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IMS Study Examines Impact of States Shifting Patients to Managed Medicaid Plans

04 Apr 2013


Lynn Shepherd

Managed Medicaid Supplanting Fee-For-Service Model for Prescriptions; Cost and Quality Goals Yet to be Fully Realized

PARSIPPANY, NJ, April 4, 2013 – Nearly half of all Medicaid prescriptions are now being filled through Managed Medicaid plans, as states switch patients from the Fee-for-Service model in an effort to improve patient care and curb the growth of healthcare costs, according to a new IMS Institute for Healthcare Informatics report. The study, Shift from Fee-for-Service to Managed Medicaid: What is the Impact on Patient Care?, which is being presented today at the Academy of Managed Care Pharmacy Annual Meeting in San Diego, CA, examines prescription drug utilization in four states that have experienced a dramatic shift to Managed Medicaid plans since 2011.  

The IMS Institute report, which focuses on Kentucky, New Jersey, New York and Ohio, compares changes in the use of antipsychotic, respiratory and diabetes medications between patients who switched to Managed Medicaid plans and those who remain in Fee-for-Service plans. While early signs indicate that shifting Medicaid beneficiaries to Managed Medicaid programs is affecting some care received by patients, the lack of consistent and measurable change suggests that states’ efforts to bring better care at lower costs to their Medicaid beneficiaries has yet to be fully realized.      

“Managed Medicaid is seen by many states as a way to deliver better preventive care at a lower cost, and recent actions to reduce use of Fee-for-Service plans has been significant,” said Murray Aitken, executive director, IMS Institute for Healthcare Informatics. “While it is still early days, our research reveals some important signs of impact.”

Among the report’s findings:

  • Greater use in all states analyzed of antipsychotic generics, when available. Patients in Managed Medicaid plans are much more likely to use generic antipsychotic drugs than those in Fee-for-Service plans. Generic utilization rates in the four states studied are between 3 percent and 14 percent higher for patients in Managed Medicaid plans.
  • Increased use of diabetes medications in New York. Patients who switched to Managed Medicaid plans in New York received 5 percent more prescriptions for diabetes conditions, including 13 percent greater use of metformin, the most commonly used diabetes treatment.
  • Greater use of respiratory medications in Kentucky. Patients who switched to Managed Medicaid plans in Kentucky increased their average number of prescriptions for respiratory conditions by 5 percent, compared with a 1 percent increase among patients in Ohio and New Jersey.  
  • Negligible impact on care for many patients. Little or no change was experienced by many patients who switched to Managed Medicaid plans, or they experienced changes consistent with those who remained in Fee-for-Service plans. In New Jersey, for example, average diabetes prescription use per patient declined by 2 percent over the period analyzed for both Fee-for-Service and Managed Medicaid plans. Use of antipsychotics in Ohio trended similarly for patients in both types of plans, with each declining by 1 percent.
  • Significant variations remain in Medicaid patient care across states and disease areas. Variations in patient care reflecting longstanding differences in clinical practice, Medicaid program design and patient profiles persist. For example, in New Jersey, average use of antipsychotics per Fee-for-Service Medicaid patient is 40 percent lower than in the other states studied, while use of respiratory medicines by Managed Medicaid plan participants is 40 percent higher.

“The Academy of Managed Care Pharmacy is encouraged to see the positive results of the IMS Institute for Healthcare Informatics study on patients receiving care through Managed Medicaid programs,” said Edith A. Rosato, RPh, IOM, CEO of the Academy of Managed Care Pharmacy. “Given the variability in state programs, Managed Medicaid plans will need to be continually evaluated. Initial findings suggest that patients could be better managed in these programs, particularly when the drug benefit is carved into a state’s managed care plan rather than maintained in a Fee-for-Service program.”

Added Aitken, “As states take on more responsibility with expanded Medicaid enrollment and management of exchanges in 2014 under the Affordable Care Act, their direct and indirect impact on patient care will be subject to closer scrutiny. Measuring and assessing the consequences of their actions on patient care will become more vital to this critical healthcare program.”  

The full report is available at The study was produced independently as a public service, without industry or government funding.

About the IMS Institute for Healthcare Informatics
The IMS Institute for Healthcare Informatics provides key policy setters and decision makers in the global health sector with unique and transformational insights into healthcare dynamics derived from granular analysis of information. It is a research-driven entity with a worldwide reach that collaborates with external healthcare experts from across academia and the public and private sectors to objectively apply IMS’s proprietary global information and analytical assets. More information about the IMS Institute can be found at:

About IMS Health
IMS Health is a leading worldwide provider of information, technology, and services dedicated to making healthcare perform better. With a global technology infrastructure and unique combination of real-world evidence, advanced analytics and proprietary software platforms, IMS Health connects knowledge across all aspects of healthcare to help clients improve patient outcomes and operate more efficiently. The company’s expert resources draw on data from nearly 100,000 suppliers, and on insights from 39 billion healthcare transactions processed annually, to serve more than 5,000 healthcare clients globally. Customers include pharmaceutical, medical device and consumer health manufacturers and distributors, providers, payers, government agencies, policymakers, researchers and the financial community. Additional information is available at