Prescription Drugs and Medicaid:

Automated Review Systems Can Help Promote Safety, Save Money

AIMD-96-72: Published: Jun 11, 1996. Publicly Released: Jul 11, 1996.


Joel C. Willemssen
(202) 512-6253


Office of Public Affairs
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Pursuant to a congressional request, GAO reviewed states' experiences with automated prospective drug utilization review (PRODUR) systems in their Medicaid programs, focusing on: (1) how these systems can improve patient safety, control program costs, and reduce fraud, waste, and abuse; and (2) impediments to effective implementation of PRODUR systems.

GAO found that: (1) between January 1994 and June 1995, PRODUR systems reviewed screened over 31.7 million prescription drug claims, and alerted pharmacists to potentially inappropriate drug treatments; (2) over 650,000 prescriptions were cancelled because of potential risks to patients; (3) PRODUR systems have reduced Medicaid costs by denying prescriptions to ineligible recipients, preventing hospitalizations due to illnesses caused by inappropriately prescribed drugs, and detecting and eliminating fraud and abuse; (4) PRODUR systems are more cost-effective than traditional review systems; (5) states implement their PRODUR systems differently because there is no guidance on PRODUR system implementation; and (6) each state has its own drug utilization review board which independently sets screening criteria and policies, but states have no systematic way to share experiences and best practices.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: Given the substantial safety benefits that can accrue to Medicaid recipients and the strong potential for immediate savings to the Medicaid program through the effective use of automated PRODUR systems, the Secretary of Health and Human Services should direct the Administrator, Health Care Financing Administration, to actively facilitate state sharing of information on the most efficient use of PRODUR systems. One way would be to quickly help establish a working group or other such forum for coordinating the collecting and sharing of information on best practices for automated PRODUR programs, on a nationwide basis.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: HCFA did not actively facilitate sharing information with the states on the most efficient use of PRODUR systems. However, GAO identified in a February 1997 follow-up survey, that the states received copies of the report and that this report was instrumental in many of these states implementing automated PRODUR systems. Moreover, several states told GAO they implemented some or all of the best practices identified in the report.

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