits or waivers before limiting benefits or imposing co-pays and cost sharingimposing co-pays and cost sharing

Mandatory periods of public Mandatory periods of public comment prior to implementing comment prior to implementing such changessuch changes

Restrictive Policies and Restrictive Policies and MedicaidMedicaid

Restrictive drug policies have been Restrictive drug policies have been associated with lower rates of associated with lower rates of prescription filling and more prescription filling and more intensive use of acute care, nursing intensive use of acute care, nursing homes and higher overall costshomes and higher overall costs

Cost sharing and limits on physician Cost sharing and limits on physician visits in Medicaid have varying visits in Medicaid have varying effects on physician visits rates but effects on physician visits rates but no significant impact on overall costs.no significant impact on overall costs.

Aims Aims

To examine the effects of To examine the effects of restrictive policies on use of care restrictive policies on use of care by a nationally representative by a nationally representative sample of Medicaid enrollees sample of Medicaid enrollees over a six-year periodover a six-year period

Data SourcesData Sources

State Medicaid Summaries from State Medicaid Summaries from

1997-20021997-2002 Summaries of state plan benefits Summaries of state plan benefits

including scope of medical care (Limits including scope of medical care (Limits

on visits and services and co-pays)on visits and services and co-pays)

The Medical Expenditure Panel The Medical Expenditure Panel

Survey (MEPS), 1997-2002Survey (MEPS), 1997-2002

Study SampleStudy Sample

Adults 18-64 Adults 18-64 with at least one full with at least one full

calendar year of data in MEPScalendar year of data in MEPS We excluded: We excluded:

Patients who were pregnantPatients who were pregnant

Had additional forms of insuranceHad additional forms of insurance

Were enrolled inn Managed care or Were enrolled inn Managed care or

HMO’sHMO’s

Study DesignStudy Design

Cross sectional, yearly analytic files of Cross sectional, yearly analytic files of

respondents respondents

Multivariate regression models and Multivariate regression models and

simulationssimulations

Estimate the impact of state policy variationEstimate the impact of state policy variation

Controlling for individual characteristics, Controlling for individual characteristics,

health care market factors, and community health care market factors, and community

contextual factors contextual factors

OutcomesOutcomes

Utilization:Utilization: Outpatient office-based physician visitsOutpatient office-based physician visits Outpatient office visits (non-physician and Outpatient office visits (non-physician and

physician)physician) Emergency room visitsEmergency room visits Inpatient acute care hospital admissionsInpatient acute care hospital admissions

Expenditures:Expenditures: Prescription drug expendituresPrescription drug expenditures Total healthcare expenditures excluding Total healthcare expenditures excluding

vision and dental servicesvision and dental services

Key Independent Variables: Key Independent Variables: Medicaid Restrictive Medicaid Restrictive

PoliciesPolicies Any physician visit co-payAny physician visit co-pay Any emergency room visit co-payAny emergency room visit co-pay Any prescription drug co-payAny prescription drug co-pay Inpatient admission co-pay for stay of Inpatient admission co-pay for stay of

greater than $21greater than $21 Any inpatient co-pay charged dailyAny inpatient co-pay charged daily Office-based physician visit limit Office-based physician visit limit Less than or equal to three Less than or equal to three

prescription limit per monthprescription limit per month

AnalysisAnalysis Regression Models:Regression Models:

Office-based visits: Negative binomial Office-based visits: Negative binomial modelmodel

Any emergency room: Logit modelAny emergency room: Logit model Any inpatient night: Logit modelAny inpatient night: Logit model Expenditures: selected Two-part modelsExpenditures: selected Two-part models

Simulations:Simulations: We simulated values for the utilization We simulated values for the utilization

and expenditures weighted for the MEPS and expenditures weighted for the MEPS sampling designsampling design

Descriptive Data:Descriptive Data:Individual Individual

CharacteristicsCharacteristicsIndividual-Level VariablesIndividual-Level Variables

FemaleFemale 64%64%

Non- Hispanic Black Non- Hispanic Black 28%28%

HispanicHispanic 21%21%

Other Non-WhiteOther Non-White 5%5%

Non-Hispanic WhiteNon-Hispanic White 46%46%

SSI RecipientSSI Recipient 41%41%

Income<povertyIncome<poverty 59%59%

Less than high schoolLess than high school 48%48%

Descriptive Data:Descriptive Data:OutcomesOutcomes

Utilization and ExpendituresUtilization and Expenditures Mean (Std Err)/Mean (Std Err)/

%%

# Office-based physician visits# Office-based physician visits 5.70 (0.33)5.70 (0.33)

# Total office-based visits# Total office-based visits 8.03 (0.69)8.03 (0.69)

Any emergency room visit %Any emergency room visit % 24%24%

Any inpatient admission %Any inpatient admission % 14%14%

Prescription expendituresPrescription expenditures $1098.28 (56.92)$1098.28 (56.92)

Total medical expendituresTotal medical expenditures $4575.92 (320.53)$4575.92 (320.53)

Descriptive Data:Descriptive Data:Restrictive Medicaid Restrictive Medicaid

PoliciesPoliciesPolicyPolicy 19971997

Any Physician Visit Co payAny Physician Visit Co pay 1818

Limit on number of Physician VisitsLimit on number of Physician Visits 1717

Any Emergency Room Co payAny Emergency Room Co pay 44

Prescription Co payPrescription Co pay 2929

Limit on number of prescriptions per monthLimit on number of prescriptions per month 1111

Inpatient Admissions Co payInpatient Admissions Co pay 1414

Inpatient Daily Co payInpatient Daily Co pay 55

Regression ResultsRegression Results

Visit limit policies Visit limit policies had no significant had no significant impact on visits that included non-impact on visits that included non-physician care, emergency room visits, physician care, emergency room visits, or inpatient hospital staysor inpatient hospital stays

Limiting prescriptionsLimiting prescriptions to three per to three per month had no significant effect on any of month had no significant effect on any of our utilization or expenditure measuresour utilization or expenditure measures

Per day inpatient co-payPer day inpatient co-pay was not was not associated with hospitalization rates or associated with hospitalization rates or expendituresexpenditures

Regression ResultsRegression Results

Co-pays for physician visitsCo-pays for physician visits Lower Any ER visit rate (20% Lower Any ER visit rate (20%

compared to 25%; p<0.10)compared to 25%; p<0.10) Higher rates of inpatient Higher rates of inpatient

hospitalization (18% compared to hospitalization (18% compared to 13%; p<0.05)13%; p<0.05)

Higher average total expenditures Higher average total expenditures ($5,431 compared to $4,271; ($5,431 compared to $4,271; p<0.05)p<0.05)

Regression ResultsRegression Results

Inpatient admission co-pays of Inpatient admission co-pays of greater than $21greater than $21 Fewer Admissions (9% compared to Fewer Admissions (9% compared to

15%; p<0.10)15%; p<0.10) ER visit co-paysER visit co-pays

Lower total expenditures ($3,719 Lower total expenditures ($3,719 compared to $4,665; p<0.01)compared to $4,665; p<0.01)

Regression ResultsRegression Results

Prescription drug co-pays:Prescription drug co-pays: Lower expenditures ($4,145 Lower expenditures ($4,145

compared to $5,088; p<0.05)compared to $5,088; p<0.05) Prescription drug co-pays:Prescription drug co-pays:

Significantly lower average number Significantly lower average number of physician office-based visits (5.58 of physician office-based visits (5.58 compared to 6.70; p<0.05)compared to 6.70; p<0.05)

ConclusionsConclusions Some Some co-paysco-pays were associated with were associated with

lower expenditures and utilizationlower expenditures and utilization Visit limit policies,Visit limit policies, no significant no significant

impact on either outcomes of interestimpact on either outcomes of interest Certain restrictive policies are Certain restrictive policies are

associated with associated with unintended unintended consequencesconsequences such as the association such as the association of physician visit co-pays with higher of physician visit co-pays with higher hospitalization rates and costshospitalization rates and costs

ImplicationsImplications

Efforts to reduce costs through Efforts to reduce costs through restrictive policies have varying restrictive policies have varying effects on utilization and expenditureseffects on utilization and expenditures

As states consider greater use of As states consider greater use of restrictive policies there is a need to restrictive policies there is a need to monitor the impact of restrictive monitor the impact of restrictive policies for unintended consequencespolicies for unintended consequences

Supplemental Supplemental SlidesSlides

ResultsResults

Simulation VariableSimulation

ValueMean Std Err Mean Std Err Mean Std Err Mean Std Err Mean SE Mean SE

Any Office-Based Doctors Visit Limit 0 6.29 (0.37) 8.59 (0.62) 0.23 (0.02) 0.15 (0.01) 1109.85 (53.88) 4367.27 (314.30)1 6.00 (0.48) 8.35 (0.84) 0.24 (0.02) 0.13 (0.01) 1158.08 (59.87) 4953.56 (472.73)

Any Physician Visit Co pay 0 6.08 (0.36) 8.68 (0.68) 0.25* (0.02) 0.13** (0.01) 1115.04 (49.85) 4270.69** (267.43)1 6.38 (0.59) 8.07 (0.84) 0.20* (0.02) 0.18** (0.02) 1152.68 (87.88) 5430.74** (546.01)

Any ER visit Co pay 0 6.24 (0.34) 8.52 (0.62) 0.23 (0.01) 0.14 (0.01) 1120.45 (39.32) 4664.96* (255.82)1 4.88 (0.71) 7.94 (1.39) 0.24 (0.05) 0.14 (0.01) 1254.47 (146.76) 3718.50* (686.33)

Any Prescription Co pay 0 6.70** (0.47) 8.75 (0.75) 0.22 (0.02) 0.15 (0.01) 1108.34 (57.79) 5087.92** (397.68)1 5.58** (0.37) 8.18 (0.69) 0.25 (0.02) 0.14 (0.01) 1151.77 (62.87) 4144.60** (303.82)

Limit of Three Rx per Month 0 6.15 (0.33) 8.51 (0.61) 0.23 (0.01) 0.14 (0.01) 1126.5 (37.46) 4589.28 (256.60)1 7.15 (1.47) 7.56 (1.53) 0.29 (0.09) 0.15 (0.05) 1364.48 (432.14) 5565.32 (2042.71)

Any Inpatient Admission Co pay 0 - - - 0.15* (0.01) - 4671.56 (261.84)greater than $21 Per Stay 1 - - - 0.09 (0.02) - 3778.01 (726.14)

*p<0.10; **p<0.05

Any Prescription Drug Expenditure

(Spec 1)Any Expenditure

(Spec 1)Physician Office-

Based VisitsPhysician and Non-Physician Visits Any ER Visit

Any Inpatient Hospital Night

States Level Restrictive States Level Restrictive PoliciesPolicies

Policy Level VariablesPolicy Level Variables 19971997 19981998 19991999 20002000**

20012001 20022002

Any Physician Visit Co payAny Physician Visit Co pay 1818 1818 1818 1717 1717 1919

Limit on number of Physician Limit on number of Physician VisitsVisits

1717 1717 1717 1717 1717 1717

Physician Visit and Co pay Physician Visit and Co pay RestrictionRestriction

77 77 77 88 77 77

*Data missing for one state*Data missing for one state

State Level ER Restrictive State Level ER Restrictive Policies Policies

Policy Level VariablesPolicy Level Variables 19971997 19981998 19991999 20002000**

20012001 20022002

Any Emergency Room Co payAny Emergency Room Co pay 44 44 44 44 44 44

Limit on number of Emergency Limit on number of Emergency Room VisitsRoom Visits

44 44 44 44 44 44

Emergency Room Co pay and Visit Emergency Room Co pay and Visit RestrictionRestriction

11 11 11 11 11 11

*Data missing for one state*Data missing for one state

State Level Inpatient State Level Inpatient Admission PoliciesAdmission Policies

Policy Level VariablesPolicy Level Variables 19971997 19981998 19991999 20002000**

20012001 20022002

Inpatient Admissions Co payInpatient Admissions Co pay 1414 1616 1616 1515 1515 1515

Inpatient Daily Co payInpatient Daily Co pay 55 55 55 55 55 55

Inpatient Stay LimitInpatient Stay Limit 1212 1212 1212 1212 1010 1010

*Data missing for one state*Data missing for one state

State Level Prescription Drug State Level Prescription Drug PoliciesPolicies

Policy Level VariablesPolicy Level Variables 19971997 19981998 19991999 2000*2000* 20012001 20022002

Prescription Co payPrescription Co pay 2929 2929 3030 3131 3030 3131

Limit on number of Limit on number of prescriptions per monthprescriptions per month

1111 1212 1212 1212 1010 1010

Both Rx Co pay and limitBoth Rx Co pay and limit 55 66 66 77 55 55

*Data missing for one state*Data missing for one state