Small fix saves big money

Requiring Medicaid patients to get all their drugs at one pharmacy sames a lot of money.

Sometimes a simple fix is all that's needed. That seems to be the case in the state's effort to clamp down on doctor-hopping for drugs by Medicaid patients.

South Carolina has a problem with abuse of narcotics by some patients on Medicaid, the health program for the poor. Records indicate that patients were filling prescriptions at different pharmacies so they could overmedicate themselves, sell extra pills, or both.

An analysis pinpointed 48 adults statewide who were believed to be among the worst offenders. The state's Medicaid agency then announced that these patients would be subjected to a “pharmacy lock-in.”

The program does not limit doctor visits, prescriptions or provider choices. Instead, participants are told Medicaid will pay for their prescriptions at one pharmacy only.

The result was somewhat astounding. The lock-in saved taxpayers an average of $6,700 per patient — or more than $321,500 total — in just nine months. That includes 40 percent fewer prescriptions filled and a 21 percent drop in hospital visits.

With the success of this pilot program, another 200 Medicaid recipients are expected to be enrolled in the program by early 2010. As patients with fewer multiple prescriptions are signed up, the per-patient savings will drop, but the overall savings could be substantial nonetheless.

North Carolina has a similar program, which it launched in 2006. It saved the state $932,000 last fiscal year.

South Carolina has roughly 254,000 Medicaid recipients who have remained in the traditional fee-for-service program that allows patients to visit providers of their choice and doesn't require prior approval of prescriptions. Most of them are not suspected of abusing the program.

But by targeting those whose prescription purchases raise red flags, the state could save hundreds of thousands of dollars a year. That's a minor tweak, far short of a program-wide overhaul, but it is almost certain to yield huge savings.

It makes us wonder what took those who administer Medicaid so long to adopt the lock-in strategy.