NOTE:  As provided in LFC policy, this report is intended only for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used for other purposes.

 

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F I S C A L   I M P A C T   R E P O R T

 

 

SPONSOR:

Papen

 

DATE TYPED:

03/05/03

 

HB

 

 

SHORT TITLE:

Medicaid Mental Illness Medications

 

SB

822/aSPAC

 

 

ANALYST:

Weber

 

APPROPRIATION

 

Appropriation Contained

Estimated Additional Impact

Recurring

or Non-Rec

Fund

Affected

FY03

FY04

FY03

FY04

 

 

 

 

 

See Narrative

 

 

 

 

 

 

 

 

(Parenthesis ( ) Indicate Expenditure Decreases)

 

SOURCES OF INFORMATION

 

Responses Received From

Human Services Department (HSD)

Department of Health (DOH)

Regulation and Licensing-Board of Pharmacy (RLD)

 

SUMMARY

 

     Synopsis of SPAC Amendment

 

On page 2, line 10, strike “being treated” and after “for” insert “the treatment of”.  This Senate Public Affairs Committee amendment does not change the intent or potential impact of Senate Bill 822. 

 

     Synopsis of Original Bill

 

Senate Bill 822 (SB 822) would amend Section 27-2C-3 NMSA 1978 to add a new subsection (D) stipulating that requirements for prior authorization shall not apply to prescription drugs – including atypical anti-psychotic and conventional anti-psychotic medications – that are prescribed for Medicaid patients being treated for severe mental illnesses that are listed in the Diagnostic and Statistical Manual (DSM).  The bill also makes slight revisions to clarify language in subsection A and a reference in subsection C.

 

     Significant Issues

 

HSD notes that Section A of SB 822 calls for the implementation of a preferred drug list (PDL) , “taking into consideration the clinical efficacy, safety and cost-effectiveness of a product”. This is a dynamic, clinically current document, which would be unduly constrained under Section D. If science-based research fails to substantiate clinical efficacy, or raises safety or cost-effectiveness concerns, this section would hamper efforts to constrain potentially inappropriate uses of drugs.

 

DOH offers a slightly counter view indicating that many individuals with severe mental illnesses require ongoing use of antipsychotic medications that currently require prior authorization. This authorization review often interferes with the timely provision of appropriate and beneficial therapy.  In addition, the repetitious prior authorization process interferes with efficient and effective treatment.  RLD concurs and states this change provides faster treatment for those patients with severe mental illness and potentially save lives.

 

FISCAL IMPLICATIONS

 

The fiscal impact is indeterminate but it is assumed that less restrictive drug management will result in increased Medicaid pharmacy expenditures.

 

MW/sb