Impact of Restrictive State Policies on Utilization and Expenditures in the Medicaid Program

1. Impact of Restrictive State Policies on Utilization and Expenditures in the Medicaid Program Roberto Vargas, MD, MPH1,2 Carole Gresenz,PhD2 Jessie Riposo, MS2 Jeannette Rogowski, PhD3 José Escarce, MD, PhD1,2 1.Division of General Internal Medicine and Health Services Research, David Geffen School of Medicine at UCLA 2.RAND Health 3.University of Medicine and Dentistry New Jersey, School of Public Health

2. Background • For state Medicaid programs, the Deficit Reduction Act eliminated • Need to offer all benefits to all enrollees • Requirement of states to get federal waivers before limiting benefits or imposing co-pays and cost sharing • Mandatory periods of public comment prior to implementing such changes

3. Restrictive Policies and Medicaid • Restrictive drug policies have been associated with lower rates of prescription filling and more intensive use of acute care, nursing homes and higher overall costs • Cost sharing and limits on physician visits in Medicaid have varying effects on physician visits rates but no significant impact on overall costs.

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

5. Data Sources • State Medicaid Summaries from 1997-2002 • Summaries of state plan benefits including scope of medical care (Limits on visits and services and co-pays) • The Medical Expenditure Panel Survey (MEPS), 1997-2002

6. Study Sample • Adults 18-64 with at least one full calendar year of data in MEPS • We excluded: • Patients who were pregnant • Had additional forms of insurance • Were enrolled inn Managed care or HMO’s

7. Study Design • Cross sectional, yearly analytic files of respondents • Multivariate regression models and simulations • Estimate the impact of state policy variation • Controlling for individual characteristics, health care market factors, and community contextual factors

8. Outcomes • Utilization: • Outpatient office-based physician visits • Outpatient office visits (non-physician and physician) • Emergency room visits • Inpatient acute care hospital admissions • Expenditures: • Prescription drug expenditures • Total healthcare expenditures excluding vision and dental services

9. Key Independent Variables: Medicaid Restrictive Policies • Any physician visit co-pay • Any emergency room visit co-pay • Any prescription drug co-pay • Inpatient admission co-pay for stay of greater than $21 • Any inpatient co-pay charged daily • Office-based physician visit limit • Less than or equal to three prescription limit per month

10. Regression Models: Office-based visits: Negative binomial model Any emergency room: Logit model Any inpatient night: Logit model Expenditures: selected Two-part models Simulations: We simulated values for the utilization and expenditures weighted for the MEPS sampling design Analysis

11. Descriptive Data:Individual Characteristics

12. Descriptive Data:Outcomes

13. Descriptive Data:Restrictive Medicaid Policies

14. Regression Results • Visit limit policies had no significant impact on visits that included non-physician care, emergency room visits, or inpatient hospital stays • Limiting prescriptions to three per month had no significant effect on any of our utilization or expenditure measures • Per day inpatient co-pay was not associated with hospitalization rates or expenditures

15. Regression Results • Co-pays for physician visits • Lower Any ER visit rate (20% compared to 25%; p<0.10) • Higher rates of inpatient hospitalization (18% compared to 13%; p<0.05) • Higher average total expenditures ($5,431 compared to $4,271; p<0.05)

16. Regression Results • Inpatient admission co-pays of greater than $21 • Fewer Admissions (9% compared to 15%; p<0.10) • ER visit co-pays • Lower total expenditures ($3,719 compared to $4,665; p<0.01)

17. Regression Results • Prescription drug co-pays: • Lower expenditures ($4,145 compared to $5,088; p<0.05) • Prescription drug co-pays: • Significantly lower average number of physician office-based visits (5.58 compared to 6.70; p<0.05)

18. Conclusions • Some co-pays were associated with lower expenditures and utilization • Visit limit policies, no significant impact on either outcomes of interest • Certain restrictive policies are associated with unintended consequences such as the association of physician visit co-pays with higher hospitalization rates and costs

19. Implications • Efforts to reduce costs through restrictive policies have varying effects on utilization and expenditures • As states consider greater use of restrictive policies there is a need to monitor the impact of restrictive policies for unintended consequences

20. Supplemental Slides

21. Results

22. States Level Restrictive Policies *Data missing for one state

23. State Level ER Restrictive Policies *Data missing for one state

24. State Level Inpatient Admission Policies *Data missing for one state

25. State Level Prescription Drug Policies *Data missing for one state