National Alliance on Mental Illness
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Executive Summary

The NAMI Board of Directors has charged NPRI’s Access to Medications Task Force to examine the available evidence on trends, practices and alternatives to limit access to medications for people with severe mental illness, and to provide policy guidance on this issue to the Board. This report to the Board provides a comprehensive strategy for addressing threats to access to medications.

The Task Force identified the following guidelines, which served as a basis for the policy recommendations to the Board:

  • First, Do No Harm
  • Ensure that Benefits Outweigh Costs
  • Focus on Long-Term Value
  • Keep Doors Open
  • Ensure that Treatment is Based on the Best Science

The policy recommendations fall into three major categories: federal, state and community and are arranged by legislative, regulatory, legal and evidence-based initiatives.

Federal Strategies

Legislative Initiatives

  • Support increases in the Federal Medical Assistance Percentage or FMAP to address state budget problems.
  • Support appropriate, emerging legislation to expand prescription drug coverage to Medicare beneficiaries.
  • Support system-wide health care reform to ensure access to the most effective treatments.

Regulatory Initiatives

  • Press CMS to provide written guidance to Medicaid directors on legal authority to provide carve-outs for pyschotropic medications.

Evidence-Based Research

  • Support increased funding allocations to NIMH to gain better insights on access to new medications.
  • Support increased funding to AHRQ for research on evidence-based practices.

State Strategies

Legislative Initiatives

  • Promote and develop model language on medication carve-outs.
  • Oppose the use of fail-first cost containment provisions.
  • Advocates should participate in meetings at all levels of state government to ensure access to medications.
  • Support efforts by pharmaceutical companies to develop new medications but oppose pricing practices that make these medications unaffordable.

Regulatory Initiatives

  • Advocacy efforts should support the development of notification, grievance and appeals procedures to protect Medicaid recipients with severe mental illness.

Legal Initiatives

  • Participate, as appropriate, in class-action suits, and file amicus briefs, that would oppose restricting Medicaid Clients’ access to prescription drugs through prior authorization programs
  • Build coalitions with interest groups who have similar objectives on access to medications.

Evidence-Based Initiatives

  • Support Polypharmacy Education Programs as an alternative to restrictive cost containment programs.
  • Support development of explicit protocols with rigorous follow-up assessments.

Community Strategies

  • Work closely with key stakeholders on Medicaid medication issues.
  • Engage the media aggressively on potential implications of impeding access to needed medications.

The Task Force also recommended a set of deliverables that NAMI should develop to facilitate the actions proposed in this report to the Board.


States face increasingly difficult fiscal situations. State tax revenues are falling more sharply than they have at any time in the past ten years and Medicaid health care costs are skyrocketing. Spending on prescription drugs is the fastest growing proportion of Medicaid spending.

While spending on prescription drugs accounts for around 10 percent of total spending on health care in the U.S., recently, prescription drug costs have contributed disproportionately, to the sharp upturn in overall health care costs. As a result, prescription drugs are consuming a growing share of Medicaid dollars, accounting for 10 percent of Medicaid spending. Moreover, Medicaid spending on prescription drugs has increased 18 percent annually for the last three years.

Increased spending on prescription drugs for the Medicaid population is being driven by four factors:

  • More drugs are being prescribed;
  • Newer, more effective and more costly brand-name drugs are being prescribed;
  • Prices for all prescription drugs are rising rapidly, and
  • Newly approved medicines are being more heavily marketed to both doctors and consumers.

To control pharmaceutical spending, a number of states have adopted or are considering restrictions on access to certain types of more expensive medications, including psychotropic medications, in their Medicaid programs. States will be attempting to improve their capacity to control drug costs in the following ways:

  • By placing certain drugs on a list requiring prior authorization before dispensing;
  • By using preferred drug lists and requiring supplemental rebates from pharmaceutical companies;
  • By limiting the number of prescriptions per month an individual can fill either in total or without prior authorization
  • By requiring mandatory substitution of generic drugs; and
  • By forming Pharmacy and Therapeutic Committees to advise Governors and Medicaid Departments on policy and programmatic issues related to Medicaid and prescription drug benefits.

All of these options are being given serious consideration by states as they struggle to control Medicaid expenditures on prescription drugs. Prior authorization proposals have appeared in legislation, appropriations bills and regulations. They pose significant threats for Medicaid recipients with mental illnesses trying to access medications prescribed by their treating physician.

It is current NAMI policy that decisions regarding specific medications prescribed to persons with severe mental illness should be based on the clinical judgments of treatment providers, not on economic factors. NAMI strongly opposes measures that limit access to treatment with psychotropic medications such as atypical antipsychotics and selective serotonin reuptake inhibitors.

In response to the developing threats to access to medications for people with severe mental illness, the NAMI Policy Research Institute’s Access to Medications Task Force was created and charged by the NAMI Board of Directors to examine the available evidence and provide policy guidance on this issue to the NAMI Board, NAMI’s grassroots advocates, and policymakers.

The Access to Medications Task Force met on December 9, 2002 to:

  • Review the trends, practices and alternatives in pharmaceutical cost containment; and
  • Discuss and develop recommendations and strategy.

An agenda and supporting material for the task force meeting are included in the enclosed binder for your information.

Development of Guidelines

To organize its work, the Access to Medication Task Force developed guidelines for its deliberations. The policies that flow from these guidelines were based on extensive discussions and they address both short and long term issues as well as the needs and interests of NAMI’s members at federal, state and local levels.


  • Do No Harm

Cost containment and stringent utilization controls often hurts access. Prescription drugs are essential to the recovery and continuing health of most people with severe mental illness. Ensuring access to the most effective psychotropic medications is essential.

  • Ensure that Benefits Outweigh Costs

Pharmaceutical companies must bring drugs to the market place at reasonable and affordable prices. At the same time, state agencies must provide sufficient funding to guarantee access to potentially cost-saving medications and must avoid regulations that simply shift healthcare costs.

Appropriate medication is as important to recovery from mental illnesses as it is for recovery from somatic illnesses. It offers the same alternative to more expensive care and treatment in both cases. If policymakers choose to do less for fewer people with mental illness, the cost of this neglect will not only be counted in human suffering, it will reappear in other areas of their budgets and/or in other levels of government.

Policymakers should weigh the costs of any strategy being considered against the anticipated benefits. Medicaid programs must measure the costs and health consequences and identify the risks inherent in a strategy. Cost containment and accountability must go hand in hand.

Rising pharmacy costs must be understood as part of the larger picture: dramatic reductions in long-term hospitalizations and criminalization result from access to effective medication, comprehensive outpatient treatment and timely short term inpatient treatment. We need to ensure that people with mental illnesses have adequate medications so fewer people end up being hospitalized longer than necessary or inappropriately incarcerated.

  • Focus on Long-Term Value

The mission of an effective patient care system is to deliver long-term value to the patient and society. Improving clinical quality by using evidence-based prescribing practices may require short-term investments and garner long-term savings.

  • Keep Doors Open

It is very likely that using prior authorization programs along with other cost controls will reduce the medication compliance of people with severe mental illness. Previous implementation of multiple cost containment programs led to a significant number of persons with severe mental illness not receiving their medications. Barriers to appropriate care should be avoided. If individuals are denied access to medications, adverse events or outcomes should be reported by a physician charged with that responsibility. We believe this requirement is consistent with evidence-based health care practice.

  • Ensure that Treatment is Based on the Best Science

Will advances in the pharmaceutical treatment of mental illness add to overall health care costs or yield savings as they supplant or reduce the need for other costly treatments? Patients should receive care based on the best available scientific knowledge. Cost control paradigms may reduce pressure on specific budget line items and they may be designed to minimize access concerns but they do not and are not designed to ensure quality care.

Access to psychotropic medications should not vary from state to state or from clinician to clinician because of cost containment decisions made by policymakers. Policymakers should base their decisions on the best available data from research on the cost benefit of the new generation of psychotropic medications. The Task force believes that access to medications should focus on a disease management approach to treatment.

Recommendations of the Access to Medications Task Force

The Task Force recommends that NAMI pursue the following strategies to ensure open access to medications in the current budget deficit environment. They should be seen as an integrated, comprehensive approach to addressing the needs and interests of the people we serve.

Federal Strategies

Legislative Initiatives

1. Support an Increase in FMAP

The federal government reimburses states for a substantial portion of their Medicaid costs. The Medicaid budget problems that states are experiencing are being exacerbated by reductions in federal Medicaid matching payments to some states. These payments are based on the "Federal Medical Assistance Percentage" or FMAP. The FMAP is determined by historical economic data. The current FMAP rates are based on data from years prior to the recession, placing a number of states in the position of having to fund their Medicaid programs with fewer federal dollars at a time when states are facing record state revenue shortfalls.

Realizing the service, infrastructure, and community economic impacts of the loss of federal funds if states cut back on their Medicaid spending, governors are aggressively supporting initiatives in Congress that will increase the federal match rates. Governors are also aware that there are serious implications regarding the safety of patients, cooperation of unions and loss of accreditation for Medicaid funds as state hospital staff cuts reach dangerous levels. Proponents of an FMAP increase contend that increased federal support will temper the need for drastic cuts in Medicaid programs.

NAMI should support congressional legislative efforts to increase FMAP in 2003, and work closely with the National Governors’ Association, Association of County Commissioners and Association of State Legislators as they work to increase federal Medicaid matching rates.

  1. Medicare Prescription Drug Benefit

    NAMI should closely monitor and support appropriate, emerging legislative initiatives to expand prescription drug coverage for Medicare beneficiaries. State pressure to control prescription drug spending will mount in the absence of a Medicare drug benefit. Many states must pay the expense of drug assistance programs for Medicare beneficiaries who do not have incomes low enough to qualify for Medicaid. They must also provide the state match for dually eligible recipients under Medicaid. The federalization of prescription drug expenses for these groups through the provision of a Medicare drug benefit has profound implications for state budgets and for the Medicaid program.

  2. Support System-Wide Health Care Reform

The Access Task Force supports systemic health care reform to address the coverage, cost and quality problems in the health care delivery and financing system. NAMI should monitor systemic health care reform initiatives and support those that lead to better access to the most effective treatments. NAMI should participate in appropriate hearings and meetings addressing mental illness system reform and health care system reform. These two initiatives are inextricably intertwined.

Specifically, as a part of mental illness system reform, an information and tracking system should be established to support officials (e.g., a physicians), who are responsible, for monitoring individuals served and individuals denied service. It is critically important that a risk management type-officer be held accountable for monitoring and keeping appropriate records, otherwise reform efforts will be slowed. There must be better data collection processes at the state level, with federal oversight, so that a reasonable evaluation of the system of care can occur.

The President’s New Freedom Commission should address these issues in their final report.

Regulatory Initiatives

NAMI should continue to press the Center for Medicaid and State Operations within the Centers for Medicare and Medicaid Services, to provide written guidance to state directors advising them of both their legal authority to create carve outs for medications for severe mental illnesses and the policy justification for such a measure. We believe that such guidance is consistent with federal Medicaid law and the current Administration’s policy with respect to access to treatment for people with disabilities.

Evidence-Based Research

NAMI supports increased research budget allocations to the National Institute of Mental Health. That research will develop a better understanding of access to services and treatment as well as the potential impact of the new generation of psychotropic medications. It would enable NAMI and other advocates to identify evidence-based practices that should shape public policy recommendations.

NAMI also supports increased funding for the Agency for Healthcare Research and Quality (AHRQ) initiatives that translate research into evidence-based practices. AHRQ should sponsor research on newer psychotropic medications compared to older medications, so patients receive medical care based on the best available scientific knowledge.

NAMI should monitor the TMAP initiative (see below) to determine if its protocols can lead to more effective and more cost-effective, prescribing practices.

State Strategies

Legislative Initiatives

1. Exemption of Psychotropic Medications

Carve Outs

NAMI should promote and develop model language on carve-outs for anti-psychotic, anti-depressant, anti-anxiety and anti-convulsant medications as a starting point in discussions with state officials. The language should include a narrower carve-out like "anti-psychotic medications only," which should be considered only as a last resort, when a broader approach is not politically or economically achievable.


Advocates should emphatically oppose the use of fail-first provisions prior to authorization of state-of-the-art psychiatric medications.

  1. Monitor and Participate in the Budget Process – "Do Not Balance State Budgets on the Backs of Vulnerable Populations"

    NAMI must make it clear, in the appropriations process, that adequate funding of the state’s mental health care system is critical to ensure the health of the state’s citizens and communities. People with severe mental illness are the most vulnerable consumers – removing access to treatment is life threatening and provides no cost savings to the state over the long term.

    Adequate funding and support of a strong mental health system and Medicaid program in every state must be one of NAMI’s highest priorities. The Task Force supports the development of a tracking system that would identify which individuals are or are not served. It is important to be able to document that our nation’s failure to provide adequate services for children and adults with mental illnesses has resulted in a crisis for schools, families, communities, and the states.

    To further influence policy on access, NAMI advocates should arrange meetings with state Medicaid officials and officials in the executive branch, as well as with state policymakers and their staffs.

  2. Pharmaceutical Pricing

The Task Force supports research and development efforts that support the development of new and effective medications. However, NAMI must not support pricing practices which make these same medications inaccessible to mentally ill people who depend on them. NAMI should monitor efforts on the part of pharmaceutical companies to not only contain but also reduce costs and to bring to market affordable medications. NAMI should monitor efforts by states to contain the cost of medications through more efficient purchasing arrangements that control the rate of escalation in prescription drug costs without harming access to medications.

Regulatory Initiatives

  1. Notification, Grievance and Appeals Procedures

Additional advocacy efforts should insist on procedures to protect Medicaid recipients with severe mental illness from harm.

The following actions are recommended:

  • Where carveouts are not attainable, informed clinicians must be involved in the development of any formularies and in making prior authorization determinations. All Pharmacy and Therapeutic Committees must include at least one practicing psychiatrist.
  • A simple and fully accessible system must be created for requesting prior authorization by phone or fax, including the broad dissemination of easy to use prior authorization forms to all participating medical service providers.
  • A short turnaround time for obtaining a response to requests for prior authorization (two hours) must be operational, with the full amount originally prescribed automatically approved, if the Department is not able to make verbal contact with the prescriber within two hours of the request.
  • When decisions to deny medications are appealed, a limited (ten day) supply of the originally prescribed drug must be provided.
  • An expedited appeal procedure must be followed whenever an appeal is filed following the denial of a medication. All appeals should be decided within 10 days of the date the appeal is filed.

A person, ideally a physician, should be appointed by the governor to see that all individuals served or denied care are tracked and that all adverse events are reported in a timely and pubic manner.

Legal Initiatives

  1. Class-Action Suits

    It is clear from presentations to the Task Force, that Medicaid prior authorization programs are high risk cost containment strategies and they are not an effective management strategy based on private sector experience. Based on data from Florida that was collected in April 2002, about 35,000 people who sought medications left the pharmacy without filling their prescriptions. It is estimated that nearly one-third of those consumers never received their medications. Another 22,000 people received a different medication or less than the amount prescribed. It is clear to the Task Force that the consequences for people with severe mental illness will be devastating in Florida and other states if Medicaid prior authorization programs become more commonplace. Prior authorization programs may help state Medicaid programs control their budgets in the short term, but unintended consequences such as increases in the costs of hospitalization and incarceration in the criminal justice system will offset any savings.

    Further, the Task Force heard presentations that supplemental rebate programs are confusing to consumers and physicians because they may not be aware of when a drug is covered or not at any given time.

    Additional testimony highlighted that states can only exclude eight categories of drugs from their Medicaid formularies and still comply with federal rules. These include "lifestyle drugs", investigational drugs, smoking cessation products and drugs that pose a high risk of abuse.

    Therefore, NAMI should closely track state supplemental rebate reform initiatives and exclusions from formularies as part of its overall legal strategy. NAMI should consider participating in class-action suits that would oppose restricting low-income Medicaid clients’ access to prescription drugs through burdensome prior authorization requirements, in order to extract supplemental rebates from drug manufacturers in exchange for preferred drug list (PDL) inclusion.

    NAMI should consider filing amicus briefs and should support efforts to maintain access to treatment through other court actions.

  2. Align with Appropriate Groups – Build Coalitions

NAMI should work with broad-based coalitions of consumers, providers, legal rights groups, other health care advocacy organizations, and other appropriate groups to support such initiatives. Establishing short-term broad-based coalitions with interest groups who have similar objectives regarding access to prescription drugs can enhance NAMI’s effectiveness on the access issue.

Evidence-Based Initiatives

  1. Support Polypharmacy Education Programs

    Massachusetts Medicaid and Mental Health Departments have introduced a voluntary polypharmacy review process, with medical service provider education and compliance tracking, as an alternative to a preferred drug list. By educating prescribers and applying prior authorization procedures to polypharmacy practices for which there is minimal or no evidence base, Medicaid agencies may be able to improve care and moderate increases in expenditures for psychotropic medications. The Task Force heard that recent research points to significant physical health risk to patients who are taking multiple psychotropic medications. The Massachusetts approach is an attempt to change the clinical culture and to actively engage physicians in a dialogue about prescribing practices.

    NAMI should support adjunctive pharmacy, which is defined as the use of an antipsychotic medication with one or more additional psychoactive medications (including another antipsychotic) when monotherapy options have been exhausted or specific psychiatric symptoms are being targeted.

  2. Support and Expand Development of Explicit Protocols

NAMI should encourage the use of clinically tested medication algorithms to ensure the utilization of evidence-based medication practices. The Texas Medication Algorithm Project (TMAP) has produced treatment algorithms (including prescription drug therapy) for three serious mental illnesses – schizophrenia, major depressive disorder and bipolar disease. The paradigm has been adopted in other states. NAMI should support the continued development and evaluation of the efficacy of TMAP as an alternative to Medicaid cost containment strategies.

Community Strategies

  1. Work with County Commissioners

Advocates should contact their county commissioners, mental health directors and other local stakeholders to collaborate in engaging state Medicaid agencies on the access issue.

2. Work the Media

Advocates should contact the media’s health care reporters to discuss the potential implications of impeding access to prescription drugs.

Deliverables Requested by the Task Force

The NAMI Policy Research Institute has recently developed a comprehensive and integrated set of products (fact sheets, bulletins, alerts, sample letters to legislators and editorial boards, op-eds) to enable advocates to effectively engage state policymakers and other stakeholders on the access issue. The Task Force requested that the Institute develop the following information to aid in the efforts of advocates:

  • Provide detailed information about prior authorization programs;
  • Provide detailed information about supplemental rebates;
  • Continue state alerts on budget and access issues;
  • Rewrite "Access to Effective Medications – A Critical Link to Mental Illness Recovery";
  • Collect and distribute legislative language for psychotropic medication carve-out; and
  • Act as a clearinghouse for timely sharing of testimony on access issues


The Task Force believes that to ensure that people with severe mental illness have open access to critically necessary medications, NAMI and other advocates should use the strategies and tools outlined in this report to the Board. Advocates must work with policymakers and through appropriate channels to ensure that limited public dollars are used in the most effective way to protect access to the most effective treatments for people with severe mental illnesses. The next few years will be the most challenging mental health advocates have ever faced. We will need a comprehensive and coordinated effort to prevent long term damage to vulnerable people and an already inadequate system of care.