THE IMPACT OF IMPLEMENTING A MORE RESTRICTIVE PRESCRIPTION LIMIT ON MEDICAID RECIPIENTS - EFFECTS ON COST, THERAPY, AND OUT-OF-POCKET EXPENDITURES

On November 1, 1991, the Georgia Department of Medical Assistance redu ced the maximum number of monthly reimbursable prescriptions from six to five. This policy change provided a natural experiment to investiga te the recipient responses to a decrease in an existing prescription l imit. The research design was a quasiexperimental, retrospective, 12-m onth interrupted time-series analysis of a cohort. The cohort consiste d of 743 ambulatory recipients who were high prescription users. Compl ete Medicaid claims data were obtained, in addition to pharmacy-genera ted computer profiles for all cohort recipients to determine Medicaid and out-of-pocket prescription expenditures. Interrupted time-series a nalyses were performed to modal the effect of the five-prescription li mit on total, Medicaid-reimbursed, out-of-pocket, and prescription use across eight therapeutic categories. After the implementation of the five-prescription limit, total prescription use fell 6.6%, prescriptio ns reimbursed by Medicaid fell 9.9%, and prescriptions paid for out-of -pocket increased 9.7%. Abrupt, permanent decreases were observed for cardiovascular, miscellaneous, pulmonary, and palliative therapeutic d rug categories (alpha = 0.05), whereas gastrointestinal, chemotherapy, hormone (insulin), and central nervous system prescription use remain ed constant. The implementation of a more restrictive prescription lim it alters prescription regimens potentially predisposing elderly Medic aid recipients to clinical consequences. Further examination of the he alth outcomes of these recipients is necessary. Key words: Medicaid; e conomics; Medicaid payment restrictions; demand-side constraints; pres cription. limit; prescription cap; prescription compliance; cost shift ing; prescription payment restrictions; out-of-pocket expenditures.