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STATISTICAL COMPENDIUM: MEDICAID PHARMACY BENEFIT USE AND REIMBURSEMENT IN 1999,

Prepared for the nation, 48 states, and the District of Columbia Based on Medicaid Analytic Extract (MAX) 1999 Files

INTRODUCTION

The Centers for Medicare & Medicaid Services (CMS) is pleased to make available for the first time the attached Statistical Compendium: Medicaid Pharmacy Benefit Use and Reimbursement in 1999 (hereafter, “the Compendium”), which provides detailed state-by-state and national data on the use of and reimbursement for prescription drugs in Medicaid. These data, prepared from Medicaid Analytic eXtract (MAX) files for calendar year 1999 by Mathematica Policy Research, Inc. under contract with CMS, show use and reimbursement by beneficiary demographic characteristics (age, sex, and race), basis of eligibility (children, adults, disabled, and aged), and Medicare-Medicaid dual eligible status. There are detailed tables for all Medicaid beneficiaries combined, and separate tables for dual eligibles and for full-year residents of nursing facilities. The tables show drug use and reimbursement by brand status (patented brand name, off-patent brand name, and generic), therapeutic category (cardiovascular agents, central nervous system drugs, etc.) and drug group (anti-psychotics, anti-depressants, ulcer drugs, etc.). This is the first time that it has been possible to produce these data, because 1999 was the first year that all states were required to submit person-level data under the Medicaid Statistical Information System (MSIS). MAX is a research extract from the MSIS data.

Data in the attached tables do not represent more recent statistics from MSIS data that are being used for purposes of implementing the provisions of Section 103 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173) relating to the Federal assumption of Medicaid prescription drug costs for dually eligible individuals and reductions in Federal Medicaid payments to states.

Inclusions

• The data tables provide statistics for all Medicaid beneficiaries, including dual eligibles with Medicare and Medicaid coverage, who had Medicaid fee-for-service (FFS) Medicaid pharmacy benefit coverage for at least one month during calendar year 1999.
• The data also include Medicaid beneficiaries who resided in nursing facilities throughout their Medicaid enrollment in 1999.

• There are national tables and state-level tables for 48 states and the District of Columbia.
• The Medicaid prescription drug reimbursement amounts, as reported by states in MSIS, are gross amounts prior to the receipt of rebates from prescription drug manufacturers.

• Beneficiaries who were in capitated managed care arrangements for the entire year are excluded.
• For beneficiaries who were in capitated managed care for part of the year and FFS for part of the year, only their FFS months are included.
• Part-year nursing facility residents are not included.
• State tables for Arizona and Tennessee were not prepared because reporting of prescription drug use and reimbursement under the capitated managed care plans that predominate in those states is incomplete and inconsistent in the 1999 MSIS and MAX files.

Exhibit 1 (.pdf 12 KB) shows counts of the included and excluded groups. In the detailed state and national tables, the beneficiaries who are included are generally referred to as the “study population.”

Use and Reimbursement “Per Benefit Month”

Most of the tables in the Compendium show service use of and reimbursement for Medicaid prescription drugs “per benefit month.” This is the average amount of use and reimbursement per month for all months during the year in which beneficiaries had FFS pharmacy benefit coverage, whether or not they received a prescription in those months. This is essentially the same approach that actuaries use to calculate “per member per month” estimates in capitated managed care settings.

Exceptions. In Tables 3 and 12 there are estimates of use and reimbursement “per beneficiary.” This includes all use and reimbursement during the year for the number of months of coverage. Thus, some beneficiaries may have had only one month of coverage, while others were covered for twelve months. Similarly, Supplemental Tables 1 and 1A-1D that show mean annual reimbursement for dual eligibles and annual reimbursement per-dual-eligible-beneficiary in $500 increments ($0, $1 to $500, $501 to $1,000, etc.) include all the dual eligible beneficiaries for the number of months of Medicaid pharmacy coverage in 1999. Since most dual eligible beneficiaries are continuously enrolled, the average number of enrolled months for dual eligibles in 1999 was 10.4 months at the national level. As discussed in more detail below in the “Supplemental $500 Increment Tables for Dual Eligibles” subsection of the “Overview of Major Table Features,” the data in these supplemental tables can be combined with data in Table 11 to calculate monthly or annualized 12-month per-beneficiary measures of use and reimbursement.

OVERVIEW OF BENEFICIARY CHARACTERISTICS AND SOME ILLUSTRATIVE MEASURES

Exhibit 2 (.pdf 17 KB) shows the distribution of Medicaid beneficiary characteristics in 1999 for those beneficiaries included in the study population.

Exhibit 3 (.pdf 12 KB) shows some illustrative measures of pharmacy benefit use and reimbursement.

There is a list of tables at the beginning of each file for the United States, and each individual state. In each of the “main” set of tables (named “STATENAME_main”), Table 1 provides an overview of the beneficiary selection criteria for the study population that is featured in the tables. Then, there are 11 tables that cover all Medicaid beneficiaries in the study population (Tables 2-10, and Appendix Tables A.1 and A.2), followed by 10 tables that focus just on dual eligible beneficiaries (Tables 11-18, and Appendix Tables A.3 and A.4). For the nation, these tables are followed by eight “national comparison tables” (Tables N.1a and N.1b, and N.2 through N.7) that show state-by-state comparisons using a variety of key measures. Finally, there are five “supplemental” tables as a separate file (named “STATENAME_supp”) that show annual pharmacy reimbursement in $500 increments for all dual eligibles, for disabled duals under age 65, all duals age 65 and over, and duals ages 65-74, 75-84, and 85 and over.

Go to the location of the tables

Brand Name vs. Generic Comparisons

Comparisons of use and reimbursement for patented brand name, off-patent brand name, and generic drugs are in Tables 5, 6, 9, 14, 15, 18 for the United States and individual states. National comparison tables (Tables N.2 and N.5) show data for all 48 states and the District of Columbia.

Nursing Facility Comparisons

There are several tables that show pharmacy benefit use and reimbursement for full-year residents of nursing facilities.

• Tables 8, 9, and 10 show this for all Medicaid beneficiaries, including dual eligibles.
• Tables 17 and 18 show the same comparisons as those in Tables 8 and 9, but restricted just to dual eligibles.
• Table 10 shows use and reimbursement for the top 10 drug groups for all full-year nursing facility residents, including dual eligibles. As discussed below, the top 10 drug groups differ from state to state.

There are 3 tables that show pharmacy use and reimbursement among 18 broad therapeutic categories:

• Tables 6 and 9 present these statistics for all beneficiaries combined, and Table 15 for dual eligibles.
• Table 9 focuses on drug use in nursing facilities for full-year Medicaid residents, including dual eligibles.

Top 10 Drug Groups

A large number of tables show use and reimbursement in the top ten drug groups, which are narrower than therapeutic categories. The top ten groups differ by state, as shown in Tables N.4 and N.7 in the national comparison table section, so that, for example, the top drug group in one state might rank third in another.

• The top 10 drug groups for all Medicaid beneficiaries appear in Tables 7 and 7A through 7D.
• The top 10 drug groups for full-year nursing facility residents appear in Tables 10 and 10A through 10D.
• Tables 16 and 16A through 16D contain information that is comparable to that in Tables 7 and 7A through 7D, but limited just to dual eligibles.

National Comparison Tables

• The national comparison tables show use and reimbursement for 48 states and the District of Columbia, using measures that are designed to facilitate comparisons and highlight state-by-state differences. Examples of these measures include:
• Total reimbursement per benefit month, and percentage of total prescriptions that are for patented brand name, off-patent brand name, and generic drugs (Table N.2)
• Share of benefit months, reimbursement per benefit month, and share of total Medicaid pharmacy reimbursement by aged, disabled, adult, and child eligibility categories for all beneficiaries (Table N.3)
• Top 10 drug groups in each state for all beneficiaries (Table N.4)
• Use and cost per benefit month, brand name vs. generic, and nursing facility use by dual eligibles (Table N.5)
• Share of benefit months, reimbursement per benefit month, and share of total Medicaid pharmacy reimbursement by aged, disabled, adult, and child eligibility categories for dual eligible beneficiaries (Table N.6)
• Top 10 drug groups in each state for dual eligibles (Table N.7)

• annual pharmacy reimbursement per dual eligible beneficiary in $500 increments,
• the number and percent of dual eligible beneficiaries in each increment, and
• the amount and percent of total Medicaid pharmacy reimbursement in each increment.

There are separate tables for all dual eligibles, disabled duals under age 65, and duals ages 65 to 74, 75 to 84, and 85 and above. The tables also show:

• the total number of dual eligibles in each of these age categories,
• the total Medicaid pharmacy reimbursement, and
• the annual mean reimbursement per beneficiary in the category.

There are separate tables for the nation as a whole, and for 48 states and the District of Columbia.

The tables include all dual eligibles who had Medicaid FFS pharmacy benefit coverage during some or all months of Medicaid enrollment in 1999. The average number of months of enrollment per beneficiary nationally for duals of all ages was 10.4 months. The average may vary by beneficiary characteristics and by state. These averages by state and by beneficiary characteristics can be calculated from the information shown in Table 11 in the main table set for each state by dividing the number of benefit months by the number of beneficiaries. Users can then use the average number of benefit months to calculate the amount of reimbursement per benefit month by dividing mean annual reimbursement per beneficiary by the average number of months enrolled. Annualized 12-month estimates can then be made by multiplying the amount per benefit month by 12.

Illustrative example. In Table 11 for the United States as a whole, for example, there are 5,309,969 dual eligible beneficiaries and 55,277,615 dual eligible benefit months, so the average dual eligible is enrolled for 10.41 months (55,277,615/5,309,969 = 10.41). There are 1,358,163 dual eligibles age 65-74 in Table 11, and 14,355,449 benefit months, so the average enrollment for this age group of duals is 10.57 months. In Supplemental Table 1B, the mean annual pharmacy reimbursement for dual eligible beneficiaries age 65-74 is $1,447. Dividing that number by 10.57 months produces an average monthly reimbursement of $137, and an annualized 12-month reimbursement of $1,644 (12 x $137 = $1,644).