Printer Friendly

Medicaid coverage of newer psychotropic medication.

Approximately 5 million people in the United States suffer from severe mental illnesses such s schizophrenia, bipolar disorder, major depression, and severe forms of panic and obsessive--compulsive disorders (National Advisory Mental Health Council, 1993). These mental illnesses can run a chronic course and disable the daily living activities of individuals.

Of the many treatment approaches available for severe mental illness, pharmacotherapy or drug treatment first introduced in the 1950s has been the most helpful in ameliorating symptoms caused by such disorders. The newer psychotropic drugs introduced in the mid-1990s have especially been found to be more promising than the earlier traditional psychotropic drugs. The overall findings of the clinical trials completed on newer antipsychotics provide evidence that these drugs are more effective and have fewer side effects compared with the older antipsychotic drugs (McEvoy, 1998). Clinical trials completed with newer antidepressant drugs likewise reveal that these drugs are as effective as traditional antidepressants and are safer in terms of adverse side effects (Rush, 1998).

However, these newer drugs cost more than the traditional drugs (Nightengale, Crumly, Liao, Lawrence, & Jacobs, 1998). The high cost has led many private and public insurance companies to impose restrictions that can limit access to these newer drugs. State Medicaid programs, facing budget crisis, also institute such cost containment policies. Medicaid covers people who are predominantly from a low-income group and individuals who receive Supplemental Security Income because of their disabilities. It also covers many people with mental illnesses who are unemployed and who have severe symptoms (U.S. Department of Health and Human Services, 1999). Medicaid, consequently, is an important source of health coverage for people who might benefit most from the newer psychotropic drugs, yet cannot afford them.

This preliminary study thus explores the extent of coverage of newer psychotropic drugs under Medicaid. There are no studies available on Medicaid psychotropic drug coverage, and this is a first step in understanding the availability of such drugs for patients with severe mental illness.


A review of the federal Medicaid drug coverage policies can clarify the extent of influence that the federal and state programs have on drug coverage. According to the Social Security Amendments of 1965 (P.L. Law 89-97), federal Medicaid policies give states some flexibility to determine the range of optional services covered under Medicaid, including prescription drugs (Buchanan & Smith, 1994). For federal Medicaid matching funds to be available to states for covered outpatient drugs of a manufacturer, the manufacturer must enter into and have in effect a rebate agreement with the federal government (personal communication with M. Hazelwood, manager, Pharmacy and Ancillary Services Programs, Illinois Department of Public Aid, December 20, 2000). This national drug rebate program was created by the Omnibus Budget Reconciliation Act of 1990 (P.L. 101-508) and has been in effect since 1991. All of the drugs (except for a short list of drugs, such as those to treat hair loss, weight loss, infertility, and smoking) of the manufacturers who sign these rebate agreements will be covered by the state Medicaid programs. On a quarterly basis, the federal Medicaid agency sends the states a list of the manufacturers who have entered the drug rebate program. Although state Medicaid programs do not have the flexibility to decide not to cover these drugs, states may choose to put drugs from rebating manufacturers on prior authorization (Buchanan & Smith), which is a restriction that requires obtaining permission for payment before prescription.

In addition, the Tax Equity and Fiscal Responsibility Act of 1982 (P.L. 97-248) allows state Medicaid programs to charge recipients nominal copayments for most covered services (Buchanan & Smith, 1994). The federal government, however, also specifies that providers may not deny services to a recipient who is unable to pay these copayments. Moreover, federal regulations allow Medicaid programs to appropriately limit a service to control utilization, as specified in the Code of Federal Regulations, 1992 (Buchanan & Smith).

Thus, it seems that although the decision of which drugs will be covered under the Medicaid program is by and large based on the drug rebate program, the states have flexibility in determining whether to require prior authorization, copayments, or other restrictions.


The first task was to determine the newer psychotropic drugs to be included in the study. I reviewed the literature and identified the most important newer psychotropic drugs. I used three criteria for choosing the drugs: (1) The drugs were proven to be effective in clinical trials, (2) were approved by the Federal Drug Administration, and (3) were prescribed for severe mental illness. The list of drugs obtained from this search was reviewed by a leading academic mental health expert, and a final list of the following 13 drugs was selected: antipsychotics--risperidone (Risperdal), olanzapine (Zyprexa), and quetiapine (Seroquel)--and anti-depressants--citalopram (Celexa), fluoxetine (Prozac), paroxetine (Paxil), fluvoxamine (Luvox), sertraline (Zoloft), venlafaxine (Effexor), nefazodone (Serzone), trazodone (Desyrel), mirtazapine (Remeron), and bupropion (Wellbutrin).

The five most populated states (California, Texas, New York, Florida, and Illinois) were identified from the Internet Public Library (University of Michigan School of Information, 2002) to be included in the study. The Medicaid agency in each of these states was contacted by phone in spring 2001 and asked the following three questions: (1) Are all the 13 drugs covered under the state's Medicaid program? (2) Are there any copayments for each of the drugs? (3) Are there any restrictions in the coverage of each of these drugs?

The contact numbers for the states were obtained by accessing each state's Medicaid Web site. Contacts were established with the five states, and staff in each state agreed to cooperate. Phone calls were followed up by e-mails, faxes, and letters when required.


Each of the 13 drugs was covered in all five states (Table 1). There were no copayments for these drugs in any of the states except California, where a $1 nonmandatory fee per prescription was charged. Other restrictions were found in three of the five states: California, Florida, and New York. California had a six-prescription-per-month restriction. Florida had many restrictions, including a 34-day supply restriction for most of the drugs in the list. In addition, for drugs such as Seroquel, Celexa, Prozac, Paxil, and Zoloft certain restrictions were placed on the dosage covered per day (Table 1). Other restrictions, in the form of breaking the tablets in half to obtain the required dosage, or prior authorization, were also present for some drugs. In New York, Risperdal, Zyprexa, and Seroquel had a 30-day supply limit, and all other drugs had a 90-day supply. Illinois and Texas had no restrictions.


In the five states studied, it was found that Medicaid covered all newer psychotropic drugs considered, with no major copayments or restrictions that could delay or deny accessibility. This finding is encouraging.

However, some minor restrictions could pose problems in obtaining drugs for some patients. For instance, in Florida, Zoloft 50 mg and Paxil 20 mg were obtained by breaking Zoloft 100-mg and Paxil 40-mg tablets in half, respectively. Breaking the tablet evenly into two halves and obtaining the correct dosage might be difficult for some patients. For those who have such a problem in Florida, Zoloft 50 mg is available through prior authorization. Prior authorization is a restriction that involves a cumbersome and time-consuming bureaucratic process (National Mental Health Association, 2002) and proves disadvantageous in obtaining medications. Particularly given that many people with severe mental health problems may easily refrain from seeking services, such restrictions may affect access, even when drugs are covered under Medicaid. In addition, restrictions on the number of prescriptions per month found in California could pose problems in acquiring drugs (Chubon, Schulz, Lingle, & Coster-Schulz, 1994), especially in cases where the patient has multiple illnesses.

Finally, some policies could result in an excessive supply of drugs. For example, in Florida, eight 20-mg tablets of Prozac were covered per day. The literature on dosage and administration of Prozac indicates that the maximum recommended dosage for Prozac is 10 to 60 mg per day (Dubovsky & Buzan, 1999). Given such a recommended dosage, it is difficult to understand why eight tablets per day are allowed for 20-mg tablets. Such policies seem unnecessary.

The best policy for drug coverage would ensure the availability of the required dosage for each individual case without these problematic restrictions that could result in possible inadequate dosages, problems in acquisition of drugs, or oversupply. This will need a careful calculation of the amount for each supply of each drug covered, so that individual variations in medication needs are addressed. The maximum practical utility for the beneficiaries should be the goal of policy implementation, particularly given the severe functioning problems characteristic of many people with severe mental illness.

This study has several limitations. It asked specific, but limited, questions and did not probe into many other aspects of policy or practice in Medicaid drug coverage, including differences in coverage for those who are medically and categorically needy, practices of mandatory substitution of generic drugs, and issues regarding pharmacy-dispensing fees. In addition, these findings might not be representative of all states. Other states may have more or other sorts of restrictions. Another limitation is that this study ensures availability, but availability does not mean use.


The findings of this study have important implications for social work practice and research. Because the restrictions found in this study could be disadvantageous for some patients, social workers should engage in advocacy roles with state legislators and Medicaid agencies to remove any restrictions limiting access to effective drugs. This effort requires more research to understand the impact of these restrictions on recipients' day-to-day lives. The drug rebate program, as discussed earlier, plays a major role in determining the drugs covered under the Medicaid program. Social workers should make sure that effective newer drugs continue to be included through this program. This requires ongoing monitoring of the drug coverage policies, keeping abreast of the advancing knowledge of psychotropic medication, and working with support groups such as the National Alliance for the Mentally Ill to influence the choice of drugs covered so that people with mental illnesses can lead better lives.

Original manuscript received November 4, 2002

Final revision received August 14, 2003

Accepted September 8, 2003


Buchanan, R. J., & Smith, S. R. (1994). Medicaid policies for HIV-related prescription drugs. Health Care Financing Review, 15(3), 43-61.

Chubon, S. J., Schulz, R. M., Lingle, E. W., & Coster-Schulz, M. A. (1994). Too many medications, too little money: How do patients cope? Public Health Nursing, 11, 412-415.

Dubovsky, S. L., & Buzan, R. D. (1999). Mood disorders. In R. E. Hales, S. C. Yudofsky, & J. A. Talbott (Eds.), Textbook of psychiatry (pp. 479-565).Washington, DC: American Psychiatric Press.

McEvoy, J. P. (1998). New treatment options to improve clinical outcomes. Journal of Clinical Psychiatry, 59, 3-4.

National Advisory Mental Health Council. (1993). Health care reforms for Americans with severe mental illnesses: Report of the National Advisory Mental Health Council. American Journal of Psychiatry, 150, 1447-1465.

National Mental Health Association. (2002). Pennywise & pound foolish: Restricting access to psychotropic medications. Retrieved September 2002 from http://

Nightengale, B. S., Crumly, J. M., Liao, J., Lawrence, B. J., & Jacobs, E. W. (1998). Economic outcomes of antipsychotic agents in a Medicaid population: Traditional agents versus risperidone. Psychopharmacology Bulletin, 34, 373-382.

Omnibus Budget Reconciliation Act of 1990, P.L. 101-508, 104 Stat. 143.

Rush, J. A. (1998). Beyond SSRIs. Journal of Clinical Psychiatry, 59, 3-4.

Social Security Amendments of 1965, P.L. 89-97, 79 Stat. 286.

Tax Equity and Fiscal Responsibility Act of 1982, P.L. 97-248, 96 Stat. 324.

University of Michigan School of Information. (2002). States ranked by size and population [Table]. Internet Public Library. Retrieved July 2002 from http://

U.S. Department of Health and Human Services. (1999). Mental health: A report of the surgeon general. Rockville, MD: U.S. Department of Health and Human Services, National Institute of Health, National Institute of Mental Health, Substance Abuse and Mental Health Services Administration, Center for Mental Health Services.

Meenakshi Venkataraman, PhD, is assistant professor, Division of Social Work, School of Applied Social Sciences, Eberly College of Arts and Sciences, West Virginia University, 100 Knapp Hall, P.O. Box 6830, Morgantown, WV 26506; e-mail: An earlier version of this article was presented at the 7th annual conference of the Society for Social Work and Research, January 17, 2003, Washington, DC.
Table 1: Coverage Patterns and Restrictions under Medicaid
for Newer Psychotropic Drugs in Five States

State Drugs Covered Copayments

California All covered $1/prescription--not mandatory

Florida All covered No copayment

Illinois All covered No copayment

New York All covered No copayment

Texas All covered No copayment

State Restrictions

California 6 prescriptions/month

Florida Seroquel - 12/day
 Celexa - 20mg, 1/day
 40mg, 2/day
 Prozac - l0mg, 2/day
 40mg, 2/day
 20mg, 8/day
 Paxil - 2/day
 10mg, denied
 Zoloft - 50mg, needs PA
 25mg, 1/day
 Others - 34-day supply

Illinois No restrictions

New York Risperdal, Seroquel, Zyprexa--30-day supply
 Others--90-day supply

Texas No restrictions

Note: PA = prior authorization.
COPYRIGHT 2006 National Association of Social Workers
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2006 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Venkataraman, Meenakshi
Publication:Health and Social Work
Geographic Code:1USA
Date:Aug 1, 2006
Previous Article:Social work ethics audits in health care settings: a case study.
Next Article:Social work in the Department of Veterans Affairs: lessons learned.

Related Articles
Should psychologists have prescription privileges?
Kids' psychotropic use approaching adult levels. (Steady Rise Over a Decade).
Anxiety diagnoses and their relationship to the number of prescribed psychotropic medications.
Singleton v. Norris.
Singleton v. Norris.
Unanticipated psychotropic medication reactions.
Scraping for evidence: we have little evidence of the safety and effectiveness of mental health treatments for children.
Prescription drug use and expenditures among dually eligible beneficiaries.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters