Retrospective assessment of Medicaid step-therapy prior authorization policy for atypical antipsychotic medications

Joel F. Farley, Richard R. Cline, Jon C. Schommer, Ronald S Hadsall, John A Nyman

Research output: Contribution to journalArticlepeer-review

27 Scopus citations


Background: Antipsychotic medications account for more prescription expenditures in Medicaid than any other therapeutic category. This has made them an attractive target for states hoping to curtail rising expenditures. Objective: The objective of this study was to document the effects of a step-therapy prior authorization (PA) policy for atypical antipsychotic medications on: (1) Medicaid prescription expenditures among all Medicaid beneficiaries and (2) prescription and health service expenditures among patients with schizophrenia. Methods: Prescription, inpatient, outpatient, and long-term care State Medicaid Research Files from Georgia and Mississippi from January 1, 1996, to December 31, 1997, were used to model an interrupted time-series analysis. We compared a step-therapy PA policy implemented in Georgia to a nonequivalent/no-treatment control group (Mississippi) over 10-month prepolicy, 11-month policy, and 3-month postpolicy periods. Segmented regression was used to estimate antipsychotic prescription expenditures among all eligible Medicaid beneficiaries. We used generalized estimating equations to model prescription and other health service expenditures with difference-indifference regressions among a cohort of patients with schizophrenia. Results: Compared with Mississippi, Georgia saved ~$7 million in atypical antipsychotic expenditures over the 11-month policy period. Among patients with schizophrenia, the PA policy was associated with a $19.62 per member per month (PMPM) decrease in atypical antipsychotic expenditures and a $2.20 PMPM increase in typical antipsychotic expenditures (both, P < 0.001). Among the same patients with schizophrenia however, the reduction in atypical antipsychotic expenditures was accompanied by a $31.59 PMPM increase in expenditures for outpatient services (P < 0.001). Conclusion: Although PA of atypical antipsychotics was associated with significant prescription savings to the Georgia Medicaid program, among a vulnerable cohort of patients with schizophrenia, an increase in outpatient expenditures was associated with overall savings.

Original languageEnglish (US)
Pages (from-to)1524-1539
Number of pages16
JournalClinical Therapeutics
Issue number8
StatePublished - Aug 2008

Bibliographical note

Funding Information:
The authors wish to acknowledge Pfizer Inc., New York, New York, for their support of this project through an unrestricted educational fellowship. The authors also would like to thank Drs. Bryan Dowd, Carolyn Harley, and Samuel Wagner for contributions to the design and analysis of this study. Dr. Farley has received consultant's fees from Takeda Pharmaceuticals North America Inc., Deerfield, Illinois, and grant support from Pfizer Inc.


  • Medicaid
  • antipsychotic
  • prior authorization
  • psychiatric health
  • schizophrenia


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