How Much Does Medication Nonadherence Cost the Medicare Fee-for-Service Program?

BACKGROUND: Medication adherence is associated with lower health care utilization and savings in specific patient populations; however, few empirical estimates exist at the population level. OBJECTIVE: The main objective of this study was to apply a data-driven approach to obtain population-level estimates of the impact of medication nonadherence among Medicare beneficiaries with chronic conditions. RESEARCH DESIGN: Medicare fee-for-service (FFS) claims data were used to calculate the prevalence of medication nonadherence among individuals with diabetes, heart failure, hypertension, and hyperlipidemia. Per person estimates of avoidable health care utilization and spending associated with medication adherence, adjusted for healthy adherer effects, from prior literature were applied to the number of nonadherent Medicare beneficiaries. SUBJECTS: A 20% random sample of community-dwelling, continuously enrolled Medicare FFS beneficiaries aged 65 years or older with Part D (N=14,657,735) in 2013. MEASURES: Avoidable health care costs and hospital use from medication nonadherence. RESULTS: Medication nonadherence for diabetes, heart failure, hyperlipidemia, and hypertension resulted in billions of Medicare FFS expenditures, millions in hospital days, and thousands of emergency department visits that could have been avoided. If the 25% of beneficiaries with hypertension who were nonadherent became adherent, Medicare could save $13.7 billion annually, with over 100,000 emergency department visits and 7 million inpatient hospital days that could be averted. CONCLUSION: Medication nonadherence places a large resource burden on the Medicare FFS program. Study results provide actionable information for policymakers considering programs to manage chronic conditions. Caution should be used in summing estimates across disease groups, assuming all nonadherent beneficiaries could become adherent, and applying estimates beyond the Medicare FFS population.

Impact of formulary restrictions on medication use and costs.

OBJECTIVES: To evaluate the effects of formulary restrictions on utilization and costs of oral hypoglycemic agents (OHAs), statins, and renin-angiotensin system (RAS) antagonists among low-income subsidy (LIS) recipients in Medicare Part D plans. STUDY DESIGN: We analyzed a 5% sample of 2012 Medicare data from the Chronic Conditions Data Warehouse together with a customized dataset capturing beneficiaries' histories of plan assignment. METHODS: We constructed 3 nonexclusive study cohorts comprising of users of OHAs, statins, and RAS antagonists. Eligible study subjects were LIS recipients randomized to benchmark plans. Formulary restrictions of interest were noncoverage, prior authorization, and step therapy. Study outcomes included generic dispensing rate (GDR), mean cost per prescription fill, and medication adherence based on proportion of days covered (PDC). Random intercept regression models were performed to estimate the effects of formulary restrictions on the study outcomes by drug class. RESULTS: After covariate adjustment, beneficiaries who were subject to formulary restrictions on brand name pioglitazone and single-source brand name dipeptidyl peptidase-4 inhibitors (saxagliptin, sitagliptin, and sitagliptin-metformin) had a GDR 3 percentage points higher and a cost per prescription fill $10.8 less, but similar PDC compared with those who faced no restrictions. Restricting access to brand name atorvastatin and single-source brand name statins (rosuvastatin and ezetimibe-simvastatin) was associated with a GDR 14.9 percentage points higher and a cost per prescription fill $29.6 less, but with no impact on PDC. Restricting use of single-source brand name RAS antagonists (olmesartan, valsartan, and valsartan-hydrochlorothiazide) was associated with a GDR 15.0 percentage points higher, a cost per prescription fill $27.2 less, and a PDC 1.3 percentage points lower. CONCLUSIONS: Placing formulary restrictions on brand name drugs shifts utilization toward generic drugs, lowers the overall cost per prescription fill, and has minimal impact on overall adherence for OHAs, statins, and RAS antagonists among LIS recipients.

Evaluating the Effects of Pioneer Accountable Care Organizations on Medicare Part D Drug Spending and Utilization.

BACKGROUND: The improvement of medication use is a critical mechanism that accountable care organization (ACO) could use to save overall costs. Currently pharmaceutical spending is not part of the calculation for ACO-shared savings and risks. Thus, ACO providers may have strong incentives to prescribe more medications hoping to avoid expensive downstream medical costs. METHODS: We designed a quasinatural experiment study to evaluate the effects of Pioneer ACOs on Medicare Part D spending and utilization. Medicare fee-for-service beneficiaries with Part D drug coverage who were aligned to a Pioneer ACO were compared with a random 5% sample of non-ACO beneficiaries. Outcomes included changes in Part D spending, number of prescription fills, percent of brand medications, and total Part A and B medical spending. We utilized a generalized linear model with a difference-in-differences approach to estimate 2011-2012 changes in these outcomes among beneficiaries aligned with Pioneer ACOs, adjusting for all beneficiary-level demographics, income and insurance status, clinical characteristics, and regional fixed effects. RESULTS: Being in an ACO did not significantly affect Part D spending (-$23.52; P=0.19), total prescriptions filled (-0.12; P=0.27), and the percent of claims for brand-name drugs (0.06%; P=0.23). The ACO group was associated with savings in Parts A and B spending of $345 (P<0.0001) per person per year. CONCLUSIONS: We found that beneficiaries aligned to Pioneer ACOs were not associated with changes in pharmaceutical spending and use, but were associated with savings in Parts A and B spending in 2012.

Increased observation services in Medicare beneficiaries with chest pain.

INTRODUCTION: We examined trends in the use of observation services and the relationship between index service type (observation services, emergency department [ED] visits, inpatient stays) and both clinical outcomes and Medicare payments. METHODS: We created a yearly cohort panel of Medicare beneficiaries with chest pain. We evaluate the relationships between index service type and 30-day clinical outcomes using a multinomial logit model and between index service type and Medicare payments using generalized linear models. RESULTS: In 2009, 24% of patients with chest pain received observation services; this rose to 29% in 2011. Conversely, 20% were treated as hospital inpatients in 2009; this fell to 16% in 2011. In the adjusted analysis, the risk of 30-day return to the hospital was 7% less (95% confidence interval, 5%-8%) for those receiving observation services as compared with inpatients. Average Medicare payments ranged from $3032 for beneficiaries initially treated in the ED to $3885 for those initially treated in observation to $6545 for those initially treated as inpatients. DISCUSSION: Patients treated in observation are less likely than those treated in the ED or as inpatients to have an adverse event within 30 days. Adjusted Medicare payments, including the index stay and the subsequent 30 days, were substantially less for those treated in observation as compared with those treated as inpatients, but more than for those treated and released from the ED. Higher rates of observation service use do not appear to be negatively affecting patient outcomes and may lower costs relative to inpatient treatment.

Choice Inconsistencies among the Elderly: Evidence from Plan Choice in the Medicare Part D Program: Comment.

Consumers' enrollment decisions in Medicare Part D can be explained by Abaluck and Gruber's (2011) model of utility maximization with psychological biases or by a neoclassical version of their model that precludes such biases. We evaluate these competing hypotheses by applying nonparametric tests of utility maximization and model validation tests to administrative data. We find that 79 percent of enrollment decisions from 2006 to 2010 satisfied basic axioms of consumer theory under the assumption of full information. The validation tests provide evidence against widespread psychological biases. In particular, we find that precluding psychological biases improves the structural model's out-of-sample predictions for consumer behavior.

Observation encounters and subsequent nursing facility stays.

BACKGROUND: Medicare coverage of skilled nursing facility (SNF) care requires that beneficiaries have a 3-night inpatient stay in the prior 30 days to be eligible. Time spent by beneficiaries receiving hospital-based observation services does not count toward this requirement. OBJECTIVES: To examine the frequency of Medicare beneficiary discharge from hospital-based observation services to SNFs and its impact on Medicare coverage. STUDY DESIGN: Retrospective cohort study. RESULTS: In 2010, 195,068 community-dwelling beneficiaries received hospital-based observation services. Beneficiaries were overwhelmingly (96.5%) discharged back to the community without home health services. Only 1.2% (2319) were discharged to non-covered SNFs, while 0.6% (1196) were discharged to covered SNFs. Patients discharged to SNFs experienced longer lengths of stay (LOS) than those discharged back to the community (34.9 hours vs 25.5 hours; P<.01). Approximately one-fourth of beneficiaries discharged to SNFs had an observation LOS of 48 hours or more. CONCLUSIONS: While only a small minority of community-dwelling Medicare beneficiaries who received hospital-based observation services in 2010 were discharged to an SNF not covered by Medicare, the implications for these patients and the associated costs deserve attention. These findings have important implications for Medicare's observation service and 2-midnight policies.

Paying Attention or Paying Too Much in Medicare Part D.

We study whether people became less likely to switch Medicare prescription drug plans (PDPs) due to more options and more time in Part D. Panel data for a random 20 percent sample of enrollees from 2006--2010 show that 50 percent were not in their original PDPs by 2010. Individuals switched PDPs in response to higher costs of their status quo plans, saving them money. Contrary to choice overload, larger choice sets increased switching unless the additional plans were relatively expensive. Neither switching overall nor responsiveness to costs declined over time, and above-minimum spending in 2010 remained below the 2006 and 2007 levels.

Utilization and costs of medications associated with CKD mineral and bone disorder in dialysis patients enrolled in Medicare Part D.

BACKGROUND: Information is limited regarding utilization patterns and costs for chronic kidney disease-mineral and bone disorder (CKD-MBD) medications in Medicare Part D-enrolled dialysis patients. STUDY DESIGN: Retrospective cohort study. SETTING & PARTICIPANTS: Annual cohorts of dialysis patients, 2007-2010. PREDICTORS: Cohort year, low-income subsidy status, and dialysis provider. OUTCOMES: Utilization and costs of prescription phosphate binders, oral and intravenous vitamin D analogues, and cinacalcet. MEASUREMENTS: Using logistic regression, we calculated adjusted odds of medication use for low-income subsidy versus non-low-income subsidy patients and for patients from various dialysis organizations, and we report per-member-per-month and average out-of-pocket costs. RESULTS: Phosphate binders (∼83%) and intravenous vitamin D (77.5%-79.3%) were the most commonly used CKD-MBD medications in 2007 through 2010. The adjusted odds of prescription phosphate-binder, intravenous vitamin D, and cinacalcet use were significantly higher for low-income subsidy than for non-low-income subsidy patients. Total Part D versus CKD-MBD Part D medication costs increased 22% versus 36% from 2007 to 2010. For Part D-enrolled dialysis patients, CKD-MBD medications represented ∼50% of overall net Part D costs in 2010. LIMITATIONS: Inability to describe utilization and costs of calcium carbonate, an over-the-counter agent not covered under Medicare Part D; inability to reliably identify prescriptions filled through a non-Part D reimbursement or payment mechanism; findings may not apply to dialysis patients without Medicare Part D benefits or with Medicare Advantage plans, or to pediatric dialysis patients; could identify only prescription drugs dispensed in the outpatient setting; inability to adjust for MBD laboratory values. CONCLUSIONS: Part D net costs for CKD-MBD medications increased at a faster rate than costs for all Part D medications in dialysis patients despite relatively stable use within medication classes. In a bundled environment, there may be incentives to shift to generic phosphate binders and reduce cinacalcet use.

Sources of drug coverage among Medicare beneficiaries with ESRD.

Despite extensive use of prescription medications in ESRD, relatively little is known about the participation of Medicare ESRD beneficiaries in the Part D program. Here, we quantitated the sources of drug coverage among ESRD beneficiaries and explored the Part D plan preferences of ESRD beneficiaries with regard to deductibles, coverage gaps, and monthly premiums. We obtained data on beneficiary sources of creditable coverage, characteristics of Part D plans, demographics, and residence from the Centers for Medicare and Medicaid Chronic Condition Data Warehouse and identified beneficiaries with ESRD from the US Renal Data System. We found that a substantial proportion (17.0%) of ESRD beneficiaries lacked a known source of creditable drug coverage in 2007 and 64.3% were enrolled in Part D. Of those enrolled, 72% received the Medicare Part D low-income subsidy. ESRD beneficiaries who enrolled in standalone Part D plans without the assistance of the low-income subsidy tended to prefer more comprehensive coverage options. In conclusion, more outreach is needed to ensure that beneficiaries who lack coverage obtain the coverage they need and that ESRD beneficiaries join the best plans for managing their disease and accompanying comorbid conditions.

Utilization and costs of cardiovascular disease medications in dialysis patients in Medicare Part D.

BACKGROUND: Cardiovascular disease (CVD) is a major source of mortality and morbidity in dialysis patients. Population-level descriptions of CVD medication use are lacking in this population. STUDY DESIGN: Retrospective cohort study. SETTING & PARTICIPANTS: Adult dialysis patients in the United States, alive on December 31, 2006, with Medicare Parts A and B and enrollment in Medicare Part D continuously in 2007. PREDICTOR: CVDs and demographic characteristics. OUTCOME: ≥1 prescription fill during follow-up (2007). MEASUREMENTS: Average out-of-pocket costs per user per month and average total drug costs per member per month were calculated. RESULTS: Of 225,635 dialysis patients who met inclusion criteria during the entry period, 70% (n = 158,702) had continuous Part D coverage during follow-up. Of these, 76% received the low-income subsidy. ß-Blockers were the most commonly used CVD medication (64%), followed by renin-angiotensin system inhibitors (52%), calcium channel blockers (51%), lipid-lowering agents (44%), and α-agonists (23%). Use varied by demographics, geographic region, and low-income subsidy status. For CVD medications, mean out-of-pocket costs per user per month were $3.44 and $49.59 and mean total costs per member per month were $124.02 and $110.32 for patients with and without the low-income subsidy, respectively. LIMITATIONS: Information was available for only filled prescriptions under the Part D benefit; information for clinical contraindications was lacking, information for over-the-counter medications was unavailable, and medication adherence and persistence were not examined. CONCLUSIONS: Most Medicare dialysis patients in 2007 were enrolled in Part D, and most enrollees received the low-income subsidy. ß-Blockers were the most used CVD medication. Total costs of CVD medications were modestly higher for low-income subsidy patients, but out-of-pocket costs were much higher for patients not receiving the subsidy. Further study is warranted to delineate sources of variation in the use and costs of CVD medications across subgroups.

Full costs of dispensing and administering fluorouracil chemotherapy for outpatients: A microcosting study.

BACKGROUND: Although full costs (including direct and indirect costs) that incurred during the process of chemotherapy administration should be measured, many studies estimate only direct labor and medication costs associated with various chemotherapy delivery systems. OBJECTIVES: To estimate the total costs for dispensing and administration of fluorouracil when administered with leucovorin, by intravenous infusion or bolus, using a microcosting approach from the perspective of a provider or health system. METHODS: A time-and-motion study was used to measure the time spent by (1) pharmacy staff in the handling, admixture, and dispensing of fluorouracil and (2) patients in the clinic. The study was performed at The Cancer Institute of New Jersey for an 8-month period. Costs of dispensing and administering fluorouracil were calculated per patient visit on the basis of resources used in the processing of fluorouracil and time spent by pharmacy staff and patient. All costs were standardized to 2005 dollars. RESULTS: A total of 275 observations were made, and 74 (26.9%) of these were associated with fluorouracil-based chemotherapy. Pharmacy staff spent an average of 11 minutes for bolus fluorouracil with leucovorin infusion (fluorouracil/LCV-IV) and 8 minutes for bolus fluorouracil with bolus leucovorin (fluorouracil/LCV-B). Patients who received fluorouracil/LCV-IV spent an average of 203 minutes in the clinic, whereas patients who received fluorouracil/LCV-B spent 110 minutes. The average cost of administering fluorouracil/LCV-IV was $933, which comprised drug costs ($279), dispensing costs ($189), and administration costs ($465). The average cost of fluorouracil/LCV-B was $474, which comprised drug costs ($65), dispensing costs ($141), and administration costs ($268). CONCLUSIONS: This is the first study to formally demonstrate the high cost of administering the injectable form of fluorouracil chemotherapy with leucovorin, despite relatively low drug acquisition cost. Therefore, reimbursement rates for fluorouracil should be calculated in such a way that covers all costs, including overhead costs for the department.

Predictive modeling of total healthcare costs using pharmacy claims data: a comparison of alternative econometric cost modeling techniques.

OBJECTIVE: We sought to evaluate several statistical modeling approaches in predicting prospective total annual health costs (medical plus pharmacy) of health plan participants using Pharmacy Health Dimensions (PHD), a pharmacy claims-based risk index. METHODS: We undertook a 2-year (baseline year/follow-up year) longitudinal analysis of integrated medical and pharmacy claims. Included were plan participants younger than 65 years of age with continuous medical and pharmacy coverage (n = 344,832). PHD drug categories, age, gender, and pharmacy costs were derived across the baseline year. Annual total health costs were calculated for each plan participant in follow-up year. Models examined included ordinary least squares (OLS) regression, log-transformed OLS regression with smearing estimator, and 3 two-part models using OLS regression, log-OLS regression with smearing estimator, and generalized linear modeling (GLM), respectively. A 10% random sample was withheld for model validation, which was assessed via adjusted r, mean absolute prediction error, specificity, and positive predictive value. RESULTS: Most PHD drug categories were significant independent predictors of total costs. Among models tested, the OLS model had the lowest mean absolute prediction error and highest adjusted r. The log-OLS and 2-part log-OLS models did not predict costs accurately as the result of issues of log-scale heteroscedasticity. The 2-part model using GLM had lower adjusted r but similar performance in other assessment measures compared with the OLS or 2-part OLS models. CONCLUSION: The PHD system derived solely from pharmacy claims data can be used to predict future total health costs. Using PHD with a simple OLS model may provide similar predictive accuracy in comparison to more advanced econometric models.

Risk assessment of hemorrhagic complications associated with nonsteroidal antiinflammatory medications in ambulatory pain clinic patients undergoing epidural steroid injection.

UNLABELLED: We prospectively studied 1035 individuals undergoing 1214 epidural steroid injections to determine the risk of hemorrhagic complications. A history of bruising or bleeding was present in 176 (15%) patients. A platelet count was assessed in 77 patients before the epidural steroid injection; none was less than 100 x 10(9)/L. Nonsteroidal antiinflammatory drugs (NSAIDs) were reported by 383 (32%) patients, including 34 patients on multiple medications. Aspirin was the most common NSAID and was noted by 158 patients, including 104 patients on 325 mg or less per day. There were no spinal hematomas (major hemorrhagic complications). Blood was noted during needle or catheter placement in 63 (5.2%) patients (minor hemorrhagic complications). NSAIDs did not increase the frequency of minor hemorrhagic complications. However, increased age, needle gauge, needle approach, needle insertion at multiple interspaces, number of needle passes, volume of injectant, and accidental dural puncture were all significant risk factors for minor hemorrhagic complications. There were 42 patients with new neurologic symptoms or worsening of preexisting complaints that persisted more than 24 h after injection; median duration of the symptoms was 3 days (range, 1-20 days). Our results confirm those of previous studies performed in obstetric and surgical populations that document the safety of neuraxial techniques in patients receiving NSAIDs. We conclude that epidural steroid injection is safe in patients receiving aspirin-like antiplatelet medications. Minor worsening of neurologic function may occur after epidural steroid injection and must be differentiated from etiologies requiring intervention. IMPLICATIONS: Previous studies performed in obstetric and surgical populations have demonstrated that antiplatelet therapy does not increase the risk of spinal hematoma associated with spinal or epidural anesthesia and analgesia. We confirm the safety of epidural steroid injection in patients receiving aspirin-like medications.