YELLOW SHEET
Office of the State Auditor of Missouri
Claire McCaskill
|
YELLOW SHEET Office of the State Auditor of Missouri |
March 04, 2004
Report No. 2004-15
Statutory changes and improvements in management and oversight would
benefit the Senior Rx program
The cost of prescription drugs, especially for senior citizens on fixed incomes, has been an ongoing concern for the last several years. The Missouri Senior Rx program was established in a September 2001 special legislative session to help seniors with these costs. Program administrative costs were $2.8 million in fiscal year 2003 and budgeted at $2.4 million in fiscal year 2004. The audit focused on whether the program was effectively and efficiently implemented.
Results-based
strategic planning process not implemented
Program
officials have not implemented a results-based strategic planning process outlining
specific goals to be achieved. As a
result, they cannot ensure a key element of strategic planning -
accountability. (See page 11)
Fiscal
year 2003 enrollment less than half what was anticipated
Enrollment
was less than half what was anticipated for fiscal year 2003 and declined in
fiscal year 2004. Lower enrollment for
fiscal years 2003 and 2004 may have resulted from benefit details not being
announced until after the initial fiscal year 2003 enrollment period and limited
marketing opportunities between the fiscal years 2003 and 2004 open enrollment
periods. Program officials increased
program marketing for the fiscal year 2005 enrollment period. (See page 5)
Medicaid
rates for multi-source drugs were lower than Senior Rx rates for those drugs
The
Senior Rx program and seniors could have saved over 12 percent of total
prescription expenditures ($2.9 million of $23.6 million) in fiscal year 2003
by using pharmacy reimbursement options similar to the state’s Medicaid
program. The specific amount of savings
possible for seniors and the program cannot be determined due to co-payment and
other issues; however, each would benefit about equally from any potential
savings. Legislative action is needed to
implement this change. (See page 11)
No
review of rejection reasons performed
Our
analysis of fiscal year 2003 claims data identified 27 percent of pharmacy
submitted claims were rejected, costing the program about $300,000. Program officials did not evaluate trends by
pharmacies or reasons for rejected claims to identify correctable issues that
unnecessarily increased program costs.
(See page 15)
New
federal Medicare drug benefit will force changes to state’s program
Coordination
of benefits will be necessary for any state programs in place once the Medicare
prescription drug benefit is fully implemented.
The Medicare legislation caps the first benefit tier at $2,250 in
prescription drug expenditures with no additional federal participation until a
senior has $3,600 in out-of-pocket costs.
During fiscal year 2003, approximately 3,600 Senior Rx program enrollees
had program related prescription costs exceeding $2,250. These seniors would be the only ones to
potentially realize any significant benefit from Missouri’s program once the full
Medicare benefit is established. (See
page 6)
Private
programs may offer better benefits
Most brand-name pharmaceutical manufacturers and other organizations operate discount programs to help low income individuals. Auditors determined some seniors and the state could have saved approximately $60,000 and $28,000, respectively, if they had enrolled in private pharmaceutical companies discount programs instead. State law allows the Senior Rx Commission to establish a clearinghouse to assist Missouri residents in accessing prescription drug programs to help evaluate the most cost-effective option. A clearinghouse was not funded by the legislature for fiscal years 2003 or 2004. (See page 8)