MEDICAID  DRUG  USE  REVIEW 
PROGRAMS 
LESSONS LEARNED BY STATES 
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OEI-01-924)0800 
. 
.  OFFICE  OF INSPE~OR  GENERAL 
The  mission  of the  Office of Inspector  General  (OIG),  as mandated  by Public  Law 95-452, as 
amended,  is to protect  the integrity  of the  Department  of Health  and Human  Services (HHS) 
programs  as well as the  health  and welfare  of beneficiaries  served  by those  programs.  This 
statutory  mission is carried  out  through  a nationwide  network  of audits,  investigations,  and 
inspections  conducted  by three  OIG  operating  components:  the  Office of Audit  Services,  the 
Office of Investigations,  and the  Office of Evaluation  and Inspections.  The  OIG  also informs 
the  Secretary  of HHS  of program  and management  problems  and recommends  courses  to 
correct  them. 
OFFICE  OF AUDIT  SERVICES 
The  OIGS  Office of Audit  Setices  (OAS)  provides  all auditing  services for HHS,  either  by 
conducting  audits  with its own audit resources  or by overseeing  audit work done  by others. 
Audits  examine  the  performance  of HHS  programs  and/or  its grantees  and contractors  in 
carrying out  their  respective  responsibilities  and are intended  to provide  independent 
assessments  of HHS  programs  and operations  in order  to reduce  waste,  abuse,  and 
mismanagement  and to promote  economy  and efficiency throughout  the  Department. 
OFFICE  OF INVESTIGATIONS 
The  OIGS  Office of Investigations  (01)  conducts  criminal, civil, and administrative 
investigations  of allegations  of wrongdoing  in HHS  programs  or to HHS  beneficiaries  and of 
unjust  enrichment  by providers.  The  investigative  efforts  of 01 lead to criminal  convictions, 
administrative  sanctions,  or civil money penalties.  The  01  also oversees  State  Medicaid  fraud 
control  units which investigate  and prosecute  fraud  and patient  abuse  in the  Medicaid  program. 
OFFICE  OF EVMXJATION  AND  INSPECIIONS 
The  OIGS  Office of Evaluation  and Inspections  (OEI)  conducts  short-term  management  and 
program  evaluations  (called  inspections)  that  focus on issues of concern  to the  Department, 
the  Congress,  and the  public.  The findings  and recommendations  contained  in these  inspection 
reports  generate  rapid,  accurate,  and up-to-date  information  on the  efficiency, vulnerability, 
and effectiveness  of departmental  programs. 
This report  was prepared  under  the direction  of Mark  R. Yessian,  Ph.D.,  Regional  Inspector 
General,  and Martha  B. Kvaal, Deputy  Regional  Inspector  General,  Boston  Region,  Office of 
Evaluation  and Inspections.  Participating  in this project  were  the following  people: 
Boston Region  Headquarters 
Barry McCoy  Mary Beth  Clarke 
Craig Schneider 
For additional copies of this report,please contact the Boston regionaloffice by telephone at 
(617) 565-1050 or by fm  at (617) 565-3751.  Depatiment of Health and Human Setices 
OFFICE  OF 
INSPECTOR  GENERAL 
MEDIc, MD  DRUG  USE  REVIEW 
PROGWMS 
LESSONS LEARNED BY STATES
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GIBBS  BROW 
Inspector  General 
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>>%@a  MAY  1995 
OEI-01-W-Wm  EXECUTIVE  SUMMARY

PURPOSE 
This  study identifies  lessons  the  States  have  learned  in implementing  the  Medicaid 
drug  use review  requirements  established  by Congress  in 1990. 
BACKGROUND 
The  Omnibus  Budget  Reconciliation  Act  of 1990 (OBRA  90) requires  State  Medicaid 
agencies  to implement  comprehensive  drug  use review  (DUR)  programs  to improve 
the  quality  and  cost-effectiveness  of drug  therapies.  Drug  use  review  is a process  for 
identi&ing  (1) potential  safety problems  with prescriptions,  prospectively,  at the  time 
of dispensing  and  (2) questionable  patterns  of prescribing  and/or  dispensing  problems 
retrospectively  through  reviews  of prescription  claims  data.  The  third  component  of 
drug  use  review  is programs  for educating  physicians  and  pharmacists  about 
appropriate  drug  therapies. 
This report  begins  by identifying  nine  important  lessons  learned  by States  as they  have 
developed  and  implemented  DUR  programs.  Each  lesson  includes  vignettes  that 
speci&  ways in which  some  States  have  applied  the  lesson.  We include  those  that 
seem  to be  sufficiently  different  and  important  to warrant  the  attention  of other 
States.  This  report  concludes  with discussion  of several  challenges  that,  if not 
addressed,  could  undermine  States  DUR  efforts  in the years  ahead. 
We  drew  on three  major  sources  of information  for the  lessons,  vignettes,  and  issues 
discussed  in this report:  the  literature  on drug  use review  discussions  with many  State 
and  Federal  DUR  officials  and  review  of their  internal  documents;  and  on-site  visits to 
DUR  programs  in six States. 
LESSONSLEARNED BY STAIZS 
Lesson 1:  Develop credibledruguse criterik 
Credible  criteria  provide  an essential  foundation  for DUR  programs.  Physicians  and 
pharmacists  must  have  confidence  that  the  criteria  are  based  on professional  expertise,
. 
experience,  and  up-to-date,  science-based  research.  States  ~ould: 
establish  guidelines  for the  States  drug  use review  boards  to use when

reviewing  criteria;  and

obtain  feedback  on criteria  from  many  sources.

i  Lemon  2:  Be selective in devehpihg and app&ingdruguse cri!eria. 
States  review  of the  voluminous  pharmacy  claims  can easily generate  extensive  data 
and  result  in information  overload.  Reviews  need  to be selective.  States  could: 
focus  criteria  on clinically important  areas;  and 
F 
k  apply  only a few criteria  at one  time. 
Lesson 3:  Applydruguse cnkria witha highdegreeof specijicdy. 
States  also risk information  overload  if their  criteria  are  too  broadly  defined.  Highly 
specific  criteria  can  reduce  the  number  of less significant  alerts.  States  could: 
modi@ or eliminate  criteria  after  reviewing  the  volume  of alerts;  and 
b 
k  conduct  careful  pilot  tests  of the  criteria  before  implementation. 
Lesson 4:  EXmnine patternsof thuguse,presmbin~anddispensing 
Pattern  analysis  can be valuable  for identifying  those  providers  and  patients  warranting 
intervention  and  in maximizing  the  effectiveness  of the  DUR  effort.  States  could: 
  establish  relational  data  bases  to give a broad  picture  of drug  use;  and 
b  develop  profiles  of drug  use for patients,  physicians,  and  pharmacies. 
Lesson 5:  l%esent datain waysthatfacilitatearuz~siyandcomectiveaction. 
To be  useful,  the  basic  data  generated  by DUR  reviews  must  be  presented  to program 
officials  and  to the  providers  in ways that  are  easily understood.  States  could: 
display  data  for providers  that  compares  them  with their  peers;  and 
F 
  report  performance  data  in context. 
Lesson 6:	 Intervenewithprovidimhavingquestionablepnzwibing anddiyxmsing 
pmctices in waysthat motivatechange. 
The  DUR  programs  need  to intervene  in ways that  are  feasible  yet  effective  in 
influencing  providers  drug  therapy  practices.  States  could: 
tailor  intervention  letters  to the  individual  and  include  credible  and  compelling 
k 
information;  and 
  invest  selectively  in personal  contacts  with providers.  Lesson z  Fostercompliancewi!hpatientcounselingrequirements. 
Counseling  patients  about  their  drug  therapy  is important  in encouraging  appropriate 
drug  use.  Yet  pharmacists  confront  many  obstacles  to counseling,  and  States  have 
difficulty  monitoring  pharmacists  compliance  with the  law.  States  could: 
F  use pharmacy  inspectors  as patients  to assess compliance; 
  survey pharmacists  and  patients  by mail;  and 
F  take  punitive  actions  when  necessary. 
Lesson 8:	 Educatephysiciansandphurmacirtsproactivelyabo~  appoptiate prescribing 
and dkpenshg practices. 
States  emphasize  the  educational  nature  of DUR  programs  and  promote  this message

with providers  having  questionable  practices.  But States  can  also adopt  preventive

approaches  by educating  the  larger  provider  community.  States  could:

mail  special  messages  to all providers;

k 
  target  special  training  to specific  provider  groups;  and

  use  the  information  superhighway.

Lesson 9:  EMabhkhon-going resea~h @orts to helpguidetheprogranz 
States  rely on a limited  knowledge  base  to guide  them.  Applied  research  efforts  can be

important  for helping  DUR  programs  operate  efficiently  and  effectively.  States  could:

  evaluate  their  screening  criteria;

k  examine  sources  of alerts  by practice  setting  and  location;  and

  assess  effectiveness  of different  types  of educational  interventions.

M4.K)R CHALLENGES FACING STAIE DUR PROGRAMS 
States  have  been  moving  ahead  with their  DUR  programs  through  largely  uncharted 
territory.  They  have  crafted  many  different  approaches  to DUR  and  have  learned  from 
their  experience.  At the  same  time,  DUR  programs  face  several  challenges,  which,  if not 
adequately  addressed  by State  and  Federal  leadership,  could  undermine  the  effectiveness 
of their  efforts  in the  years  ahead. 
Privacy  safeguards. 
  Do the programs give adequate  attention  to privacy safeguards? 
The  widespread  use  of large,  automated  systems for reviewing  Medicaid  beneficiaries 
medical  and  drug  histories  raises  important  privacy  issues concerning  what  data  should  be 
collected  and  who  should  have  access  to these  data  and  under  what  conditions. 
... 
111  Protection  of poor  performers. 
b	 Does the educational  focus  of the programs unnecessarily  inhibit  efforts to protect 
beneficiaries ji-om poorly pe~orming  providers? 
State  DUR  programs  emphasize  educational  approaches  for improving  providers 
prescribing  and  dispensing  practices;  they rarely  pursue  punitive  actions.  The  DUR 
programs  appear  to lack interventions,  falling in the  middle  of this continuum,  that  could 
help  in situations  in which  a providers  knowledge  base  or practice  skills raise  serious 
questions  yet  do not  warrant  referral  for possible  disciplinary  action. 
Education  of patients. 
b  Are  the programs su.ciently  focused  on patient  education? 
State  DUR  programs  focus almost  exclusively on educating  physicians  and  pharmacists. 
Helping  patients  become  better  informed  about  their  drug  therapies  receives  very little 
emphasis,  even  though  the  health  care  system  is being  transformed  by the  growing 
influence  of patients  in decision  making  about  their  medical  care. 
Dependence  on vendors. 
  Are  the programs too dependent  on the vendors serving them? 
Most  frequently,  States  rely on vendors  to provide  the  screening  criteria,  the  computer 
software,  and  other  technical  know-how  essential  to  DUR  efforts.  This  expertise  has  been 
invaluable  to DUR  programs;  yet the  heavy reliance  on vendors  raises  issues  about 
whether  States  have  enough  expertise  in-house  to ensure  that  the  vendors  work  meets  the 
States  own particular  needs. 
Problems  with Medicaid  claims data. 
b	 Do inaccurate,  incomplete  Medicaid  claims data bases serve as a significant  constraint 
to the programs? 
Problems  with  incomplete  and/or  inaccurate  data  surfaced  in virtually  every  State  we 
contacted.  They  can make  it difficult  for DUR  programs  to  be  efficient  and  effective. 
Validity of cost-savings estimates. 
b  Are  the programs  claiming  cost savings that rest on weak foundations? 
Estimating  cost  savings for DUR  programs  is essential  but  highly complex  and  resource-
intensive.  The  HCFA  has been  developing  guidelines  to help  the  States  prepare 
meaningful  estimates.  Yet  the  situation  remains  one  in which  the  estimates  can be 
misleading  about  the  impact  of the  DUR  programs. 
iv  Balancebetween  cost and quality. 
b  Are  the cost-saving and quality-of-care  objectives of the programs in balance? 
Both  objectives  are  vital  to DUR  programs.  Yet  given the  cost pressures  and  the 
complexity  of decisions  around  criteria,  screens,  and  interventions,  States  face  significant 
challenges  in ensuring  that  the  programs,  in fact, balance  both  objectives. 
Implications  of managed  care. 
	 Are  States developing  a DLIR infrastructure that will become  increasingly in-elevant as 
Medicaid  managed  care enrollment  escalates? 
Thus  far, State  DUR  programs  have  given little  attention  to this significant  change.  Yet 
the  implications  for them  are  profound.  Medicaid  beneficiaries  who enroll  in these  plans, 
many  of which  provide  prescription  drug  coverage,  become  the  responsibility  of the  plans. 
Their  drug  use,  and  the  prescribing  and  dispensing  practices  of their  health  care  providers 
are  then,  in effect,  beyond  the  reach  of the  States  DUR  efforts. 
v 
  TABLE  OF  CONTENTS

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m~s~y.......  ..  00 O. . . . . . . . . . . . . . . . . . . . . . . . . . . ..i

~ODU~ON  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  I

_ONS  ~D  BY STA~ 
Credible  drug  use criteria  . . . . . . . . . . 
elective  application  ofcriteria.  .-ooo:;:~-.......  . . . . . . . 
4

Specifici~  ofcriteria  . . . . . . . .  . . . . . . . . . . . . . .
 !. 
.  6

Patterns  ofuse  . . . . . . . .  -.............;:  ~~~~:~ 
8

Presentation  ofdata.  o.  so:;;:  ; ----..........,..  ,..OOO

. . . . . . . .  10

lnteNentionS  With indi~dua]providers  . . ..~:::    .....  . . . . 
12

atient  coLlnSeling  requirements  . . . . . ..O..    - .  s . . . . . . . . . 
15

Prowder  education  . . . . . . . . . .  . . . . . . .

17

Research  . . . . ..o.  .o  - -.  ..  I;:  I;  R;~j;  ;;  I;~j;  ;;  I ; 
. . . . ..O  . . . . . . . 19

. . . . . . . . . . . . . . . . . . . . . .
. .  21

MAJOR  -~NG~  FACING STA~  DUR  PROGWS

k  Privacy  safeguards  . . . . . . . . . . 
b	 . . ...>  .
rotection  ofpoorperformers  ..oc  .m.  .-  -- . s o. . . . . . . . . . . . . . 
23

  Education  ofpatients  o. . ..  aa . . .  . s. . . . . . . . . . . . . . . . . . . . . 
23

 
ePendence  onvendorso.  ..oo  ..  ::   -  -.  s. . . . . . . . . . . . . . . .

F  . . . ..O  . .  24

rOb]ems  ~thMedicaidc]aims  data  me . . . . . . . .  -------- . . . . . . . . 
24

 
a]idiT  OfcC)st-Satings  estimates  . . . . . . . .       o. . . . . . . . . 
E
 25

alance  between  cost  andqualiV  o...  : : . . . . . . . . . . . . . . . . . 
25

 
implications  ofrnanagedcare.  .me .ao~l:    . . . . . . . . . . . . . . . . . 
26

. . . . . . . . . . . . . . .
. . . . . . . . 
APPENDIx  26

A  Notes  . . . . . . . . . . 
. . . . . . . . . . . . . . . . . . . . . . . . ..O  . .
. . . . . . . . . . . . . . .  A-1
 INTRODUCTION 
PURPOSE 
This  study identifies  lessons  the  States  have  learned  in implementing  the  Medicaid  drug 
use  review  requirements  established  by Congress  in 1990. 
BACKGROUND 
State  Medicaid  programs  have  been  reviewing  the  outpatient  drug  use  of Medicaid 
beneficiaries  for many  years.  These  efforts,  while particularly  useful  in identifying  fraud 
and  other  illegal  activities,  have  been  piecemeal  and  incremental.  In  1990, the  Omnibus 
Budget  Reconciliation  Act  (OBRA  90) changed  the  picture  considerably.1  It required 
States  to take  a much  more  ambitious  approach  to Medicaid  drug  use  review  (DUR)  to 
ensure  better  patient  care  through  drug  therapies  that  are  appropriate,  necessa~,  and 
cost effective.  Specifically,  it required  States  to implement,  by January  1993, programs 
prospective  drug use review (pro-DUR)  and  counseling  by the  pharmacist  that  occur 
before  each  prescription  is dispensed  to help  ensure  appropriate  drug  therapy  for 
the  patient; 
retrospective drug use review (retro-DUR)  of pharmacy  claims  data  that  identify 
patterns  of physician  prescribing,  pharmacist  dispensing,  and  patient  drug  use that 
may be  inappropriate;  and 
educational  outreach  that  educate  providers  about  appropriate  drug  therapies. 
The  pro- and  retro-DUR  reviews  are  guided  by criteria  and  standards  adopted  by States 
as benchmarks  for determining  the  appropriateness  of drug  therapies  for particular 
conditions.  Prescription  claims  are  screened  against  these  benchmarks.  State  DUR 
boards,  composed  primarily  of physicians  and  pharmacists,  have  broad  responsibility  for 
reviewing  drug  review  criteria,  for guiding  the  reviews,  and  for directing  interventions  and 
other  educational  efforts  with pharmacists  and  physicians. 
The  States  have  faced  many  challenges  as they  have  struggled  with  mounting  their  DUR 
programs.  They  have  learned  some  important  lessons  along  the  way.  No one  State,  it 
seems  to us, serves  as a model  for how to implement  a program  from  beginning  to end. 
Yet,  we and  HCFAS Medicaid  Bureau,  with whom  we collaborated  in designing  this 
study, think  some  of the  lessons  learned  by the  States  can be  instructive  to other  States. 
In this report,  we focus  on these  lessons.  We intend  it to seine  as a resource  document 
offering  vignettes  of some  States  experiences  so far.  Although  it is not  a definitive 
assessment  of what  does  or does  not work, we expect  the  report  can  help  States  learn 
from  each  others  experiences  and  can  contribute  to their  developing  effective  DUR 
programs.  We  have  geared  the  report  not  to the  technical  specialists,  but  to those  State 
1 
  administrators,  legislators,  board  members,  and  others  who deal  with DUR  policies  more 
generally.  For  this reason,  we avoid  detailed  discussion  of the  technicalities  of the  review 
process. 
We begin  this report  by identifying  nine  major  lessons  that  have  been  important  in the 
States  early  implementation  efforts.  Some  lessons  apply  to both  prospective  and 
retrospective  components  of a DUR  program;  some  are  more  applicable  to one  than  the 
other.  All are  experiences  that  States  described  to us or to HCFA,  some  approaches 
may, in fact,  no longer  be  used.  We  begin  each  lesson  with a brief  introduction  that 
highlights  its importance  for the  States  overall  DUR  efforts.  Then,  for each  lesson,  we 
present  selected  vignettes  that  specify ways in which States  have  applied  the  lesson.  We 
conclude  the  report  by discussing  several  unresolved  issues that,  if left unresolved,  could 
undermine  States  DUR  programs  in the  years  ahead. 
MEZUODOLOGYMD  DEFINITIONS 
We  relied  on three  major  sources  of information  for this report: 
E  an examination  of the  literature  on drug  use review,  including  pertinent  research 
studies,  and  relevant  government  documents  such as the  OBRA  90 legislation,  its 
regulations,  and  States  own internal  reports  and  their  annual  reports  to HCFA, 
*  discussions  with many  State  and  Federal  DUR  officials,  including  participation  in 
three  national  meetings  of State  Medicaid  DUR  program  staff,  and 
E  on-site  visits to DUR  programs  in six States:  Colorado,  Illinois,  Iowa,  Maryland, 
Massachusetts,  and  Washington. 
The  vignettes  included  here  are  ones  that  appear  to have  potential  in multiple  States, 
although  we recognize  that  what  works well in one  State  may not work  so well in another. 
The  criteria  we used  in selecting  the  vignettes  were  rigorous  yet inherently  qualitative. 
They  included:  (1) the judgments  of the  Federal  and  State  officials with whom  we 
conversed;  (2) our  own review  of States  experiences  and  their  supportive  materials; 
(3) our  consultation  with  experts  having  substantial  experience  with DUR  efforts;  and 
(4) our  own judgment  of whether  a particular  approach  or item  is sufficiently  different 
and  important  to warrant  the  attention  of other  States  based  on our  own considerable 
experience  over  many years  in studying  pharmacy  issues.z 
We  conducted  this study in accordance  with the  Qz.uzZizSytandardfor Ihspec?ionsissued  by 
the  Presidents  Council  on Integrity  and  Efficiency. 
L  3 
  LESSONS  LEARNED  BY  STATES
Credible criteria provide  an essential foundation  to an ef$ective drug use review program. 
Physicians  and pharmacists  must  have confidence  that they are based on professional 
expertise, prior experience, and up-to-date  science-based  research.3  t2therwise, the rationale 
for  the effort is likeij  to be questioned  and compliance  undermined. 
Establishing  Guidelines for a DUR  Board.  State  DUR  boards  provide  a vital focal 
point  for ensuring  that  criteria  used  in pro- and  retro- DUR  efforts  are  credible. 
Many  of the  boards  have  become  active  in assessing  the  appropriateness  of the 
criteria  developed  by vendors.  Colorado  facilitated  such  an assessment  by 
developing  a checklist  for DUR  board  members  to use in reviewing  criteria  (see 
box). 
CHECKLISTFOR REVIEWINGDUR CRITERIA 
Amongthe questionsposedin Coloradoschecklistare the following: 
 Who developed the criteria?  Did they get outside reviewfrom practicing 
physiciansand pharmacists? 
 Howadequateistheliteraturereview?Whatare theirsources? Didtheylook 
for unlabeledusessupportedbyscientificliterature? 
o	 Howadequatelyistheliteratureinterpreted? Whatisthe qualityofthe 
evidence?Didtheychoosethemostor leastrestrictiveinterpretation? Did 
theylookforefficacyorcost-effectivenessstudies? Didtheyconsiderthe 
populationlimitsof particularstudies? 
 If a drug group is used for manyclinicalsubsets,are they explicitabout the 
domainofthe criteriaforeachsubset? Ifasubsethasdifferentdosageor 
durationrecommendationsforuseofa drug,isthisaddressedin eachcriteria? 
 For drug interactions,are the definitionsfor interactionand clinical 
significanceclear? Dotheynotethedosagesatwhichinteractionshavebeen 
documented? Dotheyconsiderthe sequenceofusingthe drugs? 
 Canuseofthe criteriasetassistreviewersin suggestingappropriatetherapy? 
Other drugs, therapeutic maneuvers, and/or other therapeutic modalities? 
4

. .    Obtaining Feedback  on Cfitetia.  Anopenprocess  alloting  widespread 
E 
participation  canpay  big dividends.  Itcanprovide  aDURprogram  with valuable 
insights  in developing  criteria.  It can  also foster  broad  acceptance  of the  resulting 
decisions.  Many  boards  have  moved  inthisdirection  byseeKng  and  drawing  on 
the  advice  of professional  associations,  medical  and  pharmacy  schools,  drug 
manufacturers,  and  individual  experts  in clinical  areas  under  consideration, 
The  process,  moreover,  can be  constructively  viewed  as a continuing  one,  involving 
feedback  not  only in developing  criteria,  but  also in reevaluating  them  over  time. 
The  Texas  program  offers  a good  case  in point.  It modified  its criteria  on the 
concurrent  use of two antidepressant  drugs  after  taking  into  account  physician 
responses  to its intervention  letters.  In those  responses,  physicians  whose  drug  use 
practices  were  being  questioned  complained  that  the  maximum  dosage  levels 
allowed  by the  State  were  too  low.  After  consulting  with  experts,  the  DUR 
program  officials  agreed  and  allowed  for higher  dosages  that  were  more  consistent 
with  current  thinking  about  appropriate  dosage  levels. 
Obtaining  feedback  on criteria,  whether  at the  outset  or after  implementation,  is 
no less important  for DUR  criteria  directed  to pro-DUR  than  to those  concerning 
retro-DUR.  This  is important  to note  because  pro-DUR  criteria  often  have  been 
applied  all at once,  with little  review  and  testing  and  with refinements  made  only 
after  numerous  provider  complaints. 
Facilitating  Feedback  through a Ballot  Process.  The  Virginia  program  used  a 
k	
mailed  ballot  to facilitate  reviews  by the  DUR  board  as well as by medical  and 
pharmacy  associations,  schools,  and  drug  manufacturers.  The  reviewers  received  a 
draft  set of criteria  for comment  together  with a preprinted  form  with  check  boxes 
for  responding  to questions  and  selecting  options.  The  form  also included  room 
for reviewers  to provide  narrative  comments.  Shortly  thereafter,  reviewers 
received  a second  ballot  of the  revised  criteria.  These  became  the  official  criteria 
if no other  comments  were  offered.  This  check  box, ballot  approach,  program 
officials  reported,  contributed  to more  consistent  and  thorough  feedback  and  to 
easier  synthesis  and  analysis  of reviewer  comments. 
J  Without  carefi.dplanning  DUR programs  can easily result in information  overtoad.  l%eir 
review of pharmaqy  claims  can generate extensive data that severe~  taxes the limited 
resources of the program  and  the good will of the practicing physicians  and pharmacists. 
Some  States run monthly  screens on all their criteria and produce  exceptions far  exceeding 
those that  they can address.  An  antidote  to such a condition  k  to gear the program  to 
relatively few  drug use criteria in clinically important  areas.  This applies to both  on-line 
prospective  DUR  efforts and to retrospective eflorts.  It is particularly  important for 
retrospective efforts, which seek to identifi  problems  after the fact  and  which call for follow-
up by program  stafi  to pursue  a more selective approach to applying established  criteria in 
order to avoid  the forernentioned  consequences  ;finfonnatzon overload. 
b	 Focusing  on Clinically Important  Areas.  What  bases  are  to be  relied  upon  in 
defining  clinically important  areas?  Wisconsin,  in developing  about 
20 retrospective  criteria,  used  the  following bases  to guide  its decisions: 
(1) indications  in the  clinical  literature  of frequent  misutilization,  (2) likelihood  of

misutilization  having  a significant  impact  on quality  of care,  and  (3) likelihood  of it

having  a major  impact  on Medicaid  expenditures.

Colorado,  in developing  the  eight  topics  or modules  that  guided  its retrospective

effort,  took  a somewhat  different  approach.  It, too,  addressed  cost  concerns  by

focusing  on drugs  that  represent  a disproportionate  share  of Medicaid  pharmacy

costs.  But  in addressing  quality  concerns,  it focused  on drugs with  high potential

for toxicity and  on the  use of medications  in high-risk  populations.  The  latter

included  drugs  taken  by pregnant  women  and  neuroleptic  drugs  taken  by the

elderly.

Screening  Paid Claims Strategically.  Among  the  approximately  20 criteria

developed  by Wisconsin,  it selected  1 to 3 each  month  for screening  against  paid

claims.  The  State  took  this approach  because  it wanted  to limit  the  alerts

identified  through  the  screening  process  to those  it could  reasonably  expect  to

follow up with intervention  letters  to the  providers.  With  a manageable  number  of

alerts,  it was also able  to produce  intervention  letters  that  were  tailored  to the

potential  inappropriate  drug use identified.

Colorado  followed  much  the  same  approach,  with a similar  rationale.  In its

screening  of paid  claims, it rotated  among  its eight  established  modules  (a ninth

was added  recently).  This meant  that  it was highly unlikely  that  any one  module

(for  example,  drugs  in pregnancy)  would  be  applied  more  than  once  in a year  and

might  well not  be  applied  for close to 2 years.

6

..  Washingtons  intent  to conduct  its retrospective  reviews  strategically  led  it to 
develop  what  ithascalled  theonion  approach.  Through  this approach,  the 
program  would  start  out by identifying  the  onion--asignificant  therapeutic 
concern  based  on analysis  of claims  data  that  surfaces  drugs  of high risk, high cost, 
and/or  high use.  Subsequently,  and gradually,  the  program  narrows  the  focus  of its 
analysis  by identifying  particular  layers  of the  onion  for further  screening  and 
review  (see  box). 
THE ONION APPROACI-k 
HIGH-COST ANTIBIOTIC SUSPENSIONS 
Through their screening efforts, Washington 
officials identified high-cost antibiotic 
suspensions as among the most frequently 
prescribed and most expensive drugs paid for 
by the Medicaid program.  Upon further 
review, they found that these drugs were 
being used frequently for treating otitis media 
(middle ear infection) in children.  This 
practice raised questions because  the States 
DUR  criteria  ranked  these suspensions  as the 
third  drug  of choice  for these children.  This 
led to further  screening  to identifi  the 
dimensions  of the problem--in  particular,  to 
identi$  the physicians writing  prescriptions 
for the suspensions,  their  patient  caseloads, 
and the volume  and type of prescriptions  they 
wrote.  These  data  formed  the basis for 
subsequent  analysis of prescribing  patterns 
and of patient  drug use.  Being selective in choosing and applying criteria k  essential, but in itself insufficient  in 
averting the dangen  of information  overload.  If States fail  to incorporate  highly specific 
problem  definitions  into the computer  algorithms thq  use to screen claims,  thty  are quite 
likely to generate  many false positives  and many  more alerts than  they or providers can 
reasonably  address.  Indeed,  expenencehas shown  thk  to be the case in States that  use 
broadly inclusive  definitions  (highly sensitive)  in their screening criteria.  In  one such  Statej 
the on-line prospective  DUR  system has been identifying alerts at the rate of 20 percent.  This 
means  that  one out of every five  electronic claims  that pharmacists  submit  result in an 
immediate  computerized  alert suggesting a possible problem  with the prescription.  In  another 
State,  the retrospective DUR  ystem  has been generating 50,000 alerts a month.  Of these, the 
program  has been randomly  selecting 1,500 to 2,000 for review to determine  #the  providers 
should  be contacted. 
F	 Reducing  the Number  of Unnecessary  On-Line  Prospective  DUR  Alerts.  During 
the  early  period  of its on-line  system, Pennsylvania  was experiencing  an  alert  rate 
of about  20 percent.  Too  many  of these  alerts  were  suspected  to be  false  positives. 
After  verifying  some  of the  alerts  as being  false positives,  the  State  took  action  to 
make  the  alerts  more  meaningful  and  to reduce  the  number  of alerts  to a more 
manageable  level  (about  10 p&-cent)  (see  box). 
EFFORTS TO REDUCE PRO-DUR  ALERTS 
Pennsylvania modified its screening criteria in three areas: 
	 Claims for children were often triggering minimum dose alerts.  Upon 
inquiry, the State found that the low-dose edits, which had been 
developed for adults, were being applied to children.  It decided to bypass 
them for childrens prescriptions. 
	 The minimum/maximum dosage screens for topical medications, such as 
ointments, were generating many false positive-alerts.  The State dropped 
them in these instances because they were irrelevant. 
	 The computerized algorithm concerning therapeutic duplication for 
psychotherapeutic drugs was generating too many unnecessary alerts.  The 
State tightened the problem definition so that alerts have been generated 
only if the prescriptions involve different pharmacies or different 
physicians. 
8
 Virginia  contributed  to a reduction  of DUR  alerts  by deleting  all the  low-dose  edits 
and  by keying alerts  on drug-drug  interactions  to only the  two most  serious  levels 
of clinical  significance  identified  in the  criteria. 
Illinois  also  eliminated  low-dose  edits  as a way of removing  clinically insignificant 
information  from  its system  and  of reducing  its prospective  DUR  alert  rate.  It 
found  that  such edits were  often  being  triggered  by the  common,  acceptable 
prophylactic  use  of antibiotics  1 or 2 days before  a surgical  or dental  procedure. 
Texas  sought  to avoid  the  start-up  problems  other  States  have  experienced  with 
their  on-line  systems by conducting  extensive  pilot  testing  to ensure  that  the  alerts 
generated  by its system were  significant  ones.  It involved  nearly  80 pharmacies  in 
this effort. 
	 Containing the Number  of Retrospective  DUR  Alerts.  In actuality,  a high-
specificity  approach  is one  that  will tend  to give a physician  the  benefit  of the 
doubt  in borderline  cases.  For  example,  as a representative  of the  Colorado 
program  noted,  this might  mean  that  in cases where  a blood  level might  ideally  be 
monitored  within  2 weeks  of starting  a drug,  the  screening  criterion  might  allow a 
month  to go by before  generating  an alert. 
In the  same  context,  Wisconsin,  once  it identified  alerts  concerning  its criterion  for 
H2  antagonists  (a class of drugs  for treating  ulcers),  would  not  send  an intervention 
letter  to a provider  unless  he/she  had  alerts  generated  for at least  three  patients 
during  the  6-month  review  period.  In its FY  1993 annual  report,  it elaborated  that 
such  a threshold  was established  to identify  potential  patterns  of drug  use 
practices,  improve  the  cost-effectiveness  of the  intervention  and  reduce  practitioner 
and  pharmacist  aggravation  caused  by frequent  receipt  of DUR  letters. 
F	 Relying on the Computer  to Trigger  Intervention  Letters.  Applying  criteria  with a 
high degree  of specificity  can minimize  the  need  for a review  panel  to review  each 
alert  to determine  if an intervention  letter  should  be  sent.  But we found  only one 
State,  Wisconsin,  that  actually  eliminated  that  review.  Except  for a brief 
administrative  review  to identify  any programming  errors,  it relied  on the  computer 
to identify  the  alerts  and the  interventions.  The  rationale  was that  this  approach 
reduces  the  subjectivity  associated  with manual  reviews  and  minimizes  the  lag time 
between  identification  of alerts  and  intemention  with  the  provider. 
9
 A  DUR program  offers a prime  oppo~nity  to identijj  patterns  of questionable  practices,  be it 
by patients  or by providers.  l%rough retrospective reviews, which  can draw on paid  claims 
data  as well as on the record of computerized  alerts generated  by prospective  on-line  review 
systems, a State  can examine  drug use longitudinally.  It can profile  the drug use practices  of 
patients,  encompassing  the various physicians  andior pharmacies  they visit and  encompassing 
various drug use categories and/or disease states.  It can also profile  the prescribing practices 
of physicians  and the dispensing practices  of pharmacies,  focusing  on patients  served over a 
period  of time  and on various drug categories and/or disease states.  The information 
obtained  through such pattern  analysis can be of major  value in directing interventions  to 
providers  or patients  warranting serious attention.  And,  not least of all, it can offer 
compelling  evidence  of the need for such  attention. 
	 Establishing a Broad  Relational  Data  Base.  A necessary  starting  point  for useful 
pattern  analysis  is establishing  a sufficiently  inclusive  data  base  that  links key data 
elements.  Colorado,  for instance,  has developed  a relational  DUR  data  base  that 
incorporates  information  on diagnosis,  procedure,  hospital  stay, patient 
demography  and  history,  prior  authorization  request,  provider,  and,  most  recently, 
Medicare  crossover  data. 
Illinois has incorporated  into  its medical  history  file of Medicaid  beneficiaries  the 
alert  information  generated  from  its on-line  prospective  DUR  system.  This  adds  to 
the  retrospective  program  valuable  additional  information  in profiling  not  only 
prescribing  practices  but  also dispensing  practices. 
  Developing  Patient  Profiles.  This  is the  most  common  type  of pattern  analysis 
conducted  by State  DUR  programs.  It serves  to identify  patients  who may be 
experiencing  drug  therapy  problems  due  to their  visiting multiple  physicians  and/or 
pharmacies.  More  often,  it serves  to identify  individual  physicians  who may be 
prescribing  inappropriately. 
Massachusetts  has found  it helpful  to append  a detailed  patient  history  profile  to 
the  intervention  letters  it sends  to physicians.  For  instance,  in a recent  letter  to a 
physician,  it identified  two drugs  that  the  physician  had  prescribed  for a patient  on 
a chronic  basis,  contrary  to standard  practice  to use them  on a short-term  basis. 
The  attached  two-page  patient  profile  identified  all drugs  prescribed  for the  patient 
over  a period  of about  14 months;  the  strength,  quantity,  and  days-to-refill  for each 
drug;  the  pharmacies  and  physicians  involved;  and  the  various  diagnoses  made. 
Easy-to-read  summary  information  highlighted  the  two interacting  drugs  and 
indicated  that,  in the  review period,  the  patient  had  seen  two physicians  and  used 
five pharmacies. 
10
 Developing  Provider  Profiles.  Washingtons  initiative  on high-cost  antibiotic 
suspensions  focused  on the  development  of physician  profiles.  The  State 
screened  claims to identify  physicians  prescribing  the  high-cost  antibiotic  for 
children  who were  younger  than  8 years  of age  and who had  a diagnosis  of 
otitis  media,  to determine  the  volume  and  range  of the  antibiotics  these 
physicians  prescribed  for this diagnosis;  and  to identi~  the  geographic 
location  of their  practices.  Once  it aggregated  these  data,  it revealed  the 
following  patterns: 
Forty-five  percent  of the  prescriptions  for these  high-cost  drugs were  written 
by 124 (6 percent)  of those  physicians  prescribing; 
Of all the  high-cost  antibiotic  prescriptions  written  by these  124, 20 percent 
of them  were  written  by 24 of these  physicians. 
The  heaviest  prescribing  of these  drugs  occurred  in three  areas  of the  State. 
Colorado  has regularly  developed  physician  (and  patient)  profiles  to help  its review 
committee  determine  whether  to send  an intervention  letter  to a physician  and  to 
help  a physician  receiving  such a letter  understand  the  rationale  behind  it.  The 
following  profile  developed  for a physician  specializing  in family practice  illustrates 
this:  over  a period  of 1 year,  he prescribed  drugs  for 50 patients  in the  review 
category.  Of these  patients,  7 were  categorized  as having  a total  of 12 hazard 
problems  because  of their  drug  therapy,  with none  of the  problems  falling  in the 
most  serious  of the  3 hazard  categories.  For  five of these  seven  patients,  the 
appropriateness  of the  drug therapy  was questioned  because  the  diagnosis  was 
unclear  and  for two because  the  dosages  used  were  contrary  to the  States  drug  use 
criteria.  A graph  on the  provider  profile  indicated  how this physician  compared 
with  his peers  (other  specialists  in family practice)  in terms  of the  number  of 
prescribing  problems  identified. 
b	 Developing  Nursing Home  Profiles.  In Wisconsin,  where  about  one-third  of all 
Medicaid  prescriptions  have  been  for nursing  home  residents,  the  State  for the  past 
8 years  prepared  summary  reports  of nursing  home  drug  use.  The  report,  sent 
semi-annually  to  each  nursing  home,  included  a number  of measures  of drug 
quality.  Each  home,  which was peer  grouped  according  to the  primary  medical 
conditions  of its residents,  received  data  comparing  it with its peers  for  each 
measure.  The  thrust  of the  effort  was educational.  With  the  information  provided, 
each  nursing  home  could  examine  how its pattern  of drug  therapy  compared  with 
that  in other  homes  having  similar  populations  and with its own prior  practices. 
11
 l%e basic data  that DUR programs depend  on emerge from  the screening of claims.  This 
screening process typically focuses  on therapeutic  categories andJor disease states for  which  the 
State  has developed  DUR  criteria.  And  it is aimed  at the identification  of problems,  such  as 
drug-dreg interactions,  drug-disease contradiction,  and therapeutic  duplication.  How 
effectively  these problems  are then addressed can be greatly in.uenced  by the ways in which 
the data  obtained fi-om the screens are presented  to Medicaid  agency officials,  to the DUR 
Board,  and perhaps  most  importantly,  to the fi-ont-line providers who are prescribing and/or 
dispensing drugs.  Eflective  presentation  calls for meanin@d  contex~ not just  raw numbers. 
Such context  k  aflorded, for  example,  when providers pe~onnance  k  displayed  over a period 
of time  andior is compared  to the pe~ormance  of peers.  Such  context  k  also afforded  when 
the number  of alerts generated  by the screening process is displayed along with the number  of 
claims  and patients  reviewed for pa~cular drug categories and problem  types. 
b	 Encouraging  Change  through Peer  Comparisons.  Consider  as a case  in point  a 
sample  summary  profile  report  sent  to a Wisconsin  nursing  home.  This  report, 
which  is for a facility classified  in a geriatric  peer  group,  begins  with basic 
background  information  comparing  the  facility to others  in the  peer  group  in terms 
of the  age  of beneficiaries,  the  level  of care  they receive,  and  their  main  diagnoses. 
Then  it provides  drug use information  for  47 drugs  or categories  of drugs,  using 
an  * to designate  any situation  where  the  facility is greater  than  2 standard 
deviations  over  the  peer  group  average.  Following  are  a few examples: 
PEER  COMPARISONS  DRUG  USE IN NURSING HOMES 
Drug Group  %  of Recipients  $$/Reeipient  Rx/Recipient 
H2 Antagonists 
Your  Facility  32.7*  $238  4.6 
Peer  Group  Average  15.4  $222  4.2 
ConcurrentUseof NSMIDs 
andH2Antagonists 
Your  Facility  10.2  $433  9.0 
Peer  Group  Average  2.9  $273  6.3 
B-12 lZtamins 
Your  Facility  18.1*  $37  5.6 
Peer  Group  Average  4.0  $19  2.8 
12
 Clearly,  in this case,  the  data  display  encourages  the  nursing  home  leadership  to  ask 
why so many  more  of its residents  are  on H2  antagonists  and  B-12 vitamins  than 
residents  of other  homes.  The  implication  is not  that  the  home  should  necessarily 
change  its practices,  but  rather  that  it should  at least  confirm  for itself  the 
appropriateness  of its practices  if it does  not  change  them. 
Another  example  of the  use of peer  group  comparisons  is the  letter  that  Washington 
sent  to the  top  24 users  of antibiotic  suspensions  in treating  children  with  otitis  media. 
Each  letter  included  a table  that  profiled  the  physicians  prescribing  pattern  over  the 
course  of a year  in treating  such children  and,  where  possible,  comparing  it with  other 
physicians  in the  State.  It gave  particular  attention  to a costly drug  (we call it 
Drug  X) that  was not  the  States  first drug  of choice  under  its DUR  criterion. 
Following  are  excerpts  from  the  table  sen~ to one  physician: 
PEER COMPARISONS: 
ONE  PHYSICIANS  USE  OF HIGH-COST  ANllBIOTICS 
PrescribingPattern  Your Practice  Peer Average 
Ranking  amongst  prescribers  on  #1 
total  number  of RX for Drug  X 
Number  of patients  treated  under  600 
age 8 
Number  of patients  with otitis  media  205 
% of otitis  to total  clients  48%  28?40 
?4.  of Drug  X to total  antibiotic  drugs  4770  31% 
% of Drug  X for otitis  compared  to all 
antibiotic  RX  for otitis  73%  58% 
Number  of times Drug  X only was used  137 
Number  of times  1 other  RX was used 
before  Drug  X  20 
Number  of times  2 or more  RX used 
before  Drug  X  6 
Number  of times  Drug  X was used first 
and then  another  RX was tried  42 
13
 >	 Assessing the Effects  of Prospective  DUR  Alerts.  Maryland  started  its on-line 
pro-DUR  program  in Janua~  1993.  From  the  beginning,  it has produced  a 
monthly  report  summary  of the  on-line  alerts  generated  to pharmacies  in 
response  to claims  they  submitted  electronically  for payment.  These  reports 
distinguish  pro-DUR  alerts, which represent  advisory  information  to a 
pharmacy,  from  Early Refill  Alerts,  which represent  a claim  denial  unless  the 
State  overrides  the  denial  upon  appeal  from  the  pharmacy. 
Following  is information  from  Marylands  1993 annual  report  to HCFA: 
COMPARISONS  OVER  TIME  CLMW?JPRO-DUR  ALERTS 
Month  Total Claims  Pro-DUR  Early Refill  All Alertsas 
Alerts  Alerts  %Ofclainls 
Total  IoNot Filled  TotaI  %  Overridden 
by State 
Jan  311,593  51,243  41.9  11,421  14.5  20.1 
Feb  30~381  46,614  28.5  1Q521  14.6  18.6 
Mar  39~132  49,387  1.3  15,102  14.3  16.2 
Apr  325,182  64,458  23.4  13,621  16.7  24.0 
May  325,372  49,986  6.9  16,281  15.8  20.4 
Jun  318,442  41,114  1.8  12,757  16.2  16.9 
Jul  308,065  42257  7.9  12,354  1%2  17.7 
Aug  384,928  53,594  6.6  16,603  17.9  18.2 
Sep  31~691  42,661  2.1  12,682  16.9  1%4 
Ott  335,197  43,155  1.7  14,652  15.8  17.2 
Nov  408,667  49,212  1.6  16,836  17.5  16.2 
Dec  343,636  45,255  1.4  14,705  16.3  IZ4 
These  monthly  reports  offer valuable  perspective  to the  DUR  board  and  to the 
Medicaid  agency  leadership.  Most  pointedly,  they  show that  early  in the  first 
year  of implementation  pharmacies  often  responded  to the  nonmandatory  alerts 
by not  filling a prescription;  but,  by years  end,  they had  settled  into  a pattern 
where  they  seemed  to pay little  attention  to these  alerts.  Throughout  the  year, 
the  level  of all alerts--mandatory  and  nonmandatory--remained  quite  steady  in 
the  16-17 percent  range,  as did the  level  of State  overrides  of early  refill  alerts. 
14
 l%e essence of DUR programs ii to improve the prescribing and dispensing practices  of 
providers.  To do that,  the programs must  intervene--whether  through letters, telephone 
dticussions,  orpemonal  visits--in ways that influence providers to change their practices, 
where necessa~,  for  the long term.  Even  # States do everything else well, the overall DUR 
effort can fail  if the programs lack an effective  intervention  strategy.  The challenge  to 
State DUR programs  has been to adopt  approaches  that are feasible,  yet  effective  in 
getting the attention  of providers and motivating  changes in their prescribing behaviors. 
b	 Designing Compelling Letter  Interventions.  Sending  letters  to those  with 
questionable  practices  is the  most  common  intervention  of retrospective  DUR 
programs.  It is also one  that  can be  easily dismissed  by providers  unless  States 
carefully  tailor  their  approach,  Montana  has personalized  its letters  to 
physicians  and  pharmacists  and  included  specific  information  about  the  patient 
in question  (such  as a claims-constructed  medical  history)  and  suggestions  for 
drug  therapy  alternatives.  The  letters  bear  the  signature  of the  medical  director 
of the  Montana/Wyoming  Foundation  for Medical  Care,  the  Medicare  Peer 
Review  Organization,  which  contracts  with the  State  for the  DUR  education 
program. 
Some  States  write  physicians  not  only about  particular  patients,  but  also  about 
the  physicians  own prescribing  practices.  Recently,  700 physicians  in 
Pennsylvania  received  packets  of information  about  their  prescribing practices 
-. 
for H2  antagonists  (see  box). 
ALETfERINTERVENTIOTNOPhysicians 
ThepacketssenttoPennsylvanpiah ysicianwsi thquestionablper escribinfgo rH2antagonistisncluded 
o  A personalizelde ttersignedbythePresidenotfthePennsylvanMiaedicaSlociety(PMS); 
o  A 12-monthprofileofthepatientdsruganddiagnosihsistorythatidentifietsheprimaryand 
secondartyherapeuticproblemsandcitesrelevanrteferenceisnthemedicallheratur~ 
o  ReprintsofrelevanatrticlesappearinginrecentmedicajlournalsincludintgheStatemenotfthe 
NationaIlnstitutesofHealthConsensuCsonference; 
o	 A one-pagem, ulti-colorefdly erforphysiciantos returnto PMSrequestingadditionagleneral 
informationp,r ofessionaclo nsultatiown itha clinicaplharmacisotnthePMSstaff,orlaminatedwail 
chartsorpocketcardsforeachofninecommonluys eddrugclassesincludintgheH2antagonists. 
15(cid:1)
  The  letters  came  from  the  Pennsylvania  Medical  Society, which  runs  the  DUR 
education  program  for State  Medicaid  agency.  Both  agencies  believe  this 
arrangement  enhances  the  credibility  of the  educational  interventions  with 
physicians. 
Both  Montana  and  Pennsylvania  include  RSVP forms with  their  intervention 
letters  for the  physicians  to reply  to the  drug  therapy  issue in question. 
Pennsylvania  has  sent  follow-up  letters  via certified  mail to those  physicians  not 
responding  to the  initial  letter.  These  States  have  reviewed  the  immediate 
RSVPS from  the  physicians  and  have  followed  up with subsequent  claims 
analysis  after  6 months,  even  1 or 2 years  later,  to see the  extent  to which  the 
intervention  influenced  long-term  changes  in the  physicians  prescribing 
behavior. 
	 Investing in Personal  Interventions.  These  types  of interventions,  whether 
telephone  discussions  or personal  visits, are  costly and  labor  intensive.  States 
use  them  more  selectively  than  letters. 
Both  physicians  and  pharmacists  in Illinois can receive  telephone  calls from  the 
DUR  programs  consulting  pharmacist  or physician.  In recent  months,  the 
State  has identified  about  50 patient  cases  a month  for this type  of intervention. 
It selects  the  cases  from  its retrospective  profiling  efforts  as well as from 
information  generated  by its pro-DUR  help  desk  staffed  by pharmacists.  The 
cases  typically will be  those  revealing  some  inconsistencies  in the  case 
management  of patients;  often  they will involve  patients  who have  visited 
multiple  pharmacies  and/or  physicians,  The  conversations  serve  as a useful 
vehicle  for obtaining  feedback  from  providers,  for clarifying  drug  therapies,  and 
for  conveying  the  priorities  and  concerns  of the  State  DUR  program. 
The  Massachusetts  DUR  program  has regularly  used  face-to-face  meetings  with 
providers.  It routinely  profiles  physicians  to identi~  those  warranting  a more 
personal  educational  intervention.  The  profiling  focuses  on their  prescribing 
patterns  in five therapeutic  drug  classes,  such as anti-ulcer  drugs,  broad-
spectrum  antibiotics.  The  program  then  compares  the  individuals  prescribing 
patterns  with expected  patterns  for each  drug  class.  A personal  intervention 
may be  chosen  for those  who deviate  from  the  expected  pattern,  who  see  a 
significant  number  of Medicaid  patients,  and whose  prescribing  patterns  suggest 
that  even  small  changes  would  significantly  improve  the  quality  and  cost-
effectiveness  of their  prescribing.  Pharmacists  working  under  contract  with  the 
DUR  program  conduct  the  counterdetailing  visits.  They  completed  about 
100 visits last year. 
16
 Counseling patients  in the pharmacy  when they fill  their prescriptions  can be an effective 
way to foster  appropriate use of drugs.  For that reason, most  States have mandated 
counseling  and other pro-DUR  requirements for  all patients, 4 not just for Medicaid 
beneficiaries  as the Federal government  requires.  Yet pharmacists  confront  many 
obstacles to providing  counseling:  insufficient patient  information,  difficulties 
communicating  with physicians,  inadequate  clinical pharmacy  skills, and limited 
reimbursement  for clinical services.5 And  State pharmacy  boards, which  typically monitor 
compliance  as part  of their periodic  on-site inspections,  have dificulty  verijjing  whether 
pharmacists  are actual~  canying  out the counseling requirements. 
	 Assessing Counseling Practices  By Shopping.  Pharmacy  board  inspectors  in 
Washington  shopped  pharmacies  to assess compliance.  Presenting  themselves 
as patients,  the  inspectors  visited  108 randomly  selected  pharmacies  to fill a 
prescription  for an anti-hypertensive  drug.  Fifty-nine  percent  of the  pharmacies 
provided  these  patients  with either  written  or verbal  information  about  their 
prescription.  In half the  pharmacies,  the  patients  also purchased  an  over-the-
counter  asthma  medication  that  is contraindicated  for concurrent  use with  the 
anti-hypertensive  drug.  In these  instances,  about  one  in four  pharmacies 
warned  the  patients  against  using the  two medications  together.  The 
pharmacy  board  used  the  results  as baseline  data  on counseling  practices.  The 
study  also spurred  the  board  and  the  pharmacists  association  to work  together 
to identi&  approaches  for ensuring  that  pharmacists  receive  further  training  on 
counseling  requirements  and  techniques. 
F	 Surveying Practices  By Mail.  The  Virginia  DUR  program  surveyed  a random 
sample  of Medicaid  pharmacy  providers  about  clinical/cognitive  services.  The 
sumey  was conducted  in 1992 before  implementation  of the  on-line,  pro-DUR 
system.  Thus,  the  survey provided  useful  information  to the  DUR  program 
about  the  extent  of prospective  DUR  services  being  offered  across  the  State 
and  about  the  obstacles  hindering  pharmacists  from  complying  more  fully with 
the  requirements. 
The  Colorado  DUR  program  surveyed  beneficiaries  participating  in the 
Medicaid  Primary  Care  Physician  Program.  It posed  questions  concerning  the 
type  of pharmacies  used by the  beneficiaries  and  the  nature  of the  services 
provided  by pharmacists. 
	 Warning  Violators.  Texas  has been  one  of the  few States  to have  taken  more 
punitive  actions  against  pharmacies  for violations  of counseling  requirements. 
The  pharmacy  board  issued  nearly  100 warning  notices  last year  for violations 
of rules  governing  prospective  DUR.  Inspectors  noticed  these  violations  during 
17  the  periodic,  on-site  inspections  of pharmacies.  Though  these  warnings  have  not 
been  formal  disciplinary  actions,  the  pharmacies  had  to respond  to the 
pharmacy  board  within  30 days about  how the  violations  were  to be  corrected. 
The  board,  in turn,  has followed  up with unannounced  visits to some  violators 
to  check  whether  they have  come  into  compliance. 
The  Texas  pharmacy  board  follows a somewhat  different  process  for those 
pharmacies  for which it receives  complaints  about  lack of counseling.  In these 
instances,  the  board  has  sent  the  pharmacy  a certified  warning  letter  reminding 
the  pharmacy/pharmacist  of the  pro-DUR  and  counseling  rules.  A second 
complaint  triggers  an investigation,  which  may involve  an undercover  operation 
in which  investigators  pose  as patients.  The  board  has initiated  three 
disciplinary  actions.  One  case  resulted  in a $1500 fine;  two cases  are  pending. 
The  board  has said it is prepared  to take  stronger  actions  ranging  from  larger 
fines  to possibly  license  suspensions  or revocations. 
F	 Sanctioning Pharmacies.  The  Iowa pharmacy  board  formally  sanctioned  three 
pharmacies  for reasons  that  include  failure  to provide  effective  counseling.  It 
revoked  the  license  of one  pharmacy  and  closed  another  completely.  Each  case 
involved  multiple  violations  of pharmacy  and/or  controlled  substance  laws, 
including  a lack  of counseling  or inappropriate  counseling.  The  board  also 
levied  two $25,000 fines on a single pharmacy.  The  first fine resulted  from 
dispensing  errors  and  lack of counseling  and  drug  use reviews.  The  second  fine 
resulted  from  the  pharmacy  having violated  their  probation  from  the  first fine 
and  for  other  dispensing  errors.  The  pharmacy  board  has been  pursuing 
sanctions  against  other  pharmacies  as well.  These  cases have  come  to the 
boards  attention  through  complaints  from  consumers  and  pharmacists. 
18
 State  agencies emphasize  that DUR programs are intended  to be educational  in nature. 
l%ey reinforce thk  message in their interventions  with individual providers  identified for 
some  questionable  practice. They can convey this message as well through educational 
outreach  to the la~er  communi~  of practicing physicians  and pharmacists.  Broadly 
directed, proactive  outreach  can alert providers to potential  problems  in drug therapy, 
provide  them  with information  on how to address those problems,  and, in so doing  have 
significant preventive  value. 
F	 Mailing Special Messages.  Kentucky  has been  developing  Therapeutic 
Algorithms  with input  from  Medicaid  physicians  and  pharmacists,  academics, 
and  professional  organizations  across  the  State.  It recently  sent  to all Medicaid 
providers  the  first algorithm  for treating  acute  urinary  tract  infections.  The 
State  views this process  as an educational  approach  that  can improve  patient 
care  and  reduce  Medicaid  costs; use of the  algorithms  is not  mandatory.  Topics 
for these  algorithms  focus on diseases  that  affect  many  Medicaid  beneficiaries, 
cost the  program  substantial  sums of money,  and  reflect  considerable  variation 
in treatment  approaches.  Others  will deal  with pain  management,  otitis  media, 
and  hyperlipidemia.  Outcome  analyses  will assess the  effectiveness  of this 
approach. 
Medicaid  providers  in Colorado  received  guidelines  for evaluating  and  treating 
insomnia  through  the  Medicaid  Pharmacy  Newsletter.  The  guideline  described 
various  behavior  modification  techniques,  types  of benzodiazepine  drugs  and 
their  characteristics,  and  a process  for discontinuing  hypnotic  therapy  with  a 6-
week  schedule  for tapering  dosages. 
Other  States,  including  Virginia,  Washington,  and  Pennsylvania,  make  regular 
use  of newsletters/journals  of the  professional  associations  or the  State 
Medicaid  agencies  themselves  to make  educational  information  broadly 
available  to providers.  These  approaches  target  only Medicaid  providers  in 
some  instances;  in others,  the  publications  reach  a broader  audience  of 
associations  members. 
	 Training  and Consulting for Providers.  Several  States  have  been  targeting 
special  groups  of providers  for specific  training  on drug  therapy  issues. 
.	 The  Pennsylvania  Medical  Society, under  contract  with the  Medicaid 
agency,  has been  leading  seminars  for hospital  staff in those  areas  of the 
State,  such as Pittsburgh  and  Philadelphia;  that  have  many  Medicaid 
beneficiaries.  It has also sponsored  free,  day-long  seminars  for 
19  physicians  onpresctibing  therapies  forminori~  patients.  Some  training 
activities  are  offered  with Continuing  Medical  Education  credits  as 
incentives  to physicians  to participate. 
.	 Vermont  has conducted  special  seminars  for the  residents  in training  at 
the  University  of Vermont  Medical  Center.  The  retrospective  reviews 
were  generating  many  alerts  that  the  DUR  staff were  able  to associate 
with the  hospitals  residents.  A DUR  board  member,  who is also  a staff 
pharmacist  at the  medical  school,  collects  these  alerts  and  periodically 
discusses  them  with the  students. 
.	 Wisconsin  has trained  pharmacists  and  nurses  in long-term  care  facilities 
about  identification  and  treatment  of depression  in the  elderly. 
.	 Pennsylvania  operates  a toll-free  telephone  line  at the  Medical  Society 
for inquiries  about  drug  therapies  from  providers.  A clinical  pharmacist 
is available  for consultation  as well, 
F	 Cx.mnecti.ngThrough  the Information  Superhighway.  At least  two States  are 
examining  the  potential  for reaching  large  numbers  of providers  through 
automated  information  systems. 
Washington  has long used  an automated  bulletin  board  system  for

communicating  with Medicaid  physicians;  more  recently  it has been  available  to

pharmacists.  Listings  include  policy memoranda,  billing instructions,  physician

provider  numbers,  the  Medicaid  drug formulary,  and  information  on new  drug

products.  Review  criteria  may well be  added  after  they  are  updated  in  1995.

Iowa is exploring  ways to tap  into various  telecommunications  systems

available  in the  State.  A state-wide,  fiber  optic  network,  capable  of

transporting  interactive,  two-way audio,  video,  and  data  signals, is now up  and

running  for various  educational  purposes.  And  the  University  of Iowa,  too,  has

a telemedicine  capability  that  may be  a cost-effective  mechanism  useful  to the

DUR  program  for sharing  information  with physicians  and  pharmacists  across

the  State.

20
 A  relative~  limited  knowledge  base is available  to he~  guide DUR  boards and State 
ojficials.  l%us, it is veiy important for  States to incorporate applied research efforts into 
their DUR programs  to help them  operate efficiently  and effectively.  Ideally, results from 
research based on operating expenencescould  (1) inform  deckions  about  criteria, 
screening strategies, interventions,  and the like, and  (2) ofler oppotiunities  for 
disseminating  and discussing the results with the professional  communities. 
b	 Evaluating  Screening  Criteria.  Maryland  uses its DUR  Analytic  Reports  to 
assess  the  effects  of~ts  pro-DUR  sc~eening criteria.  These  reports  focus  on the 
frequency  of criteria  ex~eptions  over  a 10-~3 month  period.  First  the 
exceptions  are  aggregated  by drug  class (e.g., H2-receptor  antagonists)  and 
then,  within  each  drug  class, criteria  element  (e.g., therapeutic  duplication, 
adverse  drug-drug  interactions,  etc.).  The  data  are  presented  in tables  and 
graphs  together  with a narrative  that  highlights  concerns  and  recommendations 
for  action  (see  box for  excerpts  from  one  report). 
DUR ANALYTICREPORT  ANGIOTENSINCONVERTING 
NOV  93- AUG  94  ENZYME  INHIBITORS  (ACEJS) 
criteria  Total  Total  #  Exceptions 
#  l&ceptions  per 100 Rx 
I& 
Drug-drug  all ACEIs  94,831  2,096  2.21 
interaction 
lithium  benazepril  2,135  103  4.82 
m  ~z  :::  ::  ::-
RECOMMENDATIONS: 
o  The  criteria  K+  supplements  without  K+  wasting diuretics  is not implementable  by 
prospective  DUR.  A message could be added  to a K+ supplement  criteria  that  states  check to 
be sure  patient  is also taking  a K+  wasting diuretic  or, alternatively,  this criteria  element  could 
be Witched  off. 
o  Finally,  benazepril  occurs as an outlier  in virtually  every criteria  element  (Note:  not  all 
criteria  included  here)  analyzed.. .All benzepril  criteria  should  be checked  to ensure  correct 
implementation  and to determine  if there  is something  specific about  benazepril  that  would  make 
its use unusual  when compared  to other  ACE  inhibitors. 
21

  The  DUR  board  relies  on these  Analytic Reports  when  deciding  whether  or 
not  to change  the  criteria,  whether  to modify  their  implementation,  or whether 
to pursue  educational  interventions  with providers. 
	 Assessing Alerts by Practice  Setting.  Iowas Drake  University  used  DUR  data 
to examine  therapeutic  screen  failures  by geographic  location  of the  prescriber. 
The  profiles  from  a group  of prescribers  whose  drug  regimens  failed  the 
computerized  therapeutic  and  utilization  criteria  screens  were  compared  with  a 
control  group  of prescribers  whose  profiles  passed  the  screens.  The  study 
concluded  that  prescribers  located  in more  rural  settings  were  more  likely to 
fail the  criteria  screens  and  that  patients  in nursing  homes  were  more  likely to 
receive  inappropriate  prescriptions. 
	 Identi&ing Physician Preferences.  The  Pennsylvania  Medical  Society,  under 
contract  with the  Medicaid  agency  to run  the  educational  component  of the 
DUR  program,  spent  its first year  researching  the  views of practicing  physicians 
across  the  State.  It conducted  nearly  a dozen  focus groups  and  surveyed  nearly 
3,000 randomly  selected  physicians.  The  Society  asked  physicians  for 
suggestions  and  ideas  about  how it could  best  convey information  about 
appropriate  drug  therapies,  how it could  intervene  effectively  with  them,  and 
which  topics  and  therapies  were  of most  interest  to them.  This  research 
informed  the  strategies  developed  for the  DUR  educational  program. 
	 Examinkg  the Effectiveness  of Interventions.  One  research  project  in 
Colorado  focussed  on approaches  for improving  physicians  awareness  of the 
costs  of various  nonsteroidal  anti-inflammatory  drugs  (NSAIDS),  commonly 
used  for treating  arthritis.  The  goal was to increase  the  use of the  low-cost 
NSAIDS in uncomplicated  cases.  The  intervention  group  of physicians  received 
letters  together  with individual  practice  profiles,  comparison  data  with  peers, 
and  cost information  for the  various  NSAIDS.  The  control  group  of physicians 
received  no information  on their  NSAID  prescribing.  The  follow-up  analysis 
indicated  that  the  intervention  group  reduced  the  cost of their  NSAID  therapy 
more  than  did the  control  group.  Researchers  concluded  that  receiving 
detailed  information  was a significant  influence  in changing  physicians 
prescribing  practices. 
Wisconsin  evaluated  the  effectiveness  of letters  with  different  provider  groups 
in reducing  the  use  of an antiplatelet  agent.  Researchers  sent  letters  to 
physicians  only in one  group,  to pharmacists  only in a second  group,  and  to 
both  pharmacists  and  physicians  in a third  group.  Post-intervention  analysis 
compared  outcomes  among  these  groups  and with a control  group  who had  no 
intervention.  The  research  confirmed  that  sending  letters  to both  physicians 
and  pharmacists  was significantly  more  effective  in reducing  use  of the 
antiplatelet  agent  than  sending  letters  only to physicians  or to pharmacists. 
22
 MAJOR  CHALLENGES  FACING  STATE 
DUR  PROGRAMS 
one  of the  often-mentioned  tenets  of American  federalism  is that  State  governments 
can  serve  as laboratories  for experimentation.  This  certainly  has been  the  case  for 
State  DUR  programs,  Moving  ahead  in largely  uncharted  territory,  States  have  been 
crafting  many  different  approaches  to DUR  and  have  been  learning  from  their 
experience.  Through  this report,  we attempt  to increase  awareness  of some  of the 
major  lessons  they  have  learned. 
We  can  not  close,  however,  without  also discussing  some  concerns  we have  identified 
about  the  current  state  of DUR  programs.  In so doing, we draw  on our  considerable 
experience  in examining  DUR  issues over  many years  and,  more  specifically,  on 
obse~ations  we made  and  comments  we heard  during  our  inquiry  for this study.  We 
raised  these  concerns  at a recently  held  symposium  on Medicaid  DUR  issues  that 
involved  representatives  from  most  States  and  received  considerable  feedback 
reinforcing  their  importance.G  They  present  challenges  that,  if not  addressed 
adequately  by State  and  Federal  leadership,  could  undermine  the  effectiveness  of 
DUR  programs  in the  years  ahead.  We present  them  here,  in the  form  of questions, 
with the  intent  to stimulate  thinking  about  how they  might  be  constructively  addressed. 
Privacy safeguards. 
ti  Do  the programs ~veadequate  attention  to privacy safeguards? 
The  widespread  use  of electronic  claims  data  by Medicaid  DUR  programs  raises 
major  questions  concerning  the  collection,  management,  and  disclosure  of such  data. 
How  much  and what  kind  of data  can be  collected  on beneficiaries?  Who  can have 
access  to such data  and  under  what  conditions?  What  safeguards  are  necessary  to 
prevent  unauthorized  access?  Such questions  were  beginning  to gain major  attention 
in 1989 as the  Federal  government  was preparing  to implement  the  (subsequently 
terminated)  Medicare  DUR  program.7  As Medicaid  DUR  programs  gain  momentum 
and  visibility, the  very same  questions  are  likely to surface.8  And  many  do not  seem 
to be  adequately  prepared.  The  kind of controversy  that  can  easily arise  through  the 
development  of electronic  data  bases  is illustrated  in a recent  Boston  Globe  story with 
the  headline:  HMO  puts  confidential  records  on-line:  Critics  say computer  file-
keeping  breaches  privacy  of mental  health  patients.9 
Protection  of poor  performers. 
~	 Does  the educational  focus  of the programs unnecessari~  inhibit  efforts to protect 
beneficiaries from  poorly performing providers? 
23(cid:1) State  DUR  programs  stress what  they  can  do for providers,  not  to them.  This 
approach,  they hold,  is more  likely to generate  improved  performance  than  is a 
punitive  one.  Accordingly,  when  they  identify  questionable  prescribing  or dispensing 
practices,  their  subsequent  contact  with the  provider  is almost  always strictly 
informational,  with no follow-up  action  actually  required  of the  provider.  On  rare 
occasions,  when  a particularly  egregious  practice  is identified,  the  DUR  program  will 
refer  information  on the  provider  to a State  medical  or pharmacy  board  or to the 
Surveillance  and  Utilization  Review  component  of the  Medicaid  agency. 
But what  happens  when  serious  questions  are  raised  about  a providers  knowledge 
base  and/or  practice  skills, but  they are  not  serious  enough  to call for referral  for 
possible  disciplinary  action?  The  DUR  programs  appear  to devote  little  attention  to 
crafting  responses  tailored  to such situations.  They  could,  for instance,  require  a 
provider  to take  certain  remedial  actions,  such as participating  and  satisfactorily 
completing  a course  addressing  proper  prescribing  or dispensing  practices.  This  kind-
of mid-range  response,  which  is essentially  educational  in nature,  would  help  protect 
patients  from  poor  care  and,  from  the  providers  perspective,  would  still be 
educational  in nature. 
Education  of patients. 
  Are  the programs su.ciently  focused  on patient  education? 
In a far-reaching  survey  on the  future  of medicine,  The  Economist  recently  concluded 
that  patients  are  beginning  to assume  control  over the  health  care  system.l  As 
medical  and  information  technology  continue  to develop,  the  traditional  authority  of 
health  care  professionals  is diminishing  and  patients  are  gaining  influence  over 
decisions  concerning  their  medical  care.  State  DUR  programs,  however,  pay little 
attention  to this significant  transformation.  Their  educational  efforts,  in accord  with 
Federal  direction,  focus  almost  strictly on physicians  /and  to a lesser  degree  on 
pharmacists.  The  challenge  of helping  patients  become  more  informed  participants  in 
their  own drug  therapy  is seldom  addressed.  The  time  seems  to be  right  to examine 
this situation  and  to search  for ways of incorporating  patient  education  as an 
important  component  of DUR  programs. 
Dependence  on vendors. 
~  Are  the programs  too dependent  on the vendors serving them? 
The  intent  here  is not  to dismiss the  contributions  of vendors  carrying  out  contracts 
with  State  DUR  programs.  They provide  valuable  expertise,  much  of it of a highly 
technical  nature,  to nearly  all aspects  of the  DUR  programs.  But  an outside  observer 
can  not  help  but  notice  that  often  the  State  agencies  lack the  internal  expertise  to 
ensure  that  the  work  of the vendors  is being  tailored  to the  particular  needs  of the 
States.  As a result,  important  decisions  about  the  development  and  use of criteria, 
about  the  nature  and  scope  of interventions,  and  about  the  thrust  of educational 
24  initiatives  are  sometimes  being  left to vendors.  In some  States,  the  DUR  boards  seem 
to provide  some  of this leadership,  but  typically their  participation  is too  infrequent 
(often  only quarterly  meetings)  to play more  than  an advisory  role. 
Problems  with Medicaid  claims data. 
	 Do inaccuracies  and omissions  in the Medicaid  claims data  bases serve as a 
significant  constraint  to the programs? 
Unquestionably,  problems  with the  accuracy  and  completeness  of data  often  limit the 
effectiveness  of DUR  programs.  We  heard  reference  to them  in just  about  every 
State  we contacted.  How  extensive  and  consequential  the  problems  are,  however,  is 
unclear.  We  did hear  that  one  large  State  has not  been  sending  out  any intervention 
letters  to providers  identified  through  its retrospective  screening  process  because  of 
concerns  about  the  accuracy  of the  claims  data  being  screened.  For  the  most  part,  the 
concerns  that  State  officials cited  about  accuracy  focused  on improperly  coded 
diagnostic  information.  But  they  also pointed  to an array  of other  inaccuracies 
concerning  data  provided  on such important  matters  as provider  number,  provider 
specialty,  drug  code,  and  Drug  Enforcement  Administration  number.  In some  cases, 
such inaccuracies  existed  alongside  significant  omissions  in the  claims  data  submitted. 
For  instance,  one  State  reported  that  about  one-third  of its pharmacy  claims  being 
submitted  were  missing  a physician  provider  number.11 
Validity of cost savings estimates. 
  Are  the programs  claiming cost savings that rest on weak foundations? 
Documenting  cost savings is an essential  element  of DUR  programs.  The  HCFA,  in 
accord  with  congressional  requirements,  calls for cost savings to be  included  in the 
States  annual  DUR  reports.  More  significantly  perhaps,  State  governments,  in their 
quest  to contain  escalating  Medicaid  costs, look  to the  programs  to contribute  to cost 
savings and  to document  their  success in doing  so.  Other  than  on the  most  obvious 
kinds  of matters,  such as eliminating  a duplicate  prescription,  the job  of developing 
sound  estimates,  particularly  with little  data  available  linking  DUR  interventions  to 
medical  outcomes,  is highly complex  and  resource  intensive.  Yet,  this does  not  lessen 
the  imperative  to arrive  at such estimates.  What  happens,  therefore,  is that  States 
often  claim  savings associated  with their  prospective  DUR  alerts  to pharmacists  or 
their  retrospective  interventions  to physicians  that  fail to take  into  account  indirect  or 
deferred  costs associated  with a reversed  drug  claim  or a changed  prescribing  practice. 
The  HCFA  has  recognized  the  vulnerability  of this situation  and  has helped  to address 
it by supporting  the  development  and  distribution  of a set of guidelines  on estimating 
the  impact  of DUR  efforts.12  But the  situation  remains  one  that  can  offer 
misleading  indications  of the  impact  of DUR  programs, 
25
 Bakmee  between  cost and quality. 
  Are  the cost-saving and quality-of-care  objectives of the programs  in balance? 
Saving costs is a vital  component  of DUR  programs.  So, too,  is improving  drug 
therapy.  It is certainly  possible  that  DUR  initiatives  can help  contain  costs as they 
improve  drug  therapy.  Many  appear  to be  developed  with this intention.  Yet,  in 
devising  DUR  efforts,  choices  are  made  that  weight  the  emphasis  given to the 
respective  objectives.  These  are  reflected  in decisions  on what  drug  use  criteria  to 
develop,  what  ones  to apply  in the  screening  process  and  how often,  and  what  degree 
of specificity  to use in applying  the  criteria.  What  may seem  to be mundane  decisions, 
often  shrouded  in the  complexities  of computer  algorithms,  can, in fact,  involve 
significant  choices  on DUR  objectives.  Given  the  cost pressures  noted  earlier,  the 
cost-saving  objective  surely looms  large  in this process.  The  concern  here  is not 
necessarily  that  quality  will be  sacrificed.  We saw no such indications.  More  possible, 
perhaps,  is that  providers  and  patients  will come  to perceive  DUR  programs  primarily 
as mechanisms  to contain  costs and  only secondarily  to foster  more  effective  use  of 
prescription  drugs.  As an example,  prospective  DUR  programs  that  trigger  alert  rates 
of close  to 20 percent  for pharmacy  claims  can clearly  contribute  to this perception. 
Implications  of managed  care. 
b	 Are  States developing  a DUR  injiastructure  that will become  increasingly irrelevant 
as Medicaid  managed  care enrollment  escalates? 
Medicaid  managed  care  enrollment  is rising sharply.  From  9.5 percent  of the  eligible 
population  in June  1991, it increased  to 23.2 percent  in June  1994.  Given  the  high 
level  of interest  in managed  care  and  the  Federal  waivers  facilitating  Medicaid 
enrollment  in managed  care,  the  proportion  almost  certainly  will continue  to rise;  by 
the  year  2000 it could  reach  about  50 percent  of the  eligible  population.13 
Thus  far,  State  DUR  programs  have  given little  attention  to the  implications  of this 
trend  for their  own efforts.  But the  implications  are  profound  and  warrant  immediate 
consideration.  Many  of the  managed  care  plans  include  prescription  drug  coverage. 
As Medicaid  beneficiaries  join  such plans,  they  are,  in effect,  lost to the  DUR 
program,  with the  plan  assuming  the  responsibility  (and  risk)  for cost-effective  drug 
therapy.  This  development  could,  in fact,  allow for improved  drug  utilization  review, 
more  effectively  tied  in with overall  medical  care.  Managed  care,  in short,  is not 
necessarily  in conflict  with good  DUR.  But  State  DUR  programs  appear  to have  little 
understanding  of the  nature  and  scope  of the  drug  utilization  review  that  occurs  under 
the  auspices  of managed  care  organizations  (MCOS).  Some  States  are  moving  in the 
direction  of asking  MCOS for drug  encounter  data.  But  such efforts  have  barely 
begun  and  here,  too,  there  is little  understanding  of whether  they  are  likely to be 
effective. 
26
 APPENDIX  A

NOTES 
1.	 Public  Law  101-508, November  5, 1990, (Omnibus  Budget  Reconciliation  Act  of 
1990). 
2.  Our  studies  on pharmacy  issues include: 
Medicare  Drug Utilization Review,  (OAI-01-88-00980),  April  1989. 
tivacy  Implications  of the Medicare  prescription Drug Benefitk  Electronic 
Claims Processing System: A  Management  Adviso~  Repoti, 
(OAI-01-89-89170),  April  1989. 
Physician  Drug Dkpensing:  An  Overvi@v of State Regulation, 
(OAI-01-88-00590),  May  1989. 
State Disc@line of Pharmacists,  (OAI-01-89-89020),  July  1990. 
Symposium  on Drug Utilization Review  Issues: Proceedings, 
(HHS-1OO-89-OO21),August  1990. 
Symposium  on Drug Utilization Review  Issues:  Summa~  Report, 
(OEI-O1-89-89O1O), August  1990. 
l%e Clinical Role  of the Community  Pharmacist,  (OEI-01-89-89160), 
November  1990. 
The Clinical Role  of the Communi~  Pharmacist:  Case Studies, 
(OEI-01-89-89161),  November  1990. 
Promotion  of Prescription Drugs Through Payments  and  G@s, 
(OE1-01-90- 00480), August  1991. 
Point-of-Service  Claims Management  Systems for Medicaid, 
(OEI-01-91-00820),  May  1992. 
prescription  Drug Advertisements  in Medical Journals, 
(OEI-01-90-00482),  June  1992. 
A-1
 Prescription Drug Promotion  Involving  Payments  and  Gijs:  Physicians 
Perspectives, (OEI-01-90-00481),  July  1992. 
3.  Ina  1994 report,  Health  Systems  Research  pointed  out  the  considerable 
variation  that  exists in the  scope,  detail,  and  relationship  of DUR  criteria  to the 
scientific  literature.  It also noted  that  State  officials and  DUR  board  members 
often  know very little  about  the  quality  of the  DUR  criteria  used  in 
prospective  and  retrospective  DUR  interventions.  See  Health  Systems 
Research,  Recommendations  for Improving  the Quality and Effectiveness  of State 
Medicaid  Drug Utilization Review Activities,  a paper  submitted  to the  Office  of 
Medicaid  Management,  Health  Care  Financing  Administration,  February  28, 
1995. 
4.  National  Association  of Boards  of Pharmacy,  Patient  Counseling  Requirements, 
Park  Ridge,  IL,  1993. 
5.  See  OIG,  l%e Clinical Role  of the Community  Pharmacist, 
6.  American  Drug  Utilization  Review  Symposium,  San Antonio,  Texas, 
February  16-19, 1995. 
7.  We  addressed  raised  and  addressed  these  questions  in an earlier  report.  See 
OIG,  fivacy Implications  of the Medicare  Prescription Drug Benefits  Electronic 
Claims Processing System: A  Management  Advisory  Report. 
8.  Section  456.703 (h)  of 42 CFR  456 calls for States  to establish  policies  on

confidentiality  of patient-related  data  that  are  consistent  with Federal

confidentiality  requirements,  State  pharmacy  practice  acts,  and  State  pharmacy

board  guidelines.  And  Section  5350 of the  State  Medicaid  Manual  issued  by

the  Federal  government  stipulates  that  the  use or disclosure  of information

concerning  applicants  and  recipients  is restricted  to purposes  directed  related  to

administration  of the  title  XIX  State  plan.  These  instructions  provide  some

guidance  to States,  but  sill call for much  interpretation  as States  rely

increasingly  on electronic  claims information.

9.  Boston  Globe,  March  7, 1995.  The  visibility generated  by the  newspaper

coverage  led the  medical  director  of the  HMO  cited  to offer  the  following

comment:  We may well need  to change  our  guardrail  around  patient

confidentiality.  Regardless  of what  our  doctors  think  they  need  to know, we

have  to pay attention  to what  our patients  want  them  to know.  Boston  Globe,

9 March  1995.

10.  A Survey  of the  Future  of Medicine,  The  Eeonornis~  19 March  1994,

pp.  1-18.

A-2  11.	 An early  1994 review  of State  DUR  programs  conducted  for HCFA  also raised 
questions  about  the  quality  of data  available  for DUR  programs,  Its focus, 
however,  was on the  quality  of data  available  to evaluate  the  performance  of 
the  programs.  See  Elizabeth  Donnelly  Appel,  Health  Systems  Research, 
Recommendations  for Improving the Quality and Effectiveness  of State 
Medicaid  Drug Utilization Review Activities, February  28, 1994, p. 5. 
12.	 David  Zimmerman,  Ted  Collins,  Earlene  Lipowski,  David  Kreling,  and  Joseph 
B. Wiederholt  (Consultants  to Shepard  Patterson,  Inc.),  Guidelines for 
Estimating  the Impact  of Medicaid  D~  (Contract  #500-93-0032), 
August  1984. 
13.	 Lee  Partridge,  Medicaid  and  Managed  Care,  Washington Memo,  American 
Public  Welfare  Association,  February  1995, pp.  13-20. 
A-3