1. Impact of Restrictive State Policies on Utilization and Expenditures in the Medicaid Program Roberto Vargas, MD, MPH 1,2 Carole Gresenz, PhD 2 Jessie Riposo, MS 2 Jeannette Rogowski, PhD 3 José Escarce, MD, PhD 1,2 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 For state Medicaid programs, the Deficit Reduction Act eliminated Need to offer all benefits to all enrollees 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 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 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 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. 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 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 State Medicaid Summaries from 1997-2002 Summaries of state plan benefits including scope of medical care (Limits on visits and services and co-pays) 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 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 Adults 18-64 with at least one full calendar year of data in MEPS We excluded: We excluded: Patients who were pregnant Patients who were pregnant Had additional forms of insurance Had additional forms of insurance Were enrolled inn Managed care or HMO’s Were enrolled inn Managed care or HMO’s

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

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

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

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

11. Descriptive Data: Individual Characteristics Individual-Level Variables Female64% Non- Hispanic Black 28% Hispanic21% Other Non-White 5% Non-Hispanic White 46% SSI Recipient 41% Income<poverty59% Less than high school 48%

12. Descriptive Data: Outcomes Utilization and Expenditures Mean (Std Err)/ % # Office-based physician visits 5.70 (0.33) # Total office-based visits 8.03 (0.69) Any emergency room visit % 24% Any inpatient admission % 14% Prescription expenditures $1098.28 (56.92) Total medical expenditures $4575.92 (320.53)

13. Descriptive Data: Restrictive Medicaid Policies Policy1997 Any Physician Visit Co pay 18 Limit on number of Physician Visits 17 Any Emergency Room Co pay 4 Prescription Co pay 29 Limit on number of prescriptions per month 11 Inpatient Admissions Co pay 14 Inpatient Daily Co pay 5

14. Regression Results Visit limit policies had no significant impact on visits that included non-physician care, emergency room visits, or inpatient hospital stays 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 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 Per day inpatient co-pay was not associated with hospitalization rates or expenditures

15. Regression Results Co-pays for physician visits Co-pays for physician visits Lower Any ER visit rate (20% compared to 25%; p<0.10) 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 rates of inpatient hospitalization (18% compared to 13%; p<0.05) Higher average total expenditures ($5,431 compared to $4,271; 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 Inpatient admission co-pays of greater than $21 Fewer Admissions (9% compared to 15%; p<0.10) Fewer Admissions (9% compared to 15%; p<0.10) ER visit co-pays ER visit co-pays Lower total expenditures ($3,719 compared to $4,665; p<0.01) Lower total expenditures ($3,719 compared to $4,665; p<0.01)

17. Regression Results Prescription drug co-pays: Prescription drug co-pays: Lower expenditures ($4,145 compared to $5,088; p<0.05) Lower expenditures ($4,145 compared to $5,088; p<0.05) Prescription drug co-pays: Prescription drug co-pays: Significantly lower average number of physician office-based visits (5.58 compared to 6.70; p<0.05) 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 Some co-pays were associated with lower expenditures and utilization Visit limit policies, no significant impact on either outcomes of interest 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 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 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 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 Policy Level Variables 199719981999 2000 * 20012002 Any Physician Visit Co pay 181818171719 Limit on number of Physician Visits 171717171717 Physician Visit and Co pay Restriction 777877 *Data missing for one state

23. State Level ER Restrictive Policies Policy Level Variables 199719981999 2000 * 20012002 Any Emergency Room Co pay 444444 Limit on number of Emergency Room Visits 444444 Emergency Room Co pay and Visit Restriction 111111 *Data missing for one state

24. State Level Inpatient Admission Policies Policy Level Variables 199719981999 2000 * 20012002 Inpatient Admissions Co pay 141616151515 Inpatient Daily Co pay 555555 Inpatient Stay Limit 121212121010 *Data missing for one state

25. State Level Prescription Drug Policies Policy Level Variables 1997199819992000*20012002 Prescription Co pay 292930313031 Limit on number of prescriptions per month 111212121010 Both Rx Co pay and limit 566755 *Data missing for one state