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The American Journal of Managed Care July 2014
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Medicaid Prior Authorization Policies and Imprisonment Among Patients With Schizophrenia
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Medicaid Prior Authorization Policies and Imprisonment Among Patients With Schizophrenia

Dana Goldman, PhD; John Fastenau, MPH, RPh; Riad Dirani, PhD; Eric Helland, PhD; Geoff Joyce, PhD; Ryan Conrad, PhD; and Darius Lakdawalla, PhD
This study examined the impact of prior authorization formularies on the likelihood that patients with schizophrenia will be arrested and incarcerated.
The outcome variable is an indicator of whether an inmate has screened positive for psychotic symptoms. We utilize 2 questions from the survey. In the first, the survey asked inmates whether during the past year they had seen or heard things that other people said were not there, felt that other people were able to read or control their mind, or felt that someone other than the corrections staff had been spying on or plotting against the inmate. Inmates who answered yes to any of these questions were screened as positive for psychotic symptoms in our analysis. This question measures the presence of psychotic symptoms. Note that it is broader than schizophrenia. Our second measure focuses on a much narrower definition, based on a question that asks the inmate if they have ever been diagnosed by a healthcare provider with schizophrenia or a psychotic disorder. This definition will undercount those inmates who are unwilling or unable to identify themselves as schizophrenic but has the advantage of not resulting from self-diagnosis. As shown in Table 1, 2840 inmates screened positive using the more inclusive definition while 775 reported a prior diagnosis. Significantly, all those with a prior diagnosis also tested positive for the presence of psychotic symptoms.

Explanatory Variables

Two alternative measures of an inmate’s access to atypicals were used. The first is whether the state’s Medicaid program has a prior approval requirement in its formulary, and the second is the Medicaid utilization level of atypical antipsychotics in an inmate’s resident state. Because acute symptoms of schizophrenia can occur after only a few days of missing medication, the lapse between regulation and the effects on imprisonment of schizophrenia patients is likely to be relatively short.

The analysis also included a group of control variables that are commonly suspected to contribute to the onset of schizophrenia: age, gender, race, whether born in the United States, whether completed high school, whether lived with parents when growing up, whether sexually abused as a child, whether caretaker had substance abuse problems, and whether physically abused before admission to prison.

Definition of Subsamples

Along with the full sample of inmates, results were estimated separately on the basis of the type of crime for which the inmate had been convicted. These conviction subgroups include those convicted of 1) violent, 2) drug-related, or 3) nonviolent and nondrug offenses. Note that an inmate convicted of both violent crimes and drug crimes was placed in the violent crime group. Some inmates were excluded from subpopulation analysis because available information regarding their offenses was insufficient.


Characteristics of Inmates in States With and Without Prior Authorization

Table 2 tabulates characteristics of prison inmates in states with and without prior authorization policy for atypicals, as well as state-level characteristics. All statistics were weighted by the inmate population.

A total of 16,844 surveyed inmates from 48 states were included in either regulation analysis or utilization analysis, representing 1,254,589 inmates nationally. Of the surveyed inmates, 3205 came from 4 states (AK, CA, MA, and NY) that instituted prior authorization for atypicals in 2003; 10,375 came from 24 states that had no prior authorization for atypicals in 2003; and the remaining 3264 came from states for which regulation information was unknown.

About a quarter of the inmates resided in states that instituted prior authorization for atypicals in 2003. In these states, the prevalence of serious mental illness in the general population is lower (10.9% vs 11.7%) but the percentage of inmates who screened positive for psychotic symptoms in prison is slightly higher (17.8% vs 17.0% when screened by psychotic symptoms and 5.05% vs 4.35% when screened by prior schizophrenia diagnosis). Per capita Medicaid prescriptions for atypicals are also lower (0.43 vs 0.51) compared with those in states without such regulations.

Impact of Prior Authorization on Imprisonment of Those With Schizophrenia

In Table 2, we observed a slightly higher percentage of inmates with prior diagnoses of schizophrenia, and with symptoms of psychosis, in states that instituted prior authorization despite a lower percentage of serious mental illness in the general population and a better educated prison population in these states.

Table 3, Panel A presents the results of a linear probability model of the presence of psychotic symptoms. The dependent variable indicates whether the inmate has been screened and determined to display symptoms of psychosis. The primary explanatory variable of interest in Table 3 is an indicator of whether that inmate’s state of residence instituted prior authorization for atypicals in 2003. The explanatory variable of interest in Table 4 is the per enrollee prescription of atypicals in that inmate’s state Medicaid program in 2003. Column 1 estimates the linear probability model for the entire inmate population, and columns 2 to 4 limit the analysis to subsamples of inmates with violent crime, with drug offenses, or with nonviolent, nondrug offenses. Here and elsewhere, the coefficients on prior authorization are statistically significant in the “all inmates” group for both probit and logistic regression models, in addition to the linear probability models reported.

Table 3, Panel A shows that the restrictive pharmacy policy variable is associated with higher likelihood that an imprisoned individual displays psychotic symptoms. The estimate shows that the probability an inmate displays symptoms increases by 2.7 percentage points 0.009- 0.046] in a state with a prior authorization requirement for atypicals relative to a state without such a requirement. This demonstrates that prior authorization is associated with higher rates of incarceration. The point estimate for the violent crime population is very close to that estimated for the entire population; it is slightly larger for the nondrug, nonviolent population, but the difference between the 2 estimates is not statistically significant. The estimated rates for nonviolent crime are not statistically different in pre-approval and control states.

The association between prior authorization and psychotic symptoms is somewhat higher among the inmate population with drug offenses, although this difference is not robust across alternative approaches to measuring the outcome of interest.

All personal experience factors included in these models proved to be significant and influential: growing up with at least 1 parent and completing high school are associated with a reduced risk of psychotic symptoms, but parents’ substance abuse, sexual abuse in childhood, and physical abuse are all associated with an increased risk of psychotic symptoms. Relative to white inmates, African American inmates have an increased risk of symptoms in prison, as do other minorities, but age and gender did not prove significant.

In Table 3, Panel B, we re-estimate the model using the physician diagnosis-based measure. Consistent with the fact that the prevalence of physician diagnosis is lower, the estimated associations are also smaller in magnitude but still statistically significant and quite meaningful on a percentage basis. For example, the likelihood that an inmate has been diagnosed with schizophrenia increases by 1.2 percentage points [CI, 0.002-0.023]. The number rises to 2 percentage points [CI, 0.000-0.039] for violent crime and 2.2 percentage points [CI, 0.000-0.045] for nonviolent non-drug offenses. The latter results are statistically significant at the 10% level, but insignificant at the 5% level. (The lower limits of the 2 confidence intervals are rounded up to zero.) Recall that the mean prevalence of previous physician diagnosis was around 5%, suggesting that, for example, a 1.2% increase corresponds to roughly a 24% increase.

Impact of Atypical Utilization on Imprisonment of Those With Schizophrenia

We have examined the most common method of reducing atypical use: requiring prior approval. For confirmation of these results, we examined whether broader use of atypicals affects the prevalence of diagnosed schizophrenia and psychotic symptoms in the state’s prison population. Our estimation model is similar to those used in Table 3, although we removed our prior approval control and included the number of atypicals per capita for the state’s Medicaid population. This approach increased our sample size, because we did not need to identify the specific state’s regulation in 2003 and could include all states in the analysis. Table 4, Panel A, shows that a decrease in the variable measuring utilization of atypical antipsychotics is associated with higher likelihood of psychotic symptoms among the imprisoned population. We find a similar impact when we confine the sample to inmates with nonviolent drug offenses. The effects of the control variables were similar to those seen in the earlier analysis studying prior authorization rules. As shown in Table 4, Panel B, the results for physician-diagnosed schizophrenia are similar, and (as before) smaller in magnitude. Higher usage of atypicals is associated with higher likelihood of prior physician diagnosis of schizophrenia in the full sample, among violent offenders, and among those arrested for nonviolent, nondrug crimes. The coefficients on atypical usage are also statistically significant in the “all inmates” group for both probit and logistic regression models, in addition to the linear probability models reported.


There are several limitations to the study, mostly resulting from the cross-sectional nature of the survey. Although we have controlled for a number of individual characteristics, it is still possible that the states with prior authorization requirements differ in some systematic way from those without in their willingness to incarcerate schizophrenic residents. It is relevant to note here that states with prior authorization requirements displayed lower schizophrenia prevalence in the general population, but higher prevalence within the incarcerated population. Moreover, states with lower atypical usage rates also displayed higher prevalence of psychotic symptoms and diagnosed schizophrenia within the incarcerated population; this result is identified across a broader set of states than just the ones with prior authorization. It is not obvious what causal mechanisms would account for all these results, although the cross-sectional data cannot rule out such mechanisms directly.

The second limitation is that our 2 survey-based screens rely either on self-reported symptoms that include psychoses other than schizophrenia, or on recollection of a physician diagnosis. The former may be overinclusive, while the latter may exclude some undiagnosed cases or patients who cannot accurately recall a diagnosis. It is nonetheless encouraging that results are reasonably robust across the measures.

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