Evaluation of an Automated System for Prior Authorization: A COX-2 Inhibitor Example

Published Online: September 01, 2006
Norman V. Carroll, PhD; Jeff C. Smith, MA; Robert A. Berringer, PharmD; and George L. Oestreich, PharmD

Objective: To evaluate the effectiveness of an automated prior authorization (PA) system (SmartPA) in reducing use of and expenditures for cyclooxygenase-2 (COX-2) inhibitors.

Study Design: Before and after with control group.

Methods: After implementation of SmartPA in Missouri, changes in use of and expenditures for COX-2 inhibitors, COX-2 substitutes (traditional nonsteroidal anti-inflammatory drugs [NSAIDs] and other products for pain), and gastrointestinal (GI) protective agents were compared between the Medicaid program of Missouri and that of a state with no PA program for COX-2 inhibitors. Subjects were continuously enrolled for the 24-month study period and had a claim for a COX-2 inhibitor in the 12-month baseline period. Analyses included comparison of means and linear regression. Regressions controlled for age, sex, risk for GI complications, severity of illness, and the interaction between state and risk.

Results: Changes in expenditures for COX-2 inhibitors, NSAIDs, other pain drugs, and GI-protective drugs were $256 higher, $56 lower, $21 higher, and $198 higher, respectively, in the control state among low-risk patients. Changes in expenditures were $102 higher, $12 lower, $21 lower, and $185 higher, respectively, in the control state among high-risk patients. Results were similar for drug utilization.

Conclusion: Implementation of SmartPA resulted in reduced use of and expenditures for COX-2 inhibitors and reduced net expenditures for all pain and GI-protective medications. These effects were greatest for patients at low risk for GI complications.

(Am J Manag Care. 2006;12:501-508)

State Medicaid prescription drug expenditures continue to grow at an alarming rate. Expenditures grew by more than 15% in 2003, the latest year for which data were available.1 Increases in expenditures in the prior 3 years exceeded 19%.2-4 As one means of controlling growing prescription expenditures, 49 state Medicaid programs have implemented prior authorization (PA) programs.2

A number of studies have indicated that PA programs can produce significant savings. Smalley and colleagues documented a 53% decrease in expenditures on nonsteroidal anti-inflammatory drugs (NSAIDs) after imposition of a PA program for brand name NSAIDs in the Tennessee Medicaid program.5 Kotzan et al also documented substantial savings after introduction of a PA program for single-source NSAIDs in the Georgia Medicaid program.6 Neither program found that medical or hospital costs increased after imposition of the PA program. Phillips and Larson examined PA programs for NSAIDs, benzodiazepines, histamine-2 receptor antagonists (H2RAs), and nonsedating antihistamines in the Iowa Medicaid program.7 They estimated savings of between $2.5 million and $3.8 million net of administrative expenses. Fischer and colleagues examined the effects of Medicaid PA programs on the use of cyclooxygenase-2 (COX-2) inhibitors in a national sample of Medicaid programs.8 The results indicated savings of about $10 per NSAID prescription dispensed. The savings resulted from a 15% decrease in the proportion of NSAID doses represented by COX-2 inhibitors. Hartung et al9 and Gleason et al10 also found evidence of PA-related cost savings on COX-2 inhibitors. Delate et al found that PA was effective in reducing expenditures on proton pump inhibitors in a state Medicaid program.11 Their analyses also indicated no offsetting increases in other medical expenses.

ACS Heritage has developed an automated electronic PA system (SmartPA) that works as an enhanced point-of sale (POS) processing tool. It uses a clinical rules system that queries both drug and medical claims data at the POS in addition to incorporating provider-supplied information within a call center. At the pharmacy POS level, pharmacists enter the patient's prescription into their computer system and submit the claim electronically as they normally would. The claim then is processed through clinical and fiscal edits specific to the medication. The POS system automatically queries the administrative databases (drug claims, medical claims, encounters) and determines whether the PA criteria have been met. (The criteria used in the SmartPA program for COX-2 inhibitors are shown in Table 1.) If PA criteria are met, the pharmacist is sent a message that the prescription is approved. If the prescription is not approved, then the patient and physician have the option of submitting the PA request manually for additional review. The physician may contact the call center and possibly provide new information that was not available in the electronic database, and the request will be reevaluated.

The purpose of this study was to evaluate the effectiveness of the SmartPA system in controlling use of and expenditures for COX-2 inhibitors. COX-2 inhibitors, a subclass of NSAIDs, were, at the time of the study, widely prescribed for relief of chronic arthritis pain. These agents were as effective as, but substantially more expensive than, nonselective NSAIDs. However, COX-2 inhibitors were believed to have substantially lower gastrointestinal (GI) toxicity than nonselective NSAIDs.12-19 Although COX-2 inhibitors were indicated in patients at high risk for GI problems, many patients who were prescribed COX-2 inhibitors lacked these risk factors and could have been treated just as effectively and safely, but at much lower expense, with nonselective NSAIDs. Because of this, traditional PA programs for COX-2 inhibitors have been shown to generate substantial savings. However, the effects of an automated electronic PA system have not been previously reported.

This study had 3 specific objectives:

•To compare changes in use of and expenditures for COX-2 inhibitors as well as products that may have been used as substitutes for COX-2 inhibitors after implementation of the SmartPA program in the Missouri Medicaid program. If COX-2 therapy is denied for a specific patient, his or her physician may use alternative therapies such as nonselective NSAIDs or other pain medications (eg, narcotic analgesics, pentazocine, propoxyphene). Additionally, because COX-2 inhibitors have lower GI toxicity than nonselective NSAIDs, use of products for the prevention or treatment of ulcers (eg, H2RAs, misoprostol, proton pump inhibitors) may increase when COX-2 therapy is denied. If utilization of COX-2 inhibitors is controlled, it is reasonable to expect an increase in the utilization of substitute or adjunct products.

•To compare changes in use of and expenditures for COX-2 inhibitors and substitute products between patients at high risk and low risk for GI problems. If the SmartPA system works as designed, there should be a greater decrease in utilization and expenditures of COX-2 inhibitors in the low-risk group than in the high-risk group.

•To estimate net savings on drug costs attributable to SmartPA-related decreases in COX-2 expenditures, taking into account increases in expenditures for substitute products.


We examined changes in use of and expenditures for COX-2 inhibitors and potential substitutes using a before-and-after study design with a control group. The intervention group consisted of fee-for-service patients enrolled in the Missouri Medicaid program. Missouri Medicaid implemented the SmartPA program for COX-2 inhibitors on December 16, 2002. The baseline period for the study was the 12 months immediately preceding the date of implementation, and the post intervention period was the 12 months immediately after the date of implementation. The control group consisted of fee-forservice patients enrolled in the Medicaid program of a large eastern state that did not have a PA program for COX-2 inhibitors. The baseline and postintervention periods for the control group were the same as for the intervention group. The analysis included all patients who were continuously eligible for Medicaid over the 24-month study period and who had at least 1 claim for a COX-2 in the baseline period.

We examined the cost and use of COX-2 inhibitors, nonselective NSAIDs, other medications used for treatment of pain, proton pump inhibitors, H2RAs, and misoprostol. The Medicaid agencies in both states covered both prescription and nonprescription products for these drug classes. Comparisons were made on a per-patient per-year basis. For purposes of the analysis, patients in each state were categorized into high-risk and low-risk groups. The categorization was based on data from the baseline period. Patients in the high-risk group were those who met the criteria shown in Table 1. Unadjusted means and standard deviations were calculated for changes in expenditures and utilization for each class of drugs after implementation of SmartPA and for both high-risk and low-risk patients in each state. Ordinary least squares linear regressions were run to compare changes in expenditures and utilization after controlling for between-group differences in age, sex, risk for GI problems, the interaction between risk for GI problems and state of residence, and severity of illness. Severity of illness was measured with the Charlson Comorbidity Index.20 The index is a weighted measure of a patient's risk of mortality. It is based on the number and severity of diseases from which the patient suffers. The index was adapted so that International Classification of Diseases, Ninth Revision scores from administrative databases can be used to calculate it.21 If the SmartPA program worked as intended, there should have been a major effect on patients at low risk for GI complications and little effect on patients at high risk. There should be little effect on either group in the control state. We modeled this hypothesis by including a term for the interaction between state and risk in the regression models. GI-protective agents were subject to traditional PA in Missouri in the baseline period and were subject to SmartPA afterwards. GI-protective agents were not covered by either type of PA in the control state in either period.

We estimated unadjusted aggregate drug cost savings related to the SmartPA on COX-2 inhibitors as:

[(Mean change in COX-2 expenditures in Missouri - mean change in COX-2 expenditures in control state) - (mean change in expenditures for COX-2 substitutes in Missouri - mean change in expenditures for COX-2 substitutes in control state)] × Number of COX-2 users in Missouri

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