Medicaid: A Brief Overview and Case Studies on Access to Prescription Drugs

1. Medicaid: A Brief Overview and Case Studies on Access to Prescription Drugs Miriam Harmatz Florida Legal Services February 25, 2009

2. Medicaid Eligibility • Need categorical connection - Aged or disabled - Child or parent • Low income - Parent with child: income must be below $682 and assets less than $2,000 - Aged, blind or disabled: income must be below $657 assets less than $2,000

3. Medicaid Structure • Federal/State funding • State flexibility but federal law controls 42 U.S.C. § 1396 et seq. • Entitlement* • Complicated

4. Prescription Drug Benefit • $$$: huge budget item, with costs rising more quickly than other benefits • Prior authorization: tool for controlling costs required for certain brand name drugs and drugs not on PDL • Result: patients did not get their meds

5. Due Process for Prescription Denials • Hernandez et al. v. Medows, 209 F.R.D. 665 (S.D. Fla 2002.) • Medicaid statute 42 U.S.C. § 1396a(a)(3) • Goldberg v. Kelly • Medicaid regulations 42 C.F.R. § 431.200 et seq. • 14th Amendment

6. Importance of data, experts and settlement • Discovery regarding drug denials • Relationship to class and permanent injunction • Complexity of benefit: settlement best outcome

7. What drugs can be prescribed? • On label • Off label

8. Medically accepted indication • 42 U.S.C. § 1396r-8(k)(6) The term “medically accepted indication” means any use for a covered outpatient drug which is approved under the Federal Food, Drug, and Cosmetic Act [21 U.S.C.A. § 301 et. Seq.], or the use of which is supported by one or more citations included or approved for inclusion in any of the compendia described in subsection (g)(1)(b)(i) of this section. • Compendia • Applies to Medicaid & Medicare Part D

9. Edmonds et al. v. Levine • Off label marketing abuses • State response • Adverse impact on recipients

10. Structure of prescription benefit • Rebates • Very limited grounds for denial • Role of Compendia • Can PA

11. Medicaid Reform • Goal to block grant/privatize • Defined benefit/predictable spending • Plans determine amount, duration, and scope • PD limits on # • Lack of data regarding denials

12. Medicare Part D • Privatized model • Limited government role • Lack of denial data or info on price negotiations • Lack of uniform PDL structure

13. “Medically Needy” hurt by Part D • Categorical connection: Aged or disabled • over income or over assets; share of cost (SOC) like deductible • Before Part D those with high drug costs met SOC • Full Medicaid-including drug benefit/no co-payments • Full Medicare cost share benefit deductible, co-insurance, co payments • After Part D • Lost Medicaid • Huge Part D co-payments • No Medicare cost sharing benefit

14. Medicare Part D “Victim” • RB needs transplant • Income $1200/month, plus Medicare • Medically needy share of cost (SOC) $ 900 • Transplant drugs Part B: $ 700 • All other drugs covered by Part D • Cannot meet Share of cost; or afford cost of Part B drugs • Rejected for evaluation

15. Is health care right or responsibility? • If right- for everyone or just the “categorically connected” poor? • If right for everyone, cover every medically necessary service? • Government v. private sector?