Date: Tuesday, March 5, 1996
FOR IMMEDIATE RELEASE
Contact: HCFA Press Office (202) 690-6145

HCFA RELEASES REPORT ON MEDICAID DRUG USE DEMONSTRATION PROJECTS

The Health Care Financing Administration has released preliminary findings from two studies on Medicaid drug utilization. One study is a pilot project that, for the first time, pays pharmacists in the state of Washington for their advice to Medicaid beneficiaries on using prescription drugs.

The other study is a pilot project in Iowa that monitors proper use of prescription drugs paid for by Medicaid.

Both studies are contained in a report to Congress mandated by the Omnibus Budget Reconciliation Act of 1990. Under this law, state Medicaid agencies must have drug use review programs to ensure that prescriptions are appropriate, medically necessary and unlikely to produce adverse effects.

Before dispensing prescription drugs, pharmacists must counsel Medicaid patients on the proper use of medicines. The pharmacists also must identify drugs that may cause harm by interacting with other drugs being taken by the patient, and must try to identify patient allergies and reactions to drugs.

The 1990 law also calls for HCFA, the HHS agency that oversees the Medicaid and Medicare programs, to set up demonstration projects to monitor the effectiveness of drug utilization review and payment to pharmacists for counseling.

In March 1994, HCFA submitted an initial report to Congress on the status of the demonstrations being conducted in Washington state and Iowa. This second report provides an update on the demonstrations:

- Washington state is testing the effects of paying for pharmacists' counseling services. The demonstration, which started in February 1994, pays 184 pharmacies across the state for counseling Medicaid beneficiaries. Selected pharmacies were assigned to treatment and control groups. The treatment pharmacies receive payment for counseling services (at $4 per encounter of six minutes and $6 per encounter over six minutes). - Iowa is testing an on-line system of drug use review before a prescription is filled. A three- year demonstration, which began in June 1994, has participation by 223 pharmacies serving 49 Iowa counties. The system is expected to provide all pharmacists with rapid access to information in centrally located files on patient prescription histories, regardless of where the drug was purchased. Iowa also is screening for early refills for all drugs and collecting information on the counseling services provided in the pharmacies.

An independent evaluation of the demonstrations will determine if prescribing practices improved; reductions in health care utilization and expenditures associated with prescription problems occurred; reductions in adverse outcomes occurred; and whether these enhancements are cost effective. A final report is due in March 1998.