Comparing the Medicaid Prospective Drug Utilization Review Program Cost-Savings Methods Used by State Agencies in...

The Medicaid Drug Utilization Review (DUR) program is a 2-phase process conducted by Medicaid state agencies. The first phase is a prospective DUR process 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 involving ongoing, periodic examinations of claims data to identify patterns of fraud, abuse, underutilization, drug-drug interaction, and medically unnecessary care, and implement corrective actions when needed. The Centers for Medicare & Medicaid Services requires each state to measure the prescription drug cost-savings generated from its DUR programs annually, but it provides no methodology for doing so. An earlier article compared the methodologies used by states to measure cost-savings in their retrospective DUR program in fiscal years 2014 and 2015.

To describe and synthesize the methodologies used by states to measure cost-savings using their Medicaid prospective DUR program in federal fiscal years 2015 and 2016.

For each state, we downloaded from Medicaid's website the cost-savings methodologies included in the Medicaid DUR 2015 and 2016 reports. We then reviewed and synthesized the reports. Methods described by the states were classified into a unique group based on the methodology used, except for Arkansas and Connecticut, which were classified in more than 1 category for the same period.

Currently, 3 different methodologies are being used by states. In 2015 and 2016, the most common methodology used (by 18 states) was the calculation of total claim rejections and subtracting claim resubmissions at the amount actually paid. The comparisons of DUR program cost-savings among states are unreliable, because the states lack a common methodology in the way they measure their performance.

Considering the lack of methodologic consistency among states in measuring the savings in the Medicaid DUR program shown in this analysis, the federal government must lead an effort to define a unique methodology to measure cost-savings in its entire DUR program. This will help to improve the measure of savings among states and understand how this program is performing in that matter.