An important HIV prevention study released on November 23, 2010 showed that when gay men without HIV infection take an antiretroviral medication every day, the pill (Truvada) was more than 90% effective at preventing contraction of HIV. According to the National Institutes of Health infectious disease chief, Anthony Fauci, M.D., this pre-exposure prophylaxis is an important finding for HIV/AIDS research and “has the potential to make a significant impact in the fight against HIV/AIDS.”
This is the best news in HIV/AIDS research since a major clinical study in Thailand demonstrated for the first time that an experimental vaccine could prevent HIV infection among some people. In October 2009, the study showed that the vaccine treatment group saw HIV infection rates reduced by more than 30% compared with those in the placebo group.
Not to dampen the spirit of this wonderful moment, but it is sobering to consider the financial impact what may someday become standard prevention practice for vulnerable populations. In an article published in the New York Times on November 23, 2010, “Daily Pill Greatly Lowers AIDS Risk, Study Finds,” Donald G. McNeil, Jr. writes that in the United States, Truvada “costs $12,000 to $14,000 a year.” However, the article acknowledges that insurance payers, such as Medicare, do not have established policies for paying for Truvada as a pre-exposure prophylaxis for vulnerable populations. What will be the immediate impact on payers?
As a specific example, Florida Medicaid pays risk-adjusted premiums to managed care companies that participate in the Medicaid Reform pilot counties. As of August 2010, the premium paid to health plans is for members diagnosed with HIV is $1,294.05 ($15,528.60) in the Jacksonville area and $1,899.30 ($22,791.60 annualized) in the Ft. Lauderdale area. Whereas the premium paid to managed care for a disabled male eligible for Medicaid is only $630.52 and $815.52 in the Jacksonville and Ft. Lauderdale areas, respectively.
What if Medicaid managed care companies encouraged doctors to prescribe Truvada as a pre-exposure prophylaxis to Medicaid eligible member that do not have an HIV diagnosis? Would the Medicaid managed care companies receive the increase payment?
According to the Medicaid rules, the answer is maybe. According to the Agency for Health Care Administration (AHCA), the identification of HIV-positive eligible payments in Medicaid Reform pilot areas are made through an algorithm based on specific diagnosis, procedure, and pharmaceutical codes. Developed by Julia Hidalgo, Ph.D., this algorithm examines claims data and if there are two or more Truvada claims in different months within the last 36 months, then the member is technically classified as HIV-positive. However, According to the Medicaid managed care reporting guide, AHCA reserves the right to audit the health plans for “documentation of completed lab testing as interpreted by a licensed physician” and “the health plan must provide the Agency with such enrollee‘s test results upon request.”
By reclassifying these members as HIV-payment eligible, Medicaid managed care would gain an additional annual revenue between $8,000 and $13,000 in Jacksonville and Ft. Lauderdale area, respectively. Assuming no other major medical claims, this could mean up to an additional $10,000 in annual net gain per member in Ft. Lauderdale for managed care plans (up to $3,500 in Jacksonville). AHCA could have an incentive to conduct these costly audits, as health plans may see opportunities for profit. It will be interesting to see if AHCA publishes their policy on pre-exposure prophylaxis for HIV.
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