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HIV Capitation Risk Adjustment: Conference Report
This report provides an overview of conference proceedings which focused on developing managed care reimbursement strategies that will ensure quality care for people living with HIV and fair compensation for those providing care.
The August, 1997 Kaiser Family Foundation/Harvard Health News Index includes questions about major health issues covered in the news, including questions about the Non-profit and For-profit health care. The survey is based on a national random sample of 1,000 American conducted July 1- 31, 1997. The Health News Index is designed to help the news media and people in the health care field gain a better understanding of which health stories in the news Americans are following and what they understand about the health issues covered in the news. Every two months, Kaiser/Harvard issues a new index report.
The Kaiser Family Foundation is providing two resources on caring for an elderly relative produced by the American Association of Retired Persons (AARP) free of charge. They are being provided as part of a joint project with WCVB-TV in Boston, which aired a special series on this topic on July 28, 1997. The reports provided are: Nursing Home Life: A Guide for Residents and Families and Staying Home: A Guide to Long-Term Care and Housing.
A Special Series
The Kaiser Family Foundation and ABC/WCVB Local TV News Initiative:
Caring For An Elderly Relative
Growing numbers of families today are struggling with the challenges of getting and paying for long-term care for elderly relatives. As the population ages and more women enter the workforce, the problems of caring for elderly relatives will only worsen. There are 1.6 million elderly residents in nursing homes today, but long-term care issues touch millions more families. In fact, more than one in four Medicare beneficiaries has a long-term care need, most of whom are cared for by family members at home. Families are in need of information about what health care services are available and how to pay for and arrange for such care.
As part of a special series to look in-depth at health care issues affecting Americans today, the Kaiser Family Foundation, ABC News and WCVB (Boston) have formed the Local TV News Initiative, a project designed to help the public to better understand the complex health issues facing Americans today. The first in this series focuses on Caring for An Elderly Relative. Two free booklets — “Staying at Home: A Guide to Long-Term Care and Housing” and “Caregiver Support Groups in America” both produced by AARP — are available by calling the Foundation’s publication request line: 1 (800) 656-4533.
Additional resources available on the Web are listed below:
American Association of Homes and Services for the Aging
American Association for Retired Persons
Health Care Financing Administration (Medicare and Medicaid)
National Association for Home Care
SPRY: Setting Priorities for Retirement Years Foundation
Visit WCVB, the ABC affiliate in Boston who produced this specialseries on Caring For An Elderly Relative.
A Comparison of the Medicaid Provisions in the House and Senate Versions of the Balanced Budget Act of 1997 (H.R. 2015/S. 947) with Current Law
Prepared by Sara Rosenbaum, Julie Darnell, Center for Health Policy Research, The George Washington University Medical Center for the Kaiser Commission on the Future of Medicaid
July 1997
Table Of ContentsIntroduction iii A. Overview 1 B. Eligibility 2 1. General approach to eligibility 2 2. Poverty-level children 2 3. Disabled children 2 4. Continuous coverage of children 3 5. Presumptive eligibility of children 3 6. Legal immigrants 4 7. Undocumented aliens 4 8. Low-income Medicare beneficiaries 5 9. Disabled workers 5 10. Women with diagnosed breast cancer 6 C. Benefits 7 1. General approach to benefits 7 2. Early and Periodic Screening Diagnosis and Treatment (EPSDT) 7 3. Primary care case management services 7 4. Physician assistant services 8 5. Community-based mental health services 8 6. Home and community based care 8 7. Long-term care services 9 D. Premiums And Cost Sharing 10 1. General approach to premiums and cost sharing 10 2. HMO copayments 10 3. Cost sharing for qualified Medicare beneficiaries 10 4. Payment of Medicare premiums for specified low-income Medicare beneficiaries 11 5. Private health insurance premiums 11 E. Provider Reimbursement 12 1. General approach to provider reimbursement 12 2. Hospitals 12 3. Disproportionate share hospitals 13 4. Nursing facilities 14 5. Managed care entities 14 6. Federally qualified health centers and rural health clinics 14 7. Obstetrical and pediatric providers 14 F. Managed Care 15 1. General approach to managed care 15 2. Mandatory enrollment as a condition of coverage 16 3. Enrollment composition of Medicaid-qualified managed care organizations 16 4. Default enrollment 16 5. Guaranteed enrollment 17 6. Disenrollment 17 7. Conditions of participation for managed care entities 18 8. Prior approval of contracts with managed care organizations 19 9. Provider Plan protections 19 10. Payment of DSH hospitals 19 11. Quality assurance 19 12. Enrollment of Native Americans 19 13. Treatment of family planning services 20 H. State Administration Requirements 20 1. Privatization 20 2. Continuation of waivers 20 I. Federal Financial Assistance 21 1. Disproportionate share payments 21 2. Federal Medicaid assistance percentage (FMAP) 21 3. Federal financial assistance for care of aliens 21 Introduction
The following table compares current Medicaid law with the Medicaid provisions contained in the FY 1998 budget reconciliationmeasures (H.R. 2015, S. 947, The Balanced Budget Act of 1997) passed by the House and Senate on June 25, 1997.1 A House/SenateConference Committee has begun work on the key differences between the two measures. Most observers assume that the Conference willmove rapidly and will also entail negotiations with the White House in order to resolve remaining differences prior to the time that the ConferenceAgreement is finally approved by both Houses and sent to the President. When finally enacted into law, the legislation will make significantchanges in numerous federal health and welfare programs, including Medicaid.
While the House and Senate Medicaid provisions are highly similar, they contain certain notable differences that must be resolved. Bothmeasures would retain Medicaid as an individual entitlement with no caps to federal contributions to state Medicaid programs.2 Both bills wouldlimit federal contributions to states’ Disproportionate Share Hospital Payment (DSH) programs, with certain minimum DSH spending requirementsimposed on state agencies in the case of the Senate bill. Both measures would make numerous changes in federal requirements related toeligibility of non-citizens, benefits, the use of mandatory managed care arrangements, provider reimbursement, long-term care benefits, andstate administration. The Senate measure contains more provisions than the House in the area of state administration requirements for managedcare and on conditions of participation for managed care entities. The Senate bill also extends certain payment and participation protections tomanaged care entities that are not contained in the House bill.A. Overview Issue Current Law House (H.R. 2015) Senate (S. 947) 1. Summary Medicaid entitles individuals who meet eligibility conditions to coverage for a range of required and optional acute and long-term care services.
States are entitled to a federal contribution toward the cost of their programs calculated in accordance with a statutory formula.
Additional payments made to states for disproportionate share hospital (DSH) programs.
Certain providers, including hospitals, nursing homes, home health agencies, federally qualified health centers (FQHC), and rural health clinics (RHC) are entitled to reimbursements in accordance with certain rules.
Providers serving Medicare beneficiaries who also have Medicaid are entitled to the Medicare payment rate.
Copayments for Medicaid beneficiaries permitted only under limited circumstances.
States may offer managed care enrollment on a voluntary basis. Mandatory managed care enrollment requires states to obtain a waiver of the freedom of choice provisions (Section 1915(b) or Section 1115).
States may use private contractors to administer Medicaid programs but not to determine eligibility.
Prohibits medical assistance beyond emergency coverage to undocumented aliens. Retains Medicaid as an individual entitlement with a continued state entitlement to federal financing without a cap.
No change to current law.
Reduces federal contributions for state DSH programs.
Repeals Boren Amendment payment requirements for hospitals, nursing facilities and home health agencies.
Revised payment rules for FQHCs and RHCs.
No change to current law.
Expands state options to require cost sharing.
Permits states to mandate managed care enrollment for all Medicaid beneficiaries except special needs children.
Permits states to use private contractors to determine eligibility.
Includes new funding for states with high numbers of undocumented aliens. Retains Medicaid as an individual entitlement with a continued state entitlement to federal financing without a cap.
No change to current law.
Similar provision, but requires targeting of DSH hospitals.
Similar provision.
No change to current law.
Permits states to pay Medicaid rates for Medicare beneficiaries.
Similar provisions.
Permits states to mandate managed care enrollment for all Medicaid beneficiaries except special needs children and Medicare beneficiaries.
No similar provision.
No similar provision. B. Eligibility Issue Current Law House (H.R. 2015) Senate (S. 947) 1. General approach to eligibility Conditions coverage on numerous financial and categorical conditions of eligibility.
Individuals who meet eligibility requirements are entitled to coverage for medical assistance items and services covered under a State’s Medicaid plan when furnished by participating providers. Retains the entitlement to coverage among eligible individuals.
Permits states to condition coverage for all beneficiaries on mandatory enrollment in a managed care entity. Exempts special needs children (those who receive SSI or are institutionalized) from mandatory managed care enrollment. Retains the entitlement to coverage among eligible individuals.
Permits states to condition coverage for all beneficiaries on mandatory enrollment in a managed care entity. Exempts from the mandatory enrollment requirements special needs children and Medicare beneficiaries. 2. Poverty-level children Mandates coverage of all children up to age 19 who meet financial conditions of eligibility and who were born after September 20, 1983, thereby phasing in coverage for children under 19 to the year 2002.
States can expand coverage to children under poverty under 1902(r)(2) or Section 1115 waivers. Clarifies state option to immediately extend coverage to all children under age 19. Similar to House provisions. 3. Disabled children Children who are disabled and receive SSI automatically receive Medicaid in nearly all states. Disability criteria for children restricted under 1996 welfare reform legislation to remove functionally disabled children and to tighten criteria for mental illness-related disability. Approximately 150,000 children are expected to be removed from SSI; CBO estimates that most will requalify for Medicaid as poverty-level children. Authorizes states to provide Medicaid to all children who lose SSI as a result of welfare reform and who do not otherwise qualify for Medicaid. No change to current law. 4. Continuous coverage of children Terminates eligibility for children who no longer meet conditions of eligibility. Permits states to guarantee 12 months of eligibility following a determination of eligibility up to an age specified by the state, but not exceeding 19 years of age. Contains similar provision. 5. Presumptive eligibility for children Provides states with the option to extend a period of presumptive (i.e., temporary) eligibility for prenatal care in the case of pregnant women who have applied for Medicaid and who, based on preliminary information, appear to be eligible for coverage. Adds a presumptive eligibility option for children under age 19 and identifies as potentially qualified to make presumptive eligibility determinations the following: Head start agencies, child care providers and WIC programs. Federal expenditures attributable to services provided during presumptive eligibility period would be deducted from the amounts available to the states under the Child Health Block Grant. No change to current law. 6. Legal Immigrants Authorizes, but does not require states to extend coverage to most qualified aliens (i.e., non-citizens who are legal U.S. residents) who are otherwise eligible for Medicaid and resided in the U.S. prior to August 22, 1996.
Optional Medicaid coverage groups include legally resident SSI recipients who received SSI benefits on August 22, 1996, but will lose assistance as non-citizens. As of Spring 1997, seven states had elected not to extend Medicaid to some or all former SSI recipients who were qualified aliens.
Imposes 5-year time limit on Medicaid coverage for emergency care only for otherwise eligible qualified aliens who enter the U.S. on or after August 22, 1996. Restores SSI and Medicaid benefits to all qualified aliens who received SSI and Medicaid as of August 22, 1996.
Extends from 5 to 7 years the time period for which refugees who are eligible for SSI may receive assistance, thereby increasing the period of mandatory Medicaid coverage for emergency care.
Adds Cuban and Haitian entrants to the group of legal immigrants covered by the exemptions for refugees.
Exempts legal immigrants who are members of an Indian tribe from the restrictions on SSI and Medicaid eligibility. Restores SSI and Medicaid benefits to all qualified aliens who received SSI and Medicaid as of August 22, 1996. Extends coverage to qualified aliens were in the country and who subsequently become disabled and eligible for SSI but were not receiving SSI as of August 22, 1996.
Exempts from the restriction on SSI benefits persons found eligible after July 1996, on the basis of very old applications, as well as SSI recipients who were too disabled to meet the conditions of naturalization by the September 1997, deadline.
Similar to House Provision and eliminates 5 year ban on full Medicaid eligibility in the case of qualified aliens who are children under age 19.
Similar to House Provision and adds Amerasians.
Similar to House Provision. 7. Undocumented aliens Prohibits medical assistance beyond emergency coverage to undocumented aliens. Authorizes a new entitlement-based state grant program of $100 million ($20 million per year) for FY 1998 through FY 2002 for emergency services to each of the 12 States with the highest number of undocumented aliens, with each state’s allotment ratio equal to the same percentage as the number of undocumented aliens in the state bears to the nation, based on estimates prepared by INS. No similar Senate provision. 8. Low-income Medicare beneficiaries Requires states to pay for the premiums, deductibles and coinsurance to Qualified Medicare Beneficiaries (QMBs) with resources at or below twice the SSI resource-eligibility standard and with incomes at or below 100% of the FPL.
Requires states to pay Medicare premiums for Specified Low Income Medicare Beneficiaries (SLMBs) with family incomes at or below 120% of the FPL and resources at or below twice the SSI resource-eligibility standard .
Federal contributions to the QMB and SLMB program are at the state’s federal medical assistance percentage rate (between 50% and 79% of total state outlays). No change to current law.
Raises the SLMB eligibility standard for Part B premium assistance to 135% of the FPL and adds home health care cost-sharing assistance for individuals with family incomes between 135% and 175% of the FPL.
Sets the federal contribution level for new Part B premium payment requirements at 100%. No change to current law.
Establishes a “low-income Medicare Beneficiary Block Grant Program” to states to pay Medicare Part B premiums to Medicare Beneficiaries with family incomes between 120% and 150% of the FPL (level set by states).
No similar Senate provision. 9. Disabled workers Mandates coverage of persons “who previously received SSI if they continue to have a disabling physical or mental impairment, continue to meet all SSI requirements other than income from earnings, do not have enough earned income to disqualify them from special SSI coverage, and would be seriously inhibited from continuing to work in the absence of Medicaid and do not have enough earnings to provide a reasonable equivalent to Medicaid.” No change to current law. Adds sliding scale premium-based Medicaid coverage option for disabled workers with family incomes < 250% of the FPL and who, but for excess earnings, would be considered to be receiving SSI (and therefore eligible for extended Medicaid) as disabled workers. 10. Women with diagnosed breast cancer Women with breast cancer must meet Medicaid income and categorical criteria to become eligible for medical assistance for treatment of diagnosed breastcancer under Medicaid. No change to current law. Adds optional coverage for a limited Medicaid benefit package of breast cancer-related services for women under age 65 who are not otherwise eligible for Medicaid, whose incomes and resources meet standards established by the Director of the CDC breast cancer screening program, and who are diagnosed with breast cancer as a result of participation in the CDC’s breast cancer screening program.
Low income women screened through other programs or non-participating providers would not be covered.
The benefit package includes prescribed drugs, physicians’ services, FQHC and RHC services, laboratory and X-ray services, case management services, and services (other than room and board) to encourage completion of treatment including directly observed therapy.
Inpatient hospital care is excluded. C. Benefits Issue Current Law House (H.R. 2015) Senate (S. 947) 1. General approach to benefits Medicaid beneficiaries are entitled to coverage for a defined set of benefits. States are required to cover certain benefits as a condition of program participation and may elect to provide other benefits. Coverage must be sufficient in amount, duration and scope to reasonably achieve the purpose of the benefit and states are prohibited from arbitrarily discriminating in coverage based on a condition or diagnosis. Retains the existing defined benefit structure while adding new benefit options. Similar to House provision. 2. Early and Periodic Screening Diagnosis and Treatment (EPSDT) Provides for mandatory coverage of EPSDT benefits for eligible children < 21, which consist of periodic and interperiodic health exams, vision, dental and hearing care, and all medically necessary treatment recognized under the Medicaid statute regardless of whether services are covered for adults. Coverage levels exceed usual benefits offered by most commercial insurance plans. Directs the Secretary to contract a study of the actuarial value of the EPSDT benefit, including the medically necessary treatment requirement. Contains similar provision, but requires the Secretary to conduct a study of the whole EPSDT benefit (broader than its actuarial value). 3. Primary care case management services Primary care case management services are not an explicitly recognized Medicaid benefit. States may cover case management services at their option (case management services are required for children if medically necessary). Case management is defined as a service which assists a beneficiary obtain necessary medical, educational, health or social services. Adds a new primary care case management (PCCM) coverage option; PCCM benefits are defined as “case management-related services (including coordinating and monitoring of health services) provided by a primary care case manager under a PCCM managed care contract. Primary care means services customarily provided by primary care practitioners (including medical, health and lab services). Similar to House provision. 4. Physician assistant services Authorizes states to pay for the services of any licensed practitioner furnishing covered services within the scope of his or her practice. Specifically authorizes optional coverage of physician assistant services to the extent that they are lawful under State law. No similar Senate provision. 5. Community-based mental health services Authorizes coverage of a range of ambulatory diagnostic, preventive aand treatment services relate to mental illness and addiction disorders but no single all-inclusive out-patient service benefit for persons with mental illness.
States that elect to cover preventive, diagnostic, rehabilitation and treatment services for persons with mental illness must provide such services to all persons who need them regardless of their condition or diagnosis. No change to current law. Authorizes optional coverage of outpatient and intensive community-based mental health services for Medicaid beneficiaries.
States may elect this option without covering comprehensive outpatient clinical and rehabilitation services for other conditions.
Services include psychiatric rehabilitation, day treatment, intensive in-home services for children, assertive community treatment, therapeutic out-of-home placements (excluding room and board), clinic services, partial hospitalization and targeted case management. 6. Home and community based care Limits coverage of habilitation services under Section 1915(c) home- and community- based demonstrations to individuals who previously were institutionalized. Eliminates prior institutionalization requirement for habilitation services in the case of individuals participating in home- and community-based care demonstration programs. No similar Senate provision. 7. Long-term care services Mandates coverage of nursing facility, home health benefits and hospital services for all beneficiaries (including frail elderly), and gives states the option to cover a broad range of other long-term care benefits.
Authorizes the Secretary to waive otherwise applicable limitations on benefits, statewideness and eligibility in order to permit states to cover home and community based services. Establishes a new “Program of All Inclusive Care For the Elderly (PACE)” authorizing coverage of integrated acute and long-term care services. Optional PACEprogram benefit consists of all items and services covered under Medicare and Medicaid without limitation or condition related to amount, duration and scope (within PACE specified protocal for benefits) and without copayment and coinsurance.
Enrollment would be voluntary.
PACE services furnished through certified PACE program providers who are paid on a prospective, capitated basis, who comply with a PACE protocol, and meet conditions of participation. PACE program-eligible persons are individuals ages
A State-by-State Profile of ADAPs: Key Access & Budget Categories (as of July 1997)
State Financial Eligibility *1(% above federal poverty level) Medical Eligibility *2(CD4=CD4 cell count, vl=viral load) Protease Inhibitors Covered *3(4 drugs approved) Non- nucleosides Covered(2 drugs approved) OI Prophylaxis Covered *4(14 drugs recom- mended) Other Medications Covered Total Est. Budget(FY 1997) State Contri- bution as % of Total Est. Budget(FY 1997) ADAP Clients Served Per Month *5(December 1996) Emergency Cost-Containment Measures (1996- 1997) * = measure in place as of July 1997 Alabama 250% CD4 <500 3 0 5 0 $3,190,000 5% 700 Capped enrollment*, waiting list Alaska 200% 4 1 0 0 $122,917 0% 9 Capped enrollment*, transferred funds from other accounts, waiting list Arizona 200% 4 0 2 2 $2,300,027 0% 354 Transferred funds from other accounts Arkansas 100% 0 0 3 3 $1,254,013 0% 389 Capped enrollment California 400% 4 1 13 28 $87,111,105 46% 7,342 Colorado 185% 4 0 0 0 $2,904,932 10% 423 Transferred funds from other accounts Connecticut 300% 3 0 12 42 $3,814,283 0% 548 Delaware 230% 3 1 6 27 $979,000 0% 62 D.C. 300% 3 1 11 25 $4,363,341 3% 699 Access to protease inhibitors capped*; capped enrollment*; reduced formulary*, transferred funds from other accounts, waiting list Florida 200% CD4 <500 4 1 6 2 $24,317,997 0% 4,565 Access to protease inhibitors capped* Georgia 125% CD4 <500 3 0 0 0 $9,379,959 3% 984 Capped enrollment*; restricted access to protease inhibitors*, waiting list Hawaii 400% 4 1 12 13 $1,112,403 27% 66 Idaho 400% CD4 <500 1 0 2 2 $193,000 0% 30 Illinois 200% 4 1 14 36 $14,514,522 57% 1,211 Per client dollar limits on drug costs*; reduced formulary*, transferred funds from other accounts, access to protease inhibitors capped Indiana 300% CD4 <500 4 1 5 4 $2,310,710 3% 225 Capped enrollment*; reduced formulary*, waiting list Iowa 200% 3 0 6 6 $292,680 0% 39 Kansas 300% 4 0 8 14 $738,196 0% 56 Transferred funds from other accounts, capped enrollment, access to protease inhibitors capped Kentucky 300% CD4 <550 4 1 5 7 $994,321 9% 173 Access to protease inhibitors capped*, waiting list Louisiana 200% 3 0 0 0 $19,371,330 83% 115 Transferred funds from other accounts Maine 200% CD4 20k 4 0 5 1 $389,426 15% 45 Access to protease inhibitors capped*, transferred funds from other accounts, waiting list Maryland $8,750 – $29,400 4 1 11 11 $6,259,239 10% 406 Massachusetts <$27,000 p.a. 4 1 10 9 $7,970,714 46% 1,074 Transferred funds from other accounts Michigan 185% <500 CD4 4 1 6 5 $3,258,921 0% 178 Minnesota 300% 4 1 10 22 $841,003 0% 231 Mississippi 200% CD4 30k 1 0 6 2 $2,040,326 0% 415 Access to protease inhibitors capped*, reduced formulary*, transferred funds from other accounts Missouri 185% 4 1 12 47 $2,575,652 23% 842 Access to protease inhibitors capped*, waiting list Montana Need-based 4 0 0 1 $204,000 0% 18 Capped enrollment*, waiting list Nebraska 200% 4 1 6 12 $300,000 0% 59 Reduced formulary Nevada 200% CD4<500 0 0 5 0 $1,534,199 0% 151 Capped enrollment*, waiting list New Hampshire 300% 4 1 10 16 $403,500 0% 40 Restrictions on some formulary drugs*, access to protease inhibitors capped New Jersey <$30,000 p.a. 3 1 11 19 $16,753,868 4% 1,325 Reduced formulary* New Mexico 300% 4 1 9 20 $1,340,212 55% 375 Transferred funds from other accounts New York <$44,000 p.a. 4 2 14 182 $82,501,058 15% 6,183 Transferred funds from other account, reduced formulary North Carolina 125% 4 2 10 7 $3,710,201 20% 310 North Dakota 150% 4 0 13 37 $94,390 0% 14 Ohio 281% 4 1 6 5 $6,600,000 45% 424 Oklahoma 150% 3 0 6 2 $1,690,187 12% 243 Access to protease inhibitors capped*; per client dollar limits on drug costs*, waiting list Oregon 250% 0 0 2 2 $2,035,136 0% 99 Pennsylvania <$30,000 p.a. 3 0 13 30 $9,871,022 47% 1,125 Puerto Rico certified as indigent CD4 10k 3 0 13 87 $15,619,324 46% 2,320 Rhode Island 400% 4 1 9 5 $792,972 0% 57 South Carolina 300% CD4 <500 3 0 6 6 $3,386,578 15% 198 Capped enrollment*, transferred funds from other accounts, waiting list South Dakota 300% 0 1 8 19 $105,343 0% 30 Per client dollar limits on drug costs*; capped enrollment*; reduced formulary* , waiting list Tennessee 300% 3 0 7 4 $1,830,152 0% 147 Restrictions on use of protease inhibitors* Texas 200% 4 1 8 4 $17,088,684 16% 2,727 Reduced formulary*; restrictions on formulary drugs*, transferred funds from other accounts Utah 100% 4 1 0 0 $843,006 14% 79 Transferred funds from other accounts Vermont 200% 4 1 12 14 $374,611 20% 43 Reduced formulary*, waiting list, access to protease inhibitors capped Virginia 200% 4 0 7 1 $6,457,969 11% 700 Reduced formulary*, waiting list, access to protease inhibitors capped Washington 370% 3 1 10 42 $6,863,160 61% 430 transferred funds from other accounts, access to protease inhibitors capped, capped enrollment West Virginia 300% 4 1 2 5 $361,000 7% 39 Transferred funds from other accounts Wisconsin 200% 4 1 6 3 $1,500,001 20% 139 Wyoming 300% 4 0 13 36 $80,940 0% 44 Per client dollar limits on drug costs*, waiting list, capped enrollment
*1 Financial elgibility requirements listed are for a household of one. For more financial eligibility information, including asset limits and sliding scale co-pays, see the full NASTAD/ATDN Technical Report.
*2 All states require a diagnosis of HIV infection for ADAP enrollment.
*3 All state ADAPs cover the five nucleoside analog antiretroviral drugs (AZT, ddI, ddC, d4T, 3TC), except Louisiana where a separate state program provides these drugs through ambulatory care sites.
*4 Based on 1997 USPHS/IDSA Guidelines for the Prevention of Opportunistic Infections for Persons Infected with HIV (released June 27, 1997 MMWR, Vol. 46, No. RR-12).
*5 The number of clients served is usually fifty percent or less of the total enrollment for the month (percentage varies from state to state).Return to top
State AIDS Drug Assistance Programs: A National Status Report on Access:Press Release Report State Data
Despite Funding Increases In Recent Years, Many States Limiting AIDS Drug Assistance Programs (ADAPs) In Response To Growing Demand And Costs
Drugs Covered, Eligibility, and State Contribution Vary Widely Across State ADAPs
Embargoed for release until: 9:30 am, EST, Thursday, July 10, 1997
Washington, D.C. — As expensive new drug therapies prove more promising in treating peopleliving with HIV/AIDS, a survey of the nation’s 52 state AIDS Drug Assistance Programs, or ADAPs,finds that despite an 85 percent increase in total program spending between 1996 and 1997, morethan half imposed limits to cope with growing demand and costs. Thirty-five ADAPs enacted at leastone “emergency measure” in the last year:
As of this month, 23 ADAPs continue to have an emergency cost-containment measure in place.
The study, which was conducted for the Kaiser Family Foundation by the National Alliance of Stateand Territorial AIDS Directors and the AIDS Treatment Data Network, also found wide variationacross the nation’s ADAPs in terms of income and medical eligibility criteria, state contribution to theprogram, and drugs covered:
“At a time when new guidelines are calling for expanded access to AIDS drugs, state and federal policymakers face difficult decisions about how to meet the growing demand on state AIDS Drug AssistancePrograms,” said Sophia Chang, M.D., Director, HIV Programs, Kaiser Family Foundation.
In June of this year, the Public Health Service (PHS), part of the federal Department of Health andHuman Services, released draft guidelines for HIV antiretroviral therapy that recommend patients starton a combination drug treatment earlier in the course of the disease.The report concluded that theguidelines would put further pressure on state programs to finance needed drugs: “Although theimplications of implementing these new guidelines have not been established, they will likely increasepressure on state ADAPs to expand drug coverage and keep pace with expected client growth.””Unfortunately, many state ADAPs are unprepared to offer this standard of care to eligible patients whomay be candidates for triple combination therapy,” the researchers said.
Budget and Demand: What’s Been Happening Recently to ADAP?
Between 1996 and 1997, the overall ADAP budget including both federal and state contributionsincreased 85 percent from $208 million to $385 million. Over the last two years, ADAP budgetsnationally grew three-fold.
National ADAP Funding Source Changes Between 1996 and 1997Funding Source FY 1996(in millions) FY 1997(in millions) Percent Change Federal * $136.1 $ 249.6 + 83% State $ 53.7 $109.0 + 103% Other (includes Drug Rebates, Insurance Recovery) $ 17.7 $ 26.4 + 50% Total $207.5 $385.0 + 85% * Includes both Title I and II funds The report notes that while states may be reluctant to report ADAP budget shortfalls, at least in partbecause some state laws prohibit overspending of federal or state resources, in this survey elevenADAPs did indicate anticipating shortfalls in 1997: Alabama, Arizona, Arkansas, Colorado, Montana,New Mexico, Puerto Rico, Texas, Vermont, Washington State, and West Virginia. In addition, threeothers — Florida, Mississippi, and South Dakota — reported having had to severely limit services alreadythis year in response to increased demand and cost.
“While there has been a significant increase in both federal and state support to ADAP in the last year,states are spending their funds almost as soon as they receive them due to growing client demand andthe costly new standard of treatment. In many states, this translates into restricted access to AIDSdrugs,” said Joseph Kelly, Deputy Director, National Alliance of State and Territorial AIDS Directors.
Forty-two of the 52 ADAPs reported increases in the number of low-income HIV-positive people servedin the last six months of 1996, the most recent period for which information is available. Nationally, thenumber of clients served in December 1996 was 23 percent higher than in the previous July — anaverage increase of approximately 1,000 clients per month. Monthly program spending during the samesix month period increased overall by 37 percent, from $14.9 million to $20.4 million.
During the calendar year 1996, the national estimate of the total number of people served by ADAP was80,000. The report’s authors find that “in spite of very limited data, an estimate of those persons withHIV who would be eligible for the program range between 140,000 and 280,000 nationally,” a range thatwould imply a “two- to four-fold increase in potential ADAP clients.”
AIDS Drug Assistance Program, or ADAP, is a state-administered program that providesaccess to the drugs used to treat HIV and prevent the onset of related opportunistic infections forlow-income people living with HIV/AIDS who do not have adequate private or public healthinsurance. The program forms one link in the continuum of publicly-funded HIV care and servicesthat includes the Ryan White CARE Act, Medicaid, Medicare, and local indigent health careprograms. The 52 ADAPs — fifty states plus the District of Columbia and Puerto Rico — receivefederal funds through the Ryan White CARE Act. In 1997, thirty states contributed supplementaryfunding. In 1997 total federal and state ADAP spending was $385 million. States set the incomeand medical eligibility, determine which drugs will be covered and how they will be purchased anddistributed.
The Kaiser Family Foundation, based in Menlo Park, California, is a non-profit, independent nationalhealth care philanthropy and is not associated with Kaiser Permanente or Kaiser Industries. TheFoundation’s work is focused on four main areas: health policy, reproductive health, and HIV in theUnited States, and health and development in South Africa.
The National Alliance of State and Territorial AIDS Directors (NASTAD) represents the chiefHIV/AIDS program managers in every U.S. state and territorial health department responsible foradministering federally-funded HIV/AIDS prevention surveillance, health care, supportive service andhousing programs, including Title II of the Ryan White CARE Act. Established in 1992, NASTADprovides a forum for technical assistance and dissemination of information about effective HIVprevention and continuum of care programs among state AIDS directors.
The AIDS Treatment Data Network (ATDN) operates the Access Project, a nationwide database ofAIDS Drug Assistance Programs, Medicaid Programs and pharmaceutical industry-sponsored drugaccess programs, as well as provides information about drugs used to treat HIV/AIDS.
Copies of State AIDS Drug Assistance Programs: A National Status Report on Access can beordered by calling the Kaiser Family Foundation’s toll-free publications request line at 1-800/656-4533. (Ask for report #1275).
State AIDS Drug Assistance Programs: A National Status Report on Access:Press Release Report State Data
State AIDS Drug Assistance Programs: A National Status Report on Access
Acknowledgments
This report would not have been possible without the generous financial support of the Henry J. Kaiser Family Foundation and their continuing commitment to be at the forefront of HIV/AIDS policy issues. The authors would especially like to thank Dr. Mark D. Smith, who assisted with initiating the project and Dr. Sophia Chang and Tina Hoff of the Kaiser Family Foundation for their support, encouragement and expert advice in shaping this report.
We owe a great deal of gratitude to our project advisory committee members who reviewed and provided suggestions for this report and our national ADAP survey. They are: Moises Agosto, National Minority AIDS Council; Dr. Roxanne Cox-Iyamu, Whitman Walker Clinic; Anne Donnelly, Project Inform; Anita Eichler, Division of HIV Services (HRSA); T. Randolph Graydon, Health Care Financing Administration; Tracey Hooker, National Conference of State Legislatures; David Mulligan, Massachusetts Department of Public Health; Tracey Orloff, National Governors’ Association; Valerie Reeder, Heaven in View, Inc.; Gary Rose, formerly of AIDS Action Council and now with IssuesSphere; and Jane Silver, American Foundation for AIDS Research.
We also wish to express our gratitude to the members of the National Alliance of State and Territorial AIDS Directors (NASTAD) and the AIDS drug assistance program (ADAP) coordinators across the country for completing the national ADAP survey that was the basis for this report. We are truly grateful that, in the midst of a time of crisis, and often with minimal or non-existent staff support, these individuals took the time to respond to our survey and numerous follow up telephone calls.
Finally, special thanks to the state AIDS directors, ADAP program managers, state and federal officials and HIV/AIDS policy advocates who devoted additional time to review and provide feedback on the draft of this report. Their contributions, along with those of our project committee, have helped to make this summary report and its companion technical report among the most comprehensive and useful documents on the status of ADAPs ever published.
The principal authors of this report are Arnold Doyle, Richard Jefferys and Joseph Kelly.
The National ADAP Monitoring Project
In an effort to monitor the rapidly changing fiscal and scientific environments in which state AIDS drug assistance programs (ADAPs) are operating, and the impact of these changes on the programs and the individuals that they serve, the National Alliance of State and Territorial AIDS Directors (NASTAD) was commissioned by the Henry J. Kaiser Family Foundation, Menlo Park, CA to conduct a two-year National ADAP Monitoring Project. NASTAD is uniquely qualified to monitor the situation of state ADAPs as it is an association of the individuals who direct AIDS prevention, care and treatment services at the state level. NASTAD’s co-funded partner in the project, the AIDS Treatment Data Network (ATDN), is one of the most highly respected HIV/AIDS treatment information centers in the nation; ATDN maintains an on-line information library of the most recent treatment advances in HIV/AIDS, as well as detailed information on publicly- and privately-funded sources of reimbursement for HIV/AIDS treatments, including ADAPs.
Through the National ADAP Monitoring Project, NASTAD and ATDN will produce summary and comprehensive technical annual reports on the status of state ADAPs, with follow-up reports at six-month intervals, over the next two years. This July 1997 report provides a summary of the major findings of a national ADAP survey completed in March 1997. A longer, more comprehensive technical report based on the national survey is available through NASTAD at (202) 434-8090 or the Kaiser Family Foundation (800) 656-4533. Both the summary report and the technical report are also available for downloading from the Internet at http://www.aidsnyc.org/adap/. This Internet site, developed by ATDN, also contains detailed descriptive information about every state ADAP including program eligibility, application procedures, access and drug coverage. NASTAD and ATDN can also be reached at the following addresses:
AIDS Treatment Data Network611 Broadway, Suite 613New York, NY 10012-2809(800) 734-7104(212) 260-8869 FAX
Executive Summary
State AIDS drug assistance programs (ADAPs) provide access for people living with HIV/AIDS to medications that treat HIV disease and prevent the onset of opportunistic infections. State ADAPs serve as a critical lifeline for many low-income individuals living with HIV/AIDS in the United States who do not have public health insurance or adequate private health insurance. These state-administered drug reimbursement programs form one link in the continuum of publicly-funded HIV care and services available to low-income individuals supported by the Ryan White CARE Act, Medicaid, Medicare, and local indigent health care programs. The critical role that ADAPs play in improving access to HIV/AIDS treatments have made these programs the subject of increasing public scrutiny and debate.
ADAPs were developed to serve those who are uninsured and those who are underinsured and lack coverage for medications. Potential clients include those individuals who may not be disabled and therefore cannot qualify for government-sponsored health insurance programs like Medicaid. Within general federal guidelines established through the CARE (Comprehensive AIDS Resources Emergency) Act, states set unique program financial and medical eligibility criteria for their ADAPs, determine the type and number of drugs covered by the program (the ADAP formulary), and establish how covered drugs will be purchased and distributed to clients. This has led to wide variability among ADAPs from state to state vis-a-vis their structures, eligibility criteria, accessibility and the type and scope of prescription drug coverage available to clients.
In March of 1997, the National Alliance of State and Territorial AIDS Directors (NASTAD) in collaboration with the AIDS Treatment Data Network (ATDN) conducted a comprehensive survey for the Kaiser Family Foundation of all 52 AIDS programs in the United States that receive funds through Title II of the Ryan White CARE Act. The following is a summary of the major findings of this national study:
What’s Recently Been Happening With ADAPs?
How Accessible and Comprehensive Are ADAP Services?
Future Opportunities and Challenges
Background
Why Does ADAP Exist?
ADAP exists because there is a gap in access to coverage for medications for low-income people living with HIV/AIDS in the United States. ADAPs are intended to serve those who are uninsured, and those who are underinsured (lacking coverage for medications). These groups include those individuals who may not be disabled and therefore cannot qualify for government-sponsored health insurance programs like Medicaid. Since 1991, the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act has provided federal funding to states, localities, and community health centers to provide services for individuals with HIV/AIDS. Specifically, the funds are targeted to those who lack access to or insurance for primary medical care, medications, early diagnosis and treatment, and supportive services. The CARE Act allocates federal Title II funding directly to states and requires them to use a portion of these funds to provide HIV therapeutics, including prophylaxis and treatment of opportunistic infections, for low-income individuals.
The need for ADAP was first identified in 1987 when Congress provided an emergency appropriation of $30 million to states to establish a reimbursement mechanism for low-income individuals with HIV/AIDS to access AZT (Retrovir) — the first anti-HIV drug approved by the Food and Drug Administration (FDA). The rationale for public funding of AIDS drug assistance for low-income individuals was rather straight-forward. AZT was not cheap and individuals living with HIV/AIDS needed access to therapies to prolong and improve the quality of their lives regardless of their ability to pay. The need continued to be apparent and has more recently been placed into sharp focus with the advent of combination antiretroviral therapies, which include protease inhibitors. But these promising treatments are out of reach for many low-income individuals who lack public or private health insurance. That is precisely the reason why ADAPs exist and why they are currently struggling to keep pace with treatment advances, increased costs and client demand.
What is ADAP?
Currently, ADAPs are authorized under Title II of the Ryan White CARE Act, funded at the federal level by the Health Resources and Services Administration (HRSA) and managed by states. It is important to recognize that ADAPs are one piece of a larger health care puzzle for people living with HIV/AIDS. In fact, many state ADAPs are structured to wrap around public health care programs — Medicaid, Medicare and local indigent care programs — to ensure some continuity of access to outpatient HIV medications. Most state ADAPs are administered by the state public health departments, however, a few programs are administered by the state Medicaid agency, regional CARE-funded consortia, or by a contracted administrative agency.
Within general guidelines established by the federal government through the CARE Act, states set unique program financial and medical eligibility criteria for their ADAPs, determine the type and number of drugs covered by the program (the ADAP formulary), and establish how covered drugs will be purchased and distributed to clients. This has led to wide variability among ADAPs vis-a-vis their structures, eligibility, accessibility and the type and scope of prescription drug coverage available to eligible clients. There are several variables in each state which have led to this reality: 1) the size and demographics of the HIV/AIDS epidemic; 2) the traditional structure of public health and indigent health care systems; 3) the availability of state resources; 4) variations in Medicaid programs — including eligibility criteria, the type and extent of pharmacy benefits, and the existence of a managed care waiver which may limit drug coverage; and 5) state insurance regulations and economies which may affect private health insurance availability.
While there were relatively few treatments available to treat HIV/AIDS until recently, state ADAPs were relatively benign — albeit important — programs within the context of health care for people living with HIV/AIDS. However, in mid-1995, ADAPs began to experience explosive growth in the number of enrolled and utilizing clients, and in monthly expenditures. This growth was due mainly to the development of new treatments, including antiretrovirals and opportunistic infection prophylaxis/treatment.
What’s Recently Been Happening With ADAPs?
The great leap forward in HIV/AIDS treatment over the past year has been driven largely by combination anti-HIV regimens containing protease inhibitors. These therapies are known as antiretrovirals and attack HIV at different points during the virus’ replication process. The first rapid period of growth in ADAPs began with the approval of 3TC (Epivir) — a reverse transcriptase inhibitor, which was marketed shortly before the first protease inhibitor, saquinavir (Invirase), was approved in late 1995. In early 1996, two additional protease inhibitors, ritonavir (Norvir) and indinavir (Crixivan), received FDA approval. The licensure of these new drugs and their reported efficacy in slowing the progression of HIV disease sparked a resurgence of interest in antiretroviral therapy.
Faced with rising expenditures, a burgeoning number of clients, and finite resources, many ADAPs were forced to take measures to avoid bankrupting their programs. Among these measures were: capping program enrollment, restricting access to certain formulary medications, reducing drug coverage, and delaying or indefinitely suspending coverage of the new drugs. Increasingly, ADAPs were only able to fill a smaller portion of the gap between private insurance and Medicaid. Especially vulnerable were lower- and moderate-incidence states (states with relatively few reported AIDS cases) that receive less federal Ryan White CARE funding and often no state support. Other “safety net” programs — including drug manufacturer-sponsored patient assistance programs — were also inadequate to the task of ensuring continuity in prescription drug coverage for lower income individuals living with HIV/AIDS.
The appropriation of $52 million in federal emergency ADAP funding in fiscal year (FY) 1996 provided some relief to the programs. Many programs, however, were forced to continue waiting lists for enrollment, reduce formularies and restrict drug coverage. Throughout 1996, three major factors would continue to influence the ability of ADAPs to provide drugs to intended client populations: the emergence of combination antiretroviral therapy as a standard of care; increasing ADAP utilization; and the financial resources of the programs.
The Emerging Standard of Care
From November 1995 through April 1996 four new antiretroviral agents were approved by the FDA for the treatment of HIV; three of these new drugs belonged to a potent new class of antiretrovirals known as protease inhibitors. In the space of six months, the arsenal of antiretroviral drugs doubled. These new agents were also found to be more effective when used in combination, specifically the simultaneous use of three antiretrovirals.
The promise of these new drugs, however, has come with a steep price. The estimated cost of triple combination therapy, including a protease inhibitor, ranges from $10,000 to $15,000 per year. In June 1997, the U.S. Department of Health and Human Services (DHHS) released draft guidelines for the use of antiretroviral agents in HIV-infected adults and adolescents developed by the Panel on Clinical Practices for Treatment of HIV Infection convened by DHHS and the Henry J. Kaiser Family Foundation. These recommendations represent the current state of knowledge regarding the best strategies for implementing antiretroviral therapy for individuals with HIV/AIDS and may drive increased attention to and demand for HIV/AIDS therapies.
State AIDS Drug Assistance Programs: A National Status Report on Access:Press Release Report Part One Part Two State Data
State AIDS Drug Assistance Programs (ADAPs): A National Status Report on Access
A survey of AIDS Drug Assistance Programs or ADAPs, which provide drug financing for people living with HIV/AIDS who do not have private or public health insurance, in the fifty states and the District of Columbia and Puerto Rico. The study includes information on ADAP eligibilty requirements, budgets, state contribution to the program, drugs covered and “emergency measures” states have taken to contain costs.
For an updated report, please see National ADAP Monitoring Project: Interim Technical Report, #1379.
The ADAP Survey
Survey Methods
In an effort to monitor the impact of the environment on ADAP programs and the individuals they serve, the Henry J. Kaiser Family Foundation funded a two-year project, the National ADAP Monitoring Project, with the National Alliance of State and Territorial AIDS Directors (NASTAD). NASTAD is an association of the individuals who direct AIDS prevention, care and treatment services at the state level. NASTAD’s partner in the project is the AIDS Treatment Data Network (ATDN), a highly respected HIV/AIDS treatment information center, which maintains both an on-line information library as well as detailed information on publicly- and privately-funded sources of reimbursement for HIV treatments.
NASTAD/ATDN developed a written survey for distribution to state AIDS directors and ADAP program managers in the fifty states, the District of Columbia and Puerto Rico. An eleven-member project advisory committee provided input on the survey design, implementation, and reporting. The survey contained thirty-six questions to assess program operations/trends in the following areas:
The survey was fielded in mid-January 1997 and a total of 52 responses were received by mid-March. Follow-up telephone interviews were conducted to clarify submitted information and verify reported budget, expenditure, and utilization figures. States were asked to provide the total number of ADAP enrollees, the total number of utilizing ADAP clients and total monthly expenditures on pharmaceuticals for the months of July 1996 and December 1996. A “utilizing client” was defined as a client who received at least one prescription through the program during the given month. Actual and percentage increases/decreases in program client utilization and expenditures were calculated over the six month period.
NASTAD/ATDN took a snapshot of all state ADAPs in terms of clients served and program expenditures for the months of July 1996 and December 1996. In future surveys, we will be examining utilization trends by gathering information on the number of prescriptions filled and specific drug expenditures.
Recent Trends Among ADAPs: Clients Served and Expenditures
Based on the survey, the 52 ADAPs served 31,317 individuals during July 1996; that number increased by 23% to 38,500 individuals in December 1996. During the last six months of 1996, forty-two state ADAPs experienced increases in the number of utilizing clients (clients actually having prescriptions filled through the program). Some state ADAPs experienced a 50% percent or more increase in the number of clients served, including Arkansas (50%), Connecticut (64%), Kentucky (53%), Maryland (67%), and Utah (68%). During calendar year 1996, the national estimate of the number of clients served by ADAP was 80,000. (Annual estimates are limited due to monthly reporting and variable lengths of client tenure in the program.)
ADAPs also experienced significant increases in monthly expenditures during the last half of 1996. Program expenditures were reported to be $14.9 million in July 1996; expenditures grew 37% to $20.4 million. From June 1996 through December 1996, forty-four state ADAPs saw increased monthly program expenditures. Thirty-two ADAPs experienced increases of 20% or more and fourteen state programs saw expenditures rise by 50% or more in the last half of 1996. Several state ADAPs’ monthly expenditures rose by more than 100%, including Arkansas (104%), Connecticut (137%), Idaho (113%), Kentucky (103%), Maryland (116%), Mississippi (411%), North Dakota (101%), Texas (114%) and Utah (114%). The average per client cost among ADAPs nationally over the last six months of 1996 was approximately $506 per month or $6072 annualized.
These significant increases in program utilization and monthly expenditures occurred within the context of the discovery and approval of new treatments. They also occurred, at least initially, within the context of stable or incrementally increasing ADAP budgets. By mid-1996, it was apparent that the increasing demand for access to new therapies through ADAP would outstrip the financial resources of many of these programs.
ADAP Budgets: Federal and State Resources
The FY 1997 national ADAP budget totals $385 million and is composed of a variety of funding sources. These sources are:
In response to the shortages and the new demands for HIV/AIDS therapies, the national ADAP budget increased by $174 million (85% growth) between FY 1996 and FY 1997. The two most significant developments in the national ADAP budget picture in FY 1997 were the substantial increase in dedicated ADAP supplemental funding ($167 million total, representing a 221% growth over the previous year) and the doubling of state general revenue contributions nationally ($109 million total reported to NASTAD/ATDN, representing a 103% growth over FY 1996).
National ADAP Funding Source Changes Between 1996 and 1997 Funding Source FY 1996 FY 1997 % Change Title II Base (Federal): $58.2 million $59.9 million +3% Title II ADAP (Federal): $52.0 million $167 million +221% State Funds: $53.7 million $109 million +103% Title I (Federal): $25.9 million $22.7 million -12% Drug Rebates: $11.9 million $18.5 million +55% Insurance Recovery: $5.0 million $7.4 million +48% Other: $0.8 million $0.5 million -37% Total: $207.5 million $385 million +85% Congress appropriated an additional $115 million for Title II ADAP dedicated (or “supplemental”) funding for FY 1997. Federal ADAP supplemental funding has become the single most significant source of funding for most of the nation’s ADAPs, representing 43% of the national ADAP budget in FY 1997. As a line item, it represents the majority of state ADAP budgets in 32 states; in three states (Iowa, Minnesota and Tennessee) ADAP supplemental funding represents 100% of the total ADAP budget.
Thirty states contributed state-specific funding to ADAPs in FY 1997 totaling $109 million and representing 29% of the national ADAP budget. California is expected to provide the most substantial level of funding from its state general revenue fund to ADAP — $40.2 million. California’s state ADAP contribution represents 46% of its total FY 1997 ADAP budget of $87 million.
While at least 30 states are expected to provide funding for ADAP in FY 1997, at least 22 jurisdictions will not be providing state funding or are uncertain about contributions for FY 1997. The substantial growth in overall state funding of ADAPs nationally in FY 1997 is largely occurring within states that have previously provided state ADAP support. Variability in prescription drug benefits in state Medicaid programs — in terms of monthly limits on the number of prescriptions — represents an additional issue which complicates the ADAP budget picture in some states where ADAPs fill in the gaps in Medicaid coverage.
Emergency Measures to Sustain Programs
Despite the growth in ADAP budgets, the increase in client demand detailed in the survey has led numerous states to take emergency measures to sustain coverage of existing clients or make newer antiretroviral agents available. Thirty-five states reported taking at least one emergency measure in the last year in response to the crisis in ADAP funding and increased demand for combination therapies. Among the major emergency actions reported by state ADAPs:
ADAP Budget Shortfalls
NASTAD/ATDN asked states if they expect to encounter a shortfall in their ADAPs before the end of the Ryan White Title II FY 1997 budget period (April 1, 1997 — March 31, 1998). Despite the emergency measures undertaken to prevent funding shortages, eleven states responded that they predict a shortfall in FY 1997. The states reporting anticipated shortages are: Alabama, Arizona, Arkansas, Colorado, Montana, New Mexico, Puerto Rico, Texas, Vermont, Washington State and West Virginia. Anticipated shortages reported by the eleven states total over $8.5 million in FY 1997.
It is important to note that some respondents are reluctant to report anticipated shortfalls in ADAP budgets since some state laws/regulations prohibit overspending of federal or state resources. In addition, state administrations may not wish to publicize program shortages before making formal appeals to state legislatures for increased appropriations. Instead, some states will scale back ADAP services — by limiting enrollment or drug coverage — rather than report budget shortfalls. Several states, including Florida, Mississippi and South Dakota, have recently been forced to severely limit access to their ADAPs or substantially cut back on client services in order to sustain limited program operations for the coming year.
Additionally, every state has recently received significant infusions of Ryan White Title II base and/or supplemental funding for FY 1997 programs. It may be too early to predict program budget shortfalls in FY 1997. Several factors may hasten additional states to report shortages before the end of 1997. These include: 1) failure to obtain proposed state and other funding increases for ADAPs; 2) approval of additional high-cost HIV/AIDS therapies before the close of the fiscal year; and 3) the impact of the federal HIV clinical practice guidelines which may drive a greater demand for expanded treatments.
How Accessible and Comprehensive Are ADAP Services?
This section examines the eligibility criteria states establish for client entry into ADAPs based on financial and medical need, as well as the extent of pharmaceutical drug coverage across the states. In addition, the variety of ADAP drug purchasing and distribution structures that exist are described — structures that often determine the accessibility and fiscal status of programs. Finally, barriers to client access — typically resource shortages — are illustrated, including a gross estimate of potential ADAP demand.
Program Eligibility Criteria
Eligibility criteria for access to ADAPs are developed by each state and, therefore, vary from program to program. Eligibility criteria are established at the local level within the guidelines established by the Ryan White CARE Act. Eligibility criteria generally fall into two broad categories: financial eligibility and medical eligibility. Some ADAPs, however, have developed additional eligibility requirements for access to specific formulary drugs. All of these factors contribute to a picture of uneven access to ADAPs across the nation.
Financial Eligibility
The majority of ADAPs use federal poverty guidelines when assessing financial eligibility. The exceptions are Maryland, Massachusetts, New Jersey, New York, Pennsylvania and Puerto Rico. These programs have specific income criteria that do not change annually unlike the federal poverty levels. Montana requests that an applicant provides evidence that the cost of the covered medications will create a severe financial burden on his/her household.
All other state ADAPs specify a percentage of the current federal poverty levels for determining financial eligibility. These percentages can be absolute, or eligibility can be tiered to allow sliding-scale co-payments based on the applicant’s income. Some programs will take into account out-of-pocket medication expenses when determining income, a practice known as “spenddown.”
The ADAPs with the most restrictive income criteria are Arkansas and Utah, which specify an income below 100% of the federal poverty level for full admission to their programs. This would currently mean an annual income of $7,890 or less for one person. However, Arkansas takes into account medical expenses when assessing financial eligibility for their program. Utah operates a sliding scale co-payment system which relates to how much over 100% of the federal poverty level (FPL) the applicant earns.
Other programs with a low financial threshold for admission are Georgia and North Carolina, both requiring an income at or below 125% of the federal poverty level (FPL). In both states, this requirement is absolute and there is no provision for sliding scale co-payments or the consideration of out-of-pocket medical expenses. This is in contrast to the next most restrictive states, North Dakota and Oklahoma, which both require income to be at or below 150% of FPL. North Dakota allows sliding scale co-payments up to 200% of FPL. Oklahoma allows out-of-pocket medication costs to be taken into account when determining income. Florida reports that the income requirement for their program is 200% of FPL, but notes that applicants with incomes between 100% and 200% of FPL will be assessed for a sliding scale co-payment.
At the opposite end of the spectrum, ADAP programs in California, Hawaii, Idaho and Rhode Island require an income at or below 400% of FPL. California allows people earning more than this to make a sliding scale co-payment based on their annual state income tax liability and family size, up to a ceiling of $50,000 per year. It has been observed, however, that even in states that have relatively more generous eligibility criteria, the majority of ADAP clients are earning less than 200% of FPL.
Medical Eligibility Criteria
The basic medical criteria for enrollment into any ADAP is a diagnosis of HIV infection. Alabama, Florida, Georgia, Idaho, Indiana, Mississippi, Nevada and South Carolina also require that an applicant have a CD4 cell count of less than 500, although this can be waived for pregnant women and neonates needing AZT (for the reduction of perinatal HIV transmission). South Carolina also notes that the CD4 requirement can be waived but does not specify under which circumstances.
Kentucky currently requires a CD4 count of under 550 or a history of confirmed pneumocystis carinii pneumonia for enrollment in the program, although again this can be waived for pregnant women and neonates. Iowa requests that applicants have a recent CD4 count result available, but there is no specific CD4 requirement for entry into the program.
A new prognostic laboratory test known as the HIV viral load test is now being used to determine medical eligibility for some ADAPs. The viral load test measures the amount of viral genetic material, known as HIV RNA, in a blood sample. Maine states that a CD4 count of under 400 or a viral load test result of over 20,000 copies/ml is required for admission into the program. Mississippi requires a CD4 count under 500 or a viral load test result of over 30,000 copies/ml. Puerto Rico specifies that the CD4 count be under 500 or the viral load be over 10,000/ml. Louisiana and Virginia require that new applicants have a recent viral load test result available but there is no specific viral load requirement for program entry.
ADAP Drug Formularies
States determine both the number and type of drugs that are available on their state ADAP formulary. Hence, there is a significant variation in the size and composition of ADAP formularies from state to state. ADAP formulary drugs fall into two main categories: antiretrovirals, which target HIV directly, and drugs to treat and/or prevent opportunistic infections.
New York’s ADAP offers the most comprehensive formulary, totaling 214 drugs, hepatitis vaccines and a variety of nutritional supplements and vitamins. This is commensurate with having the largest budget of any ADAP next to California. At the other end of the spectrum is the Louisiana ADAP which covers three drugs — all of which are protease inhibitors. An additional HIV drug formulary, however, is available to low-income state residents through several ambulatory care sites throughout the state, provided under the auspices of the Louisiana Health Care Authority (LHCA). There are plans to combine the state-funded LHCA program with the federally-funded ADAP in order to provide a more uniform HIV pharmaceutical assistance program for people living with HIV in Louisiana.
Although HIV incidence within a state, number of clients served and total budget might be expected to impact upon the comprehensiveness of an ADAP drug formulary, this is not always the case. North Dakota currently offers one of the largest formularies in the nation, although it has the smallest budget of any ADAP. North Dakota also served just fourteen clients during January 1997, making it the second smallest program next to Alaska in terms of clients served.
Antiretrovirals
At the time of our survey, three protease inhibitors were commercially available: saquinavir (Invirase), ritonavir (Norvir) and indinavir (Crixivan). Saquinavir was approved in December 1995, with ritonavir and indinavir approved by the Food & Drug Administration in March of 1996. On March 14, 1997, following the completion deadline for the ADAP survey, a fourth protease inhibitor, nelfinavir (Viracept), received FDA approval.
Four state ADAPs report that they do not cover any protease inhibitors: Arkansas, Nevada, Oregon, and South Dakota. Arkansas notes that formulary expansion is planned, but mentions no specific date. Nevada is considering adding new drugs if state funding can be secured. Oregon’s ADAP reports that formulary expansion may be possible if the ADAP can successfully move more ADAP clients on to more comprehensive health insurance coverage. South Dakota estimates that the program would require an additional $150,000 a year in funding to provide protease inhibitors to eligible clients. Two state ADAPs (Mississippi and Idaho) cover only one of the four approved protease inhibitors as of July 1997. Another thirty-two state ADAPs cover all four protease inhibitors; two of those states (New York and North Carolina) also cover all available antiretroviral drugs.
All ADAP programs, with the exception of Louisiana, offer all five approved nucleoside analog antiretroviral drugs: zidovudine (AZT, Retrovir), didanosine (ddI, Videx), zalcitabine (ddC, HIVID), stavudine (d4T, Zerit) and lamivudine (3TC, Epivir). Some programs, however, may restrict access to these drugs based on specific medical criteria.
Opportunistic Infection Medications
Drugs for the treatment and prevention of opportunistic infections (OIs) have significantly improved the length and quality of the lives of people with AIDS. The preventive treatments available for pneumocystis carinii pneumonia (PCP), for example, have extended survival after an AIDS diagnosis.
Most ADAPs offer some of the available OI drugs, but it is in this category of drug coverage that the widest variability is found across the states. In 1995, the Infectious Disease Society of America (IDSA) in conjunction with the U.S. Public Health Service (PHS) issued Guidelines for the Prevention of Opportunistic Infections in Persons Infected with Human Immunodeficiency Virus. The drugs referenced in these guidelines as “strongly recommended” for the prevention of OIs include: TMP/SMX, dapsone, pentamidine, pyrimethamine, leucovorin, sulfadiazine, clindamycin, fluconazole, itraconazole, isoniazid, foscarnet, ganciclovir and acyclovir. Currently, five ADAPs (10%) report that they have these drugs available on their formularies: Illinois, New York, North Dakota, Pennsylvania and Wyoming.
Currently, there are three drugs approved for the prevention of another common OI, Mycobacterium avium complex (MAC): rifabutin, clarithromycin and azithromycin. All of these treatments have demonstrated a clear ability to prevent MAC and two have also been associated with a distinct survival benefit. Thirty ADAPs cover all three of these drugs. Five ADAPs offer two of these drugs while six ADAPs cover only one.
A revised, updated ISDA/PHS document was released on June 27, 1997, containing fourteen drugs which are strongly recommended for the prevention of OIs. Two state ADAPs (New York and Illinois) currently cover all fourteen drugs on their formularies. Nine additional state ADAPs cover 80% or more of the highly recommended drugs. Five state ADAPs cover none of the highly recommended OI prophylactic drugs.
Drug Purchasing And Distribution Systems
The drug purchasing and distribution systems of state ADAPs have been under increasing scrutiny from Congress, the Administration and HIV/AIDS advocacy organizations over the past several months. The heightened interest is focused on state ADAPs’ ability to take advantage of available drug discounting mechanisms. In order to serve increasing numbers of potential clients while covering new and promising therapies (protease inhibitors in particular), states must carefully evaluate their drug purchasing and distribution systems in order to meet these challenges with finite resources.
The methods that state ADAPs use to purchase formulary drugs may be classified generally as either:
State ADAPs that purchase drugs directly usually have a centralized mechanism for dispensing drugs to clients. For example, drugs purchased through a central state pharmacy may be distributed through a network of local public health clinics/hospitals, sent directly to clients, or distributed through clients’ physicians. These “direct purchase” ADAPs participate in federal discount drug pricing programs such as Section 602 of the Veteran’s Health Care Act.1 Another mechanism for state drug distribution is to allow ADAP eligible clients to receive drugs through their neighborhood drug store or local pharmacy networks. These “indirect purchase” ADAPs may in turn obtain rebates from pharmaceutical manufacturers to achieve cost containment and recovery. All states currently report using one or more cost containment measures — which include use of purchasing discounts, rebates or other cost savings mechanisms — or are making progress toward achieving the lowest possible costs for formulary medications.
Barriers to Serving Potential Clients
ADAPs, by statute, are intended to provide pharmaceutical assistance to low-income, uninsured and underinsured individuals. This may include lower-income individuals who: have no private insurance coverage, have inadequate prescription coverage through their private insurance or do not meet financial, disability or other criteria for Medicaid. There has been little effort in the past to identify the barriers that ADAP programs face in attempting to serve intended client populations.
States were asked to list the barriers, in order of severity, that impact on their ability to serve intended client populations. Twenty-four states indicated that inadequate funding is the primary barrier. Six states cited various administrative issues as another barrier to adequate service delivery and six indicated that lack of adequate service coordination with other providers — especially in rural areas — was a barrier to the adequate provision of service. Four states identified lack of coordination with the state Medicaid program as a barrier.
There are currently no national projections of the potential universe of ADAP clients who could be served in the absence of the identified barriers. According to the Centers for Disease Control and Prevention (CDC), twenty-eight states collect data on HIV infection rates in addition to AIDS cases, and two of these states only collect information on new HIV infections for infants. The lack of sufficient data on reported HIV infection in all states, in addition to a lack of a current and complete assessment of the numbers of HIV-infected individuals and individuals with AIDS who have adequate private insurance and/or Medicaid, makes a precise estimate of the potential ADAP client population problematic.
A gross estimate of potential demand for ADAPs nationally, however, can be extrapolated from existing published data sources. CDC estimates that there were 650,000-900,000 individuals with HIV in the U.S. in 1992. Based on a 1994 published study on AIDS cost and services utilization (ACSUS) from the federal Agency for Health Care Policy Research (AHCPR), approximately 21.4% of persons with symptomatic HIV disease receiving care in the U.S. have no health insurance coverage.2 This population would represent those for whom triple therapy would be uniformly recommended and who would generally be eligible for an ADAP program (although no income information is available). This number is likely an underestimate of those who are uninsured who would be eligible for HIV therapy and does not include any estimates of the number of underinsured. This number is likely an overestimate of those who are aware of their HIV status and in care. Based on these estimates, between 140,000 to 280,000 individuals could potentially be eligible for the ADAP program. This number represents a two- to four-fold increase from the current estimate of 80,000 clients being served nationally on an annual basis.
Future Opportunities and Challenges
The information obtained from this survey paints a complex and often paradoxical picture of state ADAP programs. Although federal and some state contributions to these programs have increased dramatically over the past two years, evidence from many states indicates that resources remain insufficient to adequately serve people living with HIV/AIDS. As promising new treatments have become available, many ADAPs have sought to include these drugs on their formularies, yet many ADAPs are also faced with making difficult decisions regarding who may have access to these treatments due to severe budget constraints. Some state ADAP formularies offer a large menu of HIV and OI drugs, while others offer only a few.
For many individuals, ADAPs represent the primary — and sometimes the sole — source of access to medications which may significantly improve the quality and length of their lives. The high cost of combination antiretroviral therapy may be out of reach for individuals who continue to work and have no or inadequate insurance coverage, and who are not ill or poor enough to qualify for Medicaid. These individuals may also be excluded from eligibility for ADAPs based on financial or medical eligibility restrictions.
There is a growing body of literature which suggests that the use of combination therapy including protease inhibitors is a potentially cost-effective means of providing care for people living with HIV/AIDS. In fact, when compared with the cost-effectiveness of other commonly-used medical interventions, combination antiretroviral therapy is shown to be an economically sound investment in terms of cost per year of life saved.3 Making appropriate treatment available to people living with HIV/AIDS is not only medically and ethically supported, it may also make sound economic sense as well.
Future Considerations
Given the growing demand upon ADAP programs and the resulting cost implications — coupled with the tightening federal and state budget scenarios over the next several years — it appears likely that ADAPs, as they currently exist, are not prepared to fill the ever-increasing coverage gap for people living with HIV. From its inception, ADAP was designed to fill in a service gap and that gap is widening. Several proposals have recently been forwarded to help improve access to treatments for people living with HIV/AIDS. One such proposal would allow states to extend limited Medicaid benefits, including coverage for antiretroviral therapy, to individuals with HIV who do not meet disability criteria for access to Medicaid.
Among the major opportunities and challenges facing ADAPs in the future:
Footnotes
1 Section 602 of the Veteran’s Health Care Act stipulates that state ADAPs, along with certain other federally-funded programs, can purchase covered drugs at discounted prices. The discount rate available to ADAPs under the 602 program is equal to the rebate amount that manufacturers are mandated to pay to state Medicaid programs.
2 Schur, C.L., and Berk, M.L.: Health Insurance Coverage of Persons With HIV-Related Illness: Data From the ACSUS Screener. AIDS Cost and Services Utilization Survey (ACSUS) Report, No. 2. AHCPR Pub. No. 94-0009. Rockville, MD: Agency for Health Care Policy and Research, 1994.
3 Moore, R.D. and Bartlett, J.G.: Combination Antiretroviral Therapy in HIV Infection: An Economic Perspective. PharmacoEconomics, 1996, Aug: 10(2): 109-113.
State AIDS Drug Assistance Programs: A National Status Report on Access:Press Release Report Part One Part Two State Data