Comparing the Medicaid Retrospective Drug Utilization Review Program Cost-Savings Methods Used by State Agencies

BACKGROUND: The Medicaid Drug Utilization Review (DUR) program is a 2-phase process conducted by Medicaid state agencies. The first phase is a prospective DUR and involves electronically monitoring prescription drug claims to identify prescription-related problems, such as therapeutic duplication, contraindications, incorrect dosage, or duration of treatment. The second phase is a retrospective DUR and involves ongoing and periodic examinations of claims data to identify patterns of fraud, abuse, underutilization, drug-drug interaction, or medically unnecessary care, implementing corrective actions when needed. The Centers for Medicare & Medicaid Services requires each state to measure prescription drug cost-savings generated from its DUR programs on an annual basis, but it provides no guidance or unified methodology for doing so. OBJECTIVES: To describe and synthesize the methodologies used by states to measure cost-savings using their Medicaid retrospective DUR program in federal fiscal years 2014 and 2015. METHOD: For each state, the cost-savings methodologies included in the Medicaid DUR 2014 and 2015 reports were downloaded from Medicaid's website. The reports were then reviewed and synthesized. Methods described by the states were classified according to research designs often described in evaluation textbooks. DISCUSSION: In 2014, the most often used prescription drugs cost-savings estimation methodology for the Medicaid retrospective DUR program was a simple pre-post intervention method, without a comparison group (ie, 12 states). In 2015, the most common methodology used was a pre-post intervention method, with a comparison group (ie, 14 states). Comparisons of savings attributed to the program among states are still unreliable, because of a lack of a common methodology available for measuring cost-savings. CONCLUSION: There is great variation among states in the methods used to measure prescription drug utilization cost-savings. This analysis suggests that there is still room for improvement in terms of methodology transparency, which is important, because lack of transparency hinders states from learning from each other. Ultimately, the federal government needs to evaluate and improve its DUR program.