Medicare to assemble extensive drug utilization database

June 1, 2005

Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS), plans to produce extensive information on how drugs and prescribing decisions affect health outcomes and costs by linking reimbursement data from Medicare prescription drug plans (PDPs) and Medicare Advantage (MA) plans with existing Medicare hospitalization and physician care databanks.

Dr. Mark McClellan, administrator of the Centers for Medicare and Medicaid Services (CMS), plans to produce extensive information on how drugs and prescribing decisions affect health outcomes and costs by linking reimbursement data from Medicare prescription drug plans (PDPs) and Medicare Advantage (MA) plans with existing Medicare hospitalization and physician care databanks. MA plans that provide outpatient drug coverage have experience assembling such data, but the much broader drug benefit will expand and formalize the process for collecting drug prescribing information beginning in January 2006.

In order to be reimbursed for drugs, PDPs and MA-PDPs have to submit electronically to CMS extensive information (36 data elements) for each prescription filled under Part D, including the particular drug form, dosage, quantity and refill schedule. "This will be the largest scale implementation ever of such electronic data on prescription drugs," Dr. McClellan predicted at a May meeting for pharmacy benefit managers (PBMs), noting that more than 40% of all prescriptions in the United States will be covered by Medicare, and the percentage will grow. The program thus will "provide insights about the association of drug use with overall outcomes and costs of care."

TRACKING SAFETY This initiative will enrich Food and Drug Administration programs for identifying drug safety problems. FDA contracts with MCOs for such data to supplement its adverse event reporting system, and Medicare already also provides FDA with safety information related to drugs covered by Medicare Part B. More extensive integrated outpatient drug use data will help determine much more quickly if certain drugs are associated with complications in particular patients and reduce FDA's reliance on spontaneous reporting of adverse events by healthcare providers. Health plans and prescribers, in turn, may use such information to target drugs to patients who don't have such side effects and may truly benefit.

ADDITIONAL DATA SOURCES CMS expects to expand its information resources even more by linking to electronic data on drug use, health outcomes and overall costs of care assembled by PBMs and health plans serving both Medicare and under-65 patients. While McClellan is not looking to actually pool all this data, he supports developing standards and frameworks for all segments of the U.S. healthcare system to collect health utilization and payment data in a "consistent" manner. This fits with government-wide efforts to establish a national health information system incorporating electronic medical records, electronic prescribing and health information technology that will allow all parts of the nation's healthcare system to communicate (see Newswire).

The overall aim is to use Part D data combined with other health information to determine whether certain medication management techniques or treatment approaches lead to best results and lower costs for certain types of patients. Dr. McClellan envisions studies by outside experts on which drugs keep patients with complex diseases out of hospitals and how certain treatments can reduce side effects.

Jill Wechsler, a veteran reporter, has been covering Capitol Hill since 1994.