State Medicaid Programs Look To Contain Psychiatric Drug Costs To Alleviate Budget Shortfalls

"Marketplace" last week reported that one way that state Medicaid programs facing budget shortfalls are trying to rein in increasing drug costs is to manage beneficiaries' psychiatric drug expenses. MPR reports that a task force convened by Dr. Annette Hanson, medical director for the Massachusetts Division of Medical Assistance, found that the state could ensure appropriate mental health treatment while reducing spending on psychiatric drugs, which are about 47% of Massachusetts' total Medicaid drug budget. The segment includes comments from Toby Fisher, director of the National Alliance for the Mentally Ill; Hanson and Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured (Palmer, "Marketplace," MPR, 8/1).

In related news, the Kaiser Commission on Medicaid and the Uninsured last week released a preliminary report on strategies states are using to reduce Medicaid funding growth. The survey found that 41 states plan to reduce their Medicaid funding growth in fiscal year 2003. In addition, 36 states appropriated additional funds to Medicaid this year. More than half of the states will alter their prescription drug policies, and 28 states intend to cut or freeze Medicaid payments to providers in FY 2003, according to the survey. The full survey will be released in September (KFF release, 7/31). The preliminarily results are available online.