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Health-care policy, health insurance, reimbursement, acute pain, cancer pain, barriers, prescription drugs, opioid analgesics, Medicare, Medicaid
The United States population can generally be grouped according to the uninsured, the underinsured, the uninsurable, and the insured. People without health insurance and little ability to pay have limited access to health services. It is estimated that 31-37 million people under the age of 65 in the United States have no health insurance and that the size of this group is growing. These are referred to as the "medically indigent." This group includes many of the poor who are not eligible for Medicaid; perhaps one-half are employed full-time or are dependents of full-time workers. Minorities comprise a disproportionate share of this group.7 According to Cancer and the Poor:. A Report to the Nation,8 low-income people experience greater pain and suffering from cancer than other Americans.
Many others have limited insurance. Their income may not be sufficient to cover copayments, deductibles, and the cost of services that are not covered, particularly if they have a chronic illness. These are the underinsured, a group that may be as large as 80 million.7 People who need expensive care for chronic illnesses, such as cancer, diabetes, and AIDS, may be prevented from buying insurance. The underinsured and the uninsurable are also disproportionately represented by minorities.7
People who have health insurance through their employers have found that the services covered by their policies have been reduced in response to increasing health care costs. Employers have also increased copayments and deductibles and have excluded coverage for certain preexisting illnesses.7 In addition, the maximum amount that a health insurance policy may cover (the "lifetime cap") has decreased so that some people with serious illnesses such as cancer may live longer than the value of their policy. These problems in our health-care system have recently become the focus of the Clinton administration's healthcare reform package.
Health insurance coverage can significantly affect patient access to medications. People with full coverage for prescription drugs and outpatient physician visits have 50% more prescriptions filled than those with no coverage despite similar health status. Even though most people in the United States have some health insurance, their coverage for ambulatory care and prescription drugs is limited.12
Does reimbursement for pain management products and services influence, either positively or negatively, the way in which pain is treated, where it is treated, or the supportive care that is made available, as appears to be the case in the treatment of cancer?6
Most elderly Americans pay for their prescription drugs out of pocket. People who are 65 or older spend more on prescription drugs than do those who are 45-64, according to a survey conducted for the American Association for Retired Persons.13 The rate of increase of prescription drug prices has exceeded the growth in buying power of the elderly.11 Because of fixed incomes, the elderly are more likely to have trouble paying for prescription drugs. For three-fourths of those who are 45-54, insurance helps cover the costs of drugs, but only for 40% of those in the 75+ group, 55% for those 65-74, and 68% for those 55-64.13 For a number of reasons, the elderly are experiencing increasing difficulty in obtaining the medications they need.
To understand how reimbursement decisions are currently made, it is helpful to recall that, in general, decisions concerning insurance coverage for the population age 65 and over are made at the national level whereas decisions for other age groups occur at the state level.4
Currently, Medicare covers only drugs administered incidental to a physician's service, for example, drugs given during an inpatient stay, in the doctor's office, or as part of the Medicare hospice benefit. Consequently, elderly people who need outpatient pain management, either for acute or cancer pain, may have to absorb the cost of medications. This may be difficult for elderly patients with cancer, who may have to pay for all of their outpatient medications with a low fixed income. Patients sometimes limit their dose intake in an attempt to keep costs down.11 Some cancer patients receive inadequate pain control because they cannot pay for the medications, in spite of health-care professionals' efforts to manipulate the system.
If patients are admitted to an inpatient facility, however, their prescription drug costs are covered. Clinicians report that in some cases, elderly cancer pain patients are admitted to an inpatient facility in order to improve reimbursement and minimize the patient's out-of-pocket costs. Thus, the lack of Medicare outpatient prescription drug coverage may reinforce shifts to more intensive, expensive, and possibly more risky care, including the use of a catheter and long-term intravenous (IV) or perhaps subcutaneous (SC) drug administration via a portable pump. According to Ferrell, "a patient may well have reimbursement for the $4000 cost of PCA morphine but will have no coverage for $100 of oral morphine solution."14 Furthermore, Medicare does not cover epidural medication administration unless delivered by an infusion pump.14
Ferrell observes that cancer pain patients sometimes receive expensive pain treatments including IV administration of medications in order to justify hospitalizations for pain. Alternatively, cancer patients may receive parenteral analgesia in the home so that the patient can qualify for home nursing care.14
The need for prescription coverage is a major reason most Medicare recipients purchase supplemental insurance known as Medigap or Medicare Supplemental.13 These are private insurance policies, and whether or not they cover prescription drugs depends entirely on the type of insurance and the terms of the specific contract.15
The modern hospice movement was begun in part as a response to the philosophical and cost issues concerning the overtreatment of dying people.17 Hospice care is less expensive than conventional inpatient care. Because a significant portion of Medicare expenditures are for terminally ill patients, the Medicare hospice option was adopted in the hope that expenditures could be reduced.16 Since Medicare began reimbursement in 1983, hospice programs grew from 516 to over 1700 by 1989.16 Medicaid programs in a number of states reimburse hospice care, often using the same basic regulations and payment rates as Medicare. Private insurers also reimburse for hospice care, although to an unknown extent.
Hospices provide services to a small portion of all terminally ill people, and this Medicare benefit is used by far fewer people than was anticipated. There are a number of reasons for this, including the relatively small number of hospices that obtain Medicare certification, Medicare limitations, hospice restrictions on admissions, and ignorance about hospice.16
The Medicare hospice option allows eligible persons to receive care including outpatient prescription drug coverage but only from a Medicare-certified hospice. The hospice is reimbursed at a daily rate that varies depending on the type of service. These services are routine home care (the great majority of care that is provided), respite care, acute inpatient, and continuous care. Each level of care differs in intensity and is therefore reimbursed at a different rate.
The hospice is generally a small business that must carefully manage expenses in order to provide all the services required within a particular per diem rate of reimbursement. By law, the Medicare hospice is responsible for providing quality palliative and pain care, even if the cost for an individual patient or type of service exceeds the per diem reimbursement. Consequently, the hospice assumes an element of financial risk as it must cover a patient's drug cost even when it exceeds the level of reimbursement.
There are indications that hospices all over the country are facing significantly increasing analgesic medication costs that are not covered by the per diem. This places additional economic pressures on hospices. These pressures may result in the need to raise more funds from the local community, limitation of the services included in the per diem rate for non-Medicare or Medicaid beneficiaries, and screening of admissions to take into consideration those patients who may have need for particularly intensive services, i.e., the potential cost "outliers."18
The controlled-release (oral and transdermal) opioid analgesics provide important advantages in pain management and quality of life for the patient and family, not the least of which is allowing a full night's sleep. Direct costs of these medications combined with their increasing use has resulted in significant increases in hospice prescription drug budgets. Hospices that are not associated with hospitals are not able to take advantage of the drug pricing advantage that is available to hospital-based hospices. Efforts have begun to explore the possibility of group purchasing to help control these costs.19
Another example of the difficulty hospices encounter in controlling drug costs is the waste of opioid analgesic medications. When a patient dies, there may be large amounts of medication remaining that have been purchased and paid for by the hospice. Although these medications have been purchased by the hospice, they cannot lawfully be used by any other patients or returned to the pharmacy stock and must be disposed. Depending on the amount and frequency of disposals, a hospice could waste several thousand dollars worth of medications on a monthly basis.
Some of the wasted medication and associated costs in hospice programs could be reduced if pharmacists dispensed portions of the prescription at intervals instead of all at once. Even though this practice might incur additional dispensing fees, it is unlikely that these fees would exceed the value of the medications that could be conserved. Federal regulations specify that a pharmacist may partially dispense a prescription for a Schedule II drug (which includes many opioid analge- sics) if the patient is a resident of a long-term care facility or has a medical diagnosis documenting a terminal illness.20
Terminally ill people who do not elect hospice care may receive conventional care that is covered by Medicare, including inpatient care and home care. Under this plan, however, the expense of prescription drugs is borne by the patient, who may or may not have other insurance that covers the costs of prescription drugs.
The 1990 Omnibus Budget Reconciliation Act (OBRA 90) contained the Medicaid drug rebate law that prohibited the federal government and the states from reducing product cost reimbursement and dispensing fees for 4 years to provide a period of respite to the pharmacy profession that has "borne the brunt of cost-containment in the Medicaid drug program in the 1980s."21 This law authorized a study on whether pharmacists are reimbursed fairly, and allowed states not to cover certain drugs (limited formularies) and to require advance approval before reimbursement (prior authorization). OBRA 90 also sought to improve Medicaid patients' access to prescription drugs by establishing a cost-savings program. Under this plan, a manufacturer provides the state Medicaid program with a rebate on prescription drugs, in return for coverage of all of a manufacturer's drug products.21
Most state Medicaid programs cover injectibles used in the physician's office, home health, and extended care. Outpatient oral analgesic medications, both opioid and nonopioid, are covered by most Medicaid formularies. In addition, some states have developed state-funded expanded drug coverage for their elderly citizens.22
A number of state Medicaid agencies place limitations on prescription quantities. They do this in different ways. A copayment may be required from the patient, or the number of prescriptions allowed a patient per month, the number of refills, and the quantity of medication may be limited. Approximately one-fourth of the state Medicaid programs have implemented patient-level payment restrictions on medications.23
Some restrictions or "caps" may negatively affect patterns of patient care. Soumerai and colleagues24 studied New Hampshire's Medicaid restriction that limited patients to three prescriptions per month, using New Jersey as a comparison. The cap policy resulted in abrupt and significant decreases in the rates of use for medications, including analgesics and anti-inflammatory drugs in the study group of 860 recipients of multiple drugs. These decreases affected in particular a subgroup of patients who were predominantly female and elderly or disabled and who had more than one chronic illness. Replacement of the restriction with a $1 copayment resulted in a return to near previous levels. Soumerai and colleagues24 and Holcombe and Griffin25 have reviewed studies that document the negative effect of reimbursement policies on clinical outcomes and costs including among patients who are poor and chronically ill.
Soumerai and colleagues 24 observe that the average decrease of $20 in reimbursement for medications for the elderly in New Jersey appears to represent more than half of a typical low-income elderly person's disposable income. It may be that the use of copayments instead of prescription caps has less negative effects on the elderly and disabled. However, any decreases in reimbursement or increases in demands on the finances of a low-income person may increase the risk that the person may not be able to afford medical care and prescription drugs.
Soumerai and colleagues24 also studied the effect of the New Hampshire cap on "survival," defined as remaining in the community instead of admission to a nursing home or hospital. They found that the prescription cap raised the risk of chronically ill elderly outpatients being admitted to a nursing home, although not to hospitals. When the cap was repealed the risk returned to previous levels, but the patients who were admitted to the nursing homes did not return to their previous living arrangement in the community. The drugs that were studied were those used for chronic illnesses, diabetes, heart disease, chronic obstructive pulmonary disease and asthma, seizures, or for conditions requiring use of anticoagulants, and included psychoactive medications, nonsteroidal anti-inflammatories, and opioid analgesics. The increased costs of nursing home care appeared to nullify the savings that were generated by the cap. Soumerai and colleagues23 observed that "policies that reduce access to effective medications may increase the rate of adverse clinical outcomes and the accompanying costs."
A number of states allow the sale of "bare bones" policies. These are minimum health insurance packages that generally focus on catastrophic coverage and not on outpatient prescription drugs. It is apparent that a number of health insurers' policies offer minimal coverage for outpatient prescription drugs, including analgesics.
Under HMO coverage, outpatient prescription drug benefits may be part of a standard plan, with copayments of $3 - $5 or more per prescription. On the other hand, prescription drug benefits may only be available through a "rider," which is an extension of the basic benefits plan and which carries an extra premium. Some riders impose deductibles and coinsurance or copayments. Both standard and rider policies may exclude certain medications and may impose limits on prescription quantity, or require use of certain physicians and pharmacies.26
The complexities of HMO health insurance packages are not necessarily revealed in marketing materials. To study this, Anderson and Dunn26 reviewed the disclosure practices of HMOs in marketing and sales literature to determine the scope of outpatient pharmaceutical benefits and whether the limitations of coverage are disclosed in advertising and marketing materials. These researchers found that restrictive prescription drug benefits are common and that promotional materials generally do not fully explain the restrictions that are listed in the legal contract. Further, they observed that there is little inducement for HMOs to describe outpatient prescription drug benefits in their marketing materials because such disclosure is not required by law. Further, although the beneficiary may finally realize that they lack pharmacy benefits, the person may be locked into the policy for a year. The American Association for Retired Persons has developed a checklist for people to use when shopping for HM0s.27
management consultations as "uncovered services."29 Consequently, there is a need to harmonize the federal government's reimbursement policies with the pain-management practices it recommends.
Several states, including New Hampshire, New Jersey, New York, Rhode Island, South Carolina, and Vermont, have controlled substances or pharmacy laws or regulations that limit the quantity of controlled substances, including opioid analgesics, that may lawfully be dispensed at one time to as little as 100 dosage units.30 Such a restriction can result in increased costs to the patient and to insurers, because patients must obtain more frequent prescriptions and incur additional dispensing fees. Such restrictions also appear to affect pain management negatively.31 For example, the author is aware of an Indiana physician with a number of cancer patients who need large quantities of opioids and who have insurance plans that require the use of a particular mail-order pharmacy in New Jersey (which limits dispensing to 120 dosage units per prescription); the physician must write a new prescription every week and send it to the patient who in turn sends it to the mail-order pharmacy. The physician reported that his patients ration their pain medication because of uncertain delivery dates and may thus experience pain until the package arrives.31 An oncology nurse in New Jersey observed that the state's dosage unit restriction encourages shifting patients to intravenous therapy in order to maintain analgesia for patients and to avoid legal uncertainties. A New Hampshire oncologist has reported similar concerns.
Cognizant of the effects of dosage unit restrictions on cancer pain management, the Wisconsin Cancer Pain Initiative worked with state regulatory boards and successfully eliminated the 120 dosage unit restriction in the state's pharmacy regulations in 1991.
The American Managed Care Pharmacy Association (AMCPA), whose members are mail-order pharmacies, restrict the number of dosage units that may be dispensed by their member pharmacies, in order to prevent the diversion and abuse of controlled substances.
The dispensing of Schedule II controlled substances must be limited to the amount necessary to meet the legitimate medical needs of the patient. The dispensing of Schedule II substances should be limited to a 30 day supply, or 120 dosage units, whichever is less.... These maximum quantity limitations enable the patient to obtain a reasonable quantity of controlled substances to assist in an established medical regimen.:31
AMCPA states that the guidelines are consistent with the policies of the Drug Enforcement Administration (DEA), although neither federal law nor DEA regulations restrict the number of dosage units of a Schedule II prescription. Despite this fact, the DEA wrote to AMCPA in 1990:
The DEA commends the efforts your members have made to the implementation of the Guidelines (sic). The Office of Diversion Control is pleased to offer our continued support of your Association.31
There appear to be financial disincentives for pharmacists to stock and dispense prescription drugs that are controlled substances. Pharmacists may have difficulty covering the total costs of dispensing controlled substances because there is little or no discount in the acquisition costs for controlled substances (including analgesics) and because of the additional costs associated with specially required security and record keeping.34 As a result, unreimbursed pharmacy costs may be shifted to patients who pay cash, thereby potentially adding to the burden of the elderly who pay for prescription drugs out of pocket.
The Pharmaceutical Manufacturers Association has compiled a directory listing 59 indigent patient program initiatives sponsored by 44 companies.35 The US Senate has compiled a similar directory.11 Numbers of drug companies make their products available without charge on a case-by-case basis to indigent outpatients.35 The extent to which manufacturers of opioid analgesics sponsor such programs has not been reported although there are some examples.36,37
The American Cancer Society (ACS) is a referral source for indigent cancer patients in need of medications, providing information about pharmaceutical companies that operate medication assistance programs.38 The ACS notes, however, that many pain control drugs, such as morphine, are narcotics and considered a controlled substance. These drugs are at times provided free of charge but not often. 38 In addition, a number of the State Divisions of the American Cancer Society help indigent cancer patients pay for medications (both oncologics and analgesics) that they could not otherwise afford.
Some patient-care facilities may also help to defer the medication costs of cancer patients. For example, Cancer Care Inc. in New York City is a social work agency that provides supportive care to cancer patients and their families. It has a program to provide financial assistance to patients for the costs of pain medication not adequately covered by insurance plans. Cancer Care has prepared its own directory of pharmaceutical companies that will provide cancer-related medications without charge to low-income people with cancer. In addition, large multispecialty clinics and hospitals may absorb some of the costs of care for low-income patients if there is not a third-party payer and the patient cannot pay the bill.
The evidence suggests that uneven reimbursement policies for pain management are yet another, and perhaps profound, barrier to the relief of acute and cancer pain. Although there is little systematic outcome research, it is clear that reimbursement or lack of it for health-care services and prescription drugs governs access of patients to pain management services.
The United States is the only advanced industrial society in the world where a patient's ability to pay determines access to health care5 As a result, many people with little ability to pay have either no or minimal health insurance coverage. The elderly and minorities are overrepresented in this group. It is reasonable to infer that their access to health-care services, including pain management, is impaired. While low-income people who are eligible for Medicaid have access to health-care services, including outpatient prescription drugs, restrictions in some states may discourage appropriate use of medication and encourage more expensive forms of pain management. The elderly, including those with low incomes, do not have the benefit of outpatient prescription drug coverage under Medicare and are at risk for rationing analgesic and other medications due to the out-of-pocket expense involved. Medicare reimbursement policies appear to favor more expensive and intensive forms of pain management. While the Medicare hospice benefit is a positive option for terminally ill cancer patients with pain, its use has been limited by a number of factors. Hospices themselves are having difficulty covering the increasing costs of analgesics.
Private health insurance coverage for pain-related services and products varies widely, often does not cover outpatient pain medications, and may be limited by copayments, deductibles, exclusions, and caps. Some plans require use of mail-order pharmacies that arbitrarily limit the amount of opioids they will dispense to patients regardless of the amount ordered by a physician as medically necessary. Restrictive drug benefits in HMOs, although common, are seldom disclosed in advertising materials, thereby hampering consumer ability to make informed choices about coverage.
The current patchwork approach to funding health care in the United States is finally receiving the attention in Washington and around the country that it deserves. But will these reform efforts address pain management as an important part of our national health priorities? Current proposals that include a uniform prescription drug benefit are a big step in the right direction. However, pain management is not receiving the systematic attention that is given to other areas of health-care reform. Now that pain management is becoming a higher priority for the public and health professionals, it is time to address the role of pain management in national health-care policy. The advent of sound clinical practice guidelines for acute and cancer pain from the expert panels convened by the Agency for Health Care Policy and Research provides an excellent basis for this discussion.
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|Address reprint requests to: David E. Joranson, MSSW, Pain Research Group, 1900 University Avenue, Madison, WI
Accepted for publication: November 1, 1993.
This product is the work of a panel of experts and consumers convened by the Agency for Health Care Policy and Research pursuant to federal law. This product does not represent necessarily the position of the US Department of Health and Human Services.
Copyright U.S. Cancer Pain Relief Committee, 1994 Published by Elsevier, New York, New York