2002 medicaid data for the state of alaska

1. 2002 Medicaid Data for the State of Alaska Muse & Associates 1775 I Street, NW, Suite 520 Washington, DC 20006 202-496-0200 www.muse-associates.com

3. Survey of Current State Medicaid Trends Survey Results: While state revenues have been falling for 5 quarters, Medicaid costs have continued to increase, leading to a shortfall in 40 states� Medicaid budgets 49 states are making Medicaid cost containment plans to: More controls on pharmacy costs Increased co-pays Eligibility restrictions Benefit reductions All states are seeking ways to increase federal share of Medicaid funding Outlook for 2004 is no better

4. Medicaid�s Problem Periods in the Past Early 80�s - Bottom falls out of economy, unemployed swell roles Solution: Throw people off roles and cut provider rates Early 90�s - Waxman mandatory groups kick in Solution: Put children and mothers in managed care Early 00�s � Medical costs increased overall, general rolls up as economy slows Solution: ??

5. Finding Solutions to the Medicaid Program Problems

6. What We Do Receive tapes submitted to the Centers for Medicare and Medicaid Services (CMS), deliver results and detailed backup in person in two weeks Goal is to identify what is driving the cost of the Medicaid program, and therefore, where are the greatest potential savings Outline the potential use of disease management and other policy options to improve patients� health outcomes and save money

8. Medicaid Recipients by Eligibility � National Totals

9. Alaska Medicaid Recipients by Eligibility Status

10. Medicaid Expenditures by Eligibility Status � National Totals

11. Alaska Medicaid Expenditures by Eligibility Status

12. Medicaid Expenditures by Type of Service - National Totals

13. Alaska Medicaid Expenditures by Type of Service*

14. Data from Alaska Data covers the period FFY2002-Q3 to FFY2003-Q2 There were no claims for capitated payments in Alaska DRGs are not used in Alaska Prescription Drug Claims data � only 83% of claims have valid NDC codes � rest of claims use �other� codes 30% of primary diagnosis codes are missing in �Other� claims For Long Term Care Claims �38% are for nursing facilities, and 62% are for inpatient mental health facilities (no ICF-MR in data)

15. Total Expenditures by 3 Digit Primary Diagnosis for All Datasets by Amount Paid

16. Big Three

17. Alaska Medicaid Fee for Service** 2002 Summary of Primary Diagnosis Data for Selected Conditions

18. Distribution of Alaska Costs for Those with Asthma, Diabetes, Heart Failure* Top 10% of recipients (934) cost $81.7 million (10.8% of all dollars) and averaged $87,447 per recipient (other states ranged from $31,956 to $56,345 per recipient) Inpatient hospital costs used 22% of the expenditures for this group

19. Examples of Possible Controllable FFS Expenditures for Asthma in Ambulatory Patients: 2002 $9.7 million in Inpatient Hospital expenditures $1.3 million in Outpatient Hospital (ER, MRI centers, etc.) expenditures

20. Relative Costs of Medicaid Recipients with Mental Illness and Selected Chronic Illnesses: Total Annual Expenditures Per Person Mental No Mental Illness Illness Diagnosis* Diagnosis Asthma $ 21,842 $ 7,934 Diabetes $ 34,121 $16,666 Heart Failure $ 50,236 $29,534

22. More on Distribution of Costs for Top 200 Medicaid Recipients Top 200 recipients cost $50.1 million and averaged $250,512 per recipient (other states ranged from $121,921 to $344,843) Inpatient hospital expenditures are 37% of this group�s cost in Alaska

23. Alaska - Top 10 of the Larger Hospitals with the Highest Proportion of Septicemia or Complications - 2002

24. Expenditures for Persons with 9 or More Prescriptions in 180 Days* (this slide is missing 17% of prescription drug claims) 12,213 total persons with $316 million in total expenditures $64 million in prescription drug expenditures 11,343 non-institutionalized persons used $258 million of total expenditures Represent 16% of all ambulatory patients receiving prescription drugs These patients used 34% of total expenditures for all ambulatory patients

25. Expenditures for Persons with 20 or More Prescriptions in 180 Days* (this slide is missing 17% of prescription drug claims) 2,098 total persons with $81.8 million in total expenditures $21.5 million in prescription drug expenditures 1,923 non-institutionalized persons in this group used a total of $71.4 million or 9% of total Alaska Medicaid expenditures These patients represent 2.7% of all ambulatory patients receiving prescription drugs (other states range from 0.3% to 5.2%)

26. Florida Intensified Benefit Management (IBM) Program for Persons with 20 or more Prescriptions in 180 days

27. Alaska - 2002 Prescription Drug Expenditures by American Hospital Formulary Service (AHFS) Classes by Amount Paid

28. 2002 Prescription Drug Expenditures(in millions of dollars) Group Dollars Percent Aged $ 16.2 17.1% Blind/Disabled $ 53.4 56.3%* Children $ 12.8 13.5% Other Adults $ 11.7 12.4% Unknown $ 0.7 0.7% Total $ 94.7 100.0%

30. The Institutionalized Population

31. 2002 Expenditures for Long Term Care Recipients 930 Residents (63.5% aged) Cost: Type of Provider Millions Percent Nursing Homes $ 61.8 81.0% Inpatient Hospital $ 3.8 5.0% Prescription Drugs $ 4.3 5.6% Physicians $ 2.7 3.5% Clinic $ 0.7 0.9% Home Health Agency $ 0.2 0.2% Hospital Outpatient $ 0.7 0.9% Other $ 2.2 2.9% Total $ 76.2 100%

32. Long Term Care (LTC) Facilities

33. 30 Days

34. Indicators of Nursing Homes with Potential Problems Indicators developed in technical consultation with: American Medical Directors Association American Health Care Association Long Term Care Pharmacy Alliances

35. General Indicators of Nursing Homes with Potential Problems What we look for: High percentage of residents taking 20 or more prescriptions at the same time High percentage of residents taking one or more of 19 modified Beer�s list medications (always,rarely)* *Zhan, C, et.al., JAMA 286, Dec. 12, 2001, p. 2823-9.

36. Indicators of Alaska Nursing Homes with Potential Problems Of the 28 total homes 7 homes had residents taking 20 or more drugs at the same time 4 homes had more than 25% of residents taking Beer�s list medications 2 homes had both indicators

37. 2002 Expenditures for Inpatient Mental Health Care Recipients 1,332 Residents Cost: Type of Provider Millions Percent MH Facilities $ 51.4 68.5% Inpatient Hospital $ 2.7 3.6% Prescription Drugs $ 2.5 3.3% Physicians $ 3.7 4.9% Clinic $ 8.7 11.6% Hospital Outpatient $ 0.8 1.0% Other $ 5.3 7.1% Total $ 75.0 100%

38. Research on Inpatient Mental Health Care Facilities

40. Overview of Analysis Mental health related protocols from Comprehensive NeuroScience, Inc. were applied to State XYZ�s data Focus on medications used to treat mental health to identify mental health patients Based on published clinical literature

41. 2002 Baseline Information 114,590 fee-for-service Medicaid recipients during 2002 19,484 patients (17% of all fee-for-service patients) received a prescription with a mental health indication during 2002 3,985 patients (20.5% of those receiving mental health medication) received a prescription for an atypical product

42. Key Finding 1 Potential Ineffective Dosage There were 929 (4.8% of those receiving mental health medication) patients that were prescribed an atypical at an ineffective strength. This represents 23.3% of patients who received an atypical medication. Industry experts indicate that this wastes money and is not helpful to treating recipients.

43. Key Finding 2Potential Discontinued Usage There were 1,450 patients (7.4%) with severe mental illness that did not refill their prescription for their atypical anti-psychotic. This represents 36.4% of patients who received an atypical medication. Significant concern with respect to future hospitalizations, ER visits, etc. for these patients.

44. Key Finding 3Potential Overlapping Medication There were 2,178 patients on 3 or more overlapping behavioral medications during 2002. This represents approximately 11.2% of recipients who received a prescription drug with a mental health indication.

45. Key Finding 3 Potential Overlapping Medication (cont�d) 222 patients (1.1% of those receiving mental health medication) were concurrently on more than one SSRI during the year. Patients should not generally be on more than 1 SSRI at a time About 6.5% of patients taking atypicals received two or more of this type of drug at the same time during the year. Patients should not generally be on more than 1 atypical at the same time

46. Third Generation Investigative Tools Applied Correct Coding Initiative(CCI) developed by CMS to database Two Areas Compound Code Violations Incompatible Code Violations

47. Examples of Compound Code Violations Upper GI Endoscopy, Biopsy CPT 43239, Upper GI Endoscopy, Biopsy and CPT 00740, Anesthesia, Upper GI Visualize should not be billed separately and should be bundled as part of the endoscopy procedure. Approximately $30,584 was paid for these codes in 2002 . Hundreds of pairs of codes In Alaska possible coding violations were 0.07% of total expenditures for physician services

48. Mutually Exclusive Code Violations The CCI identifies CPT codes that should not be billed together on the same day. For example, CPT 74150, cat scan of the abdomen, CPTs 74160 and 74170, contrast cat scans of abdomen cannot be billed together on the same day. However, $12,511 was paid for this type of violation during 2002 in Alaska. In Alaska possible mutually exclusive code violations were 0.15% of total expenditures for physician services

49. Analysis of Federal Medicare Prescription Drug Benefit Medicare is the primary payer to Medicaid Modeled our analysis of an Rx benefit on the Thomas bill Total Alaska prescription drug expenditures: $94.7 million Approximately 41% of Alaska prescription drug expenditures are for dual eligibles ($38.5 million)

50. Summary of Possible Recommendations Case management of high-cost recipients Special case management of high-cost mental health recipients Persons with 20 or more prescriptions in 180 days should be examined Explore reasons for relatively high per capita for institutionalized patients

51. Other Options We are running other options for Alaska Other options requested by the state will be produced