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1994 Angarola RT, Joranson DE. Healthcare Reimbursement
Policies: Do they block acute and cancer pain management?. APS Bulletin 1994
4(5):7-9.
Department editors' note: This article summarizes a recent report (Joranson, 1994) on reimbursement barriers
that people encounter in obtaining acute and cancer pain management. A few studies have dealt with such
reimbursement impediments, further discussion, research, and action to address reimbursement impediments are
urgently needed.
Healthcare
Reimbursement Policies: Do They Block
Acute and Cancer Pain
Management?
Robert T. Angarola, Esq.; David E. Joranson, MSSW
Most people at some time will require pain management services due to the prevalence of cancer and other
conditions that cause pain. Access to professional services, prescription drugs, and medical equipment is critical in
obtaining adequate pain management. In the United States, healthcare insurance coverage and the ability to pay for
services determine who has access to these products and services.
Problems of coverage
U.S. citizens fall into four categories of insurance coverage: (a) uninsured, (b) underinsured, (c) uninsurable, and
(d) insured.
The uninsured, with little ability to pay, have limited access to health services. An estimated 31
million to 37 million people in the United States under age 65 are "medically indigent." This group, which includes
the poor who are not eligible for Medicaid, has a disproportionately high share of minorities (Earnest, 1990).
According to the American Cancer Society (1989), people with low incomes experience greater pain and suffering
from cancer than other Americans.
The underinsured are those with incomes insufficient to cover the costs of insurance, deductibles,
and services that are not covered by their policies. This group may be as large as 80 million people (Earnest, 1990).
The uninsurable are those in need of expensive care for chronic diseases but who are prevented from
buying insurance. Minorities are also disproportionately represented among both the underinsured and the uninsurable
(Earnest, 1990).
Coverage for these groups has become the focus of healthcare reform; however, healthcare reform seeks to address
other problems as well. The insured would seem to be well off in the present system, yet even those with
insurance coverage find it is often inadequate. For example, management of acute and cancer pain requires drug
therapy. While the governments of most industrialized nations cover most prescription drug costs, the U.S. government covers only about 12% of these costs. Though most Americans have some health insurance, coverage for
ambulatory care and prescription drugs is often limited (Weiner, Lyles, Steinwachs, & Hall, 1991).
For older Americans, especially, coverage seems inadequate. They often live on fixed incomes, and therefore,
adequate medical coverage is a major factor in their ability to obtain pain relief. Most elderly Americans pay for their
own prescription drugs (Special Committee on Aging, U.S. Senate, 1992). The American Association for Retired
Persons (AARP) has reported that those over 65 spend more on such drugs than those between the ages of 45 and 64
(AARP, 1992). Moreover, the rate of increase of prescription drug prices has exceeded the growth in buying power
of the elderly (Special Committee et al., 1992).
Pain management reimbursement issues
Medicare: Generally, Medicare does not cover outpatient prescription drugs. There are
proposals to include coverage for prescription drugs in national healthcare reform legislation, including Medicare.
Currently, Medicare covers only drugs administered incidentally to a physician's service, and often the elderly have
to absorb the cost of medications for outpatient pain management.
If, however, those patients are admitted to an inpatient facility, such costs are covered. This can result in the
admission of elderly cancer patients to the hospital for reimbursement reasons rather than medical reasons. According
to Ferrell (1993), "a patient may well have reimbursement for the $4,000 cost of PCA morphine but will have no
coverage for $100 of oral morphine solution" (p. 21). The need for prescription coverage is a major reason most
Medicare recipients purchase the supplemental insurance known as Medigap or Medicare Supplemental (AARP,
1992).
Hospice care: Hospices provide palliative care and pain management for people who are dying.
Data have shown that quality of care was better for hospice patients than those receiving conventional care (Rhymes,
1990).
Due to the relatively few hospices obtaining Medicare certification, Medicare limitations, hospice restrictions on
admissions, and ignorance about hospices, fewer people have used hospices than had been anticipated (Rhymes, 1990).
By law, hospices must provide quality palliative and pain care even if the cost exceeds per diem reimbursement.
Rising analgesic medication costs may affect hospice budgets, limit some services, and lead to further screening of
admissions (Health Care Financing Administration, 1990). Hospices that are not able to avail themselves of hospital
pricing advantages have begun to explore group purchasing possibilities (Beresford, 1992).
Medicaid: Medicaid is funded by both the federal government and the states. It is the primary
public insurance program for low-income families and for people who are blind, disabled, or members of families with
dependent children. The Medicaid drug rebate law in the 1990 Omnibus Budget Reconciliation Act sought to provide
respite for the pharmacy profession, which had borne the brunt of drug cost-containment programs (Martin, 1991).
The law also sought to improve access to drugs by providing state programs with rebates (Martin, 1991). While most
states cover various analgesic medications, some have developed expanded drug coverage for the elderly (Martin,
1991).
However, approximately one-fourth of state Medicaid programs place restrictions on medications (Soumerai, Ross-
Degnan, Avorn, McLaughlin, & Choodnovsky, 1991). Soumerai, Avorn, Ross-Degnan, and Gortmaker (1987) and
Holcombe and Griffin (1991) reviewed studies showing the negative effect of reimbursement policies on clinical
outcomes and costs. Soumerai and colleagues (1991) observed that state caps on the number of prescriptions reduced
the use of analgesics by disabled patients with chronic illness. Such restrictions raise the risk that medication will
become unaffordable. Restrictions on prescription drugs also raise the risk of elderly patients' going to nursing homes.
Private insurers: The 1990s have produced cost-containment measures and strong competition
among private insurers. The exact degree to which all private health insurance carriers reimburse prescription drugs
is unknown, though it is clear that policies vary considerably. Some states allow the sale of bare-bones policies that
generally focus on catastrophic coverage rather than prescription drugs. A number of health insurers' policies offer
minimal coverage for outpatient prescription drugs, including analgesics.
Health maintenance organizations: Although an estimated 80% to 95% of those in HMOs have
comprehensive pharmaceutical insurance, HMOs maintain controls on prescribing and dispensing (Anderson & Dunn,
1991). Under HMO coverage, outpatient prescription drug benefits may be available with either copayments in a standard plan or through riders, which are extensions of a standard plan (Anderson & Dunn, 1991). Both may exclude
certain medications or restrict quantities.
Anderson and Dunn (1991) reviewed the disclosure practices of HMOs in marketing and found that restrictive
prescription drug benefits are common but are not fully explained in promotional materials. Further, there is little
incentive to describe such benefits due to the lack of laws requiring disclosure.
Federal fee schedules and guidelines: The Agency for Health Care Policy and Research (AHCPR)
guideline on acute pain management (1992) recommended that surgeons and other physicians give more attention to
pain assessment and management. However, the current Medicare fee schedule may not recognize the increased
physician time necessary to accomplish these functions. Blumenthal and Epstein (1992) observed that the current
regulations express a concern that pain consultations occur too often. Edwards (1990) reported that medical
institutions with pain-consultation services often have their payment claims for postoperative pain-management
consultations rejected as "uncovered services."
Other pain management issues
Restrictions on prescription quantity: Several states restrict the number of dosage units of
controlled substances that can be dispensed to as little as 100 units (Joranson, 1990). Clearly, such restrictions can
negatively affect pain management. In 1991, the Wisconsin Cancer Pain Initiative worked with state regulatory boards
to successfully eliminate that state's 120 dosage unit restriction.
Some insurance policies require the use of mail-order pharmacies, which have guidelines that restrict the number
of dosage units they will dispense, regardless of what the physician prescribes. An Indiana physician has reported that
patients often ration pain medication because uncertain delivery dates may result in their experiencing pain until the
package containing medication arrives (Joranson, 1990). The DEA has commended efforts to implement these
guidelines (American Managed Care Pharmacy Association, undated).
Pharmacy issues: Many pharmacies carry the costs of dispensing prescriptions themselves until
they are reimbursed. In Illinois, it was reported that the lag in Medicaid reimbursement exceeded 100 days (Reutzel,
1991). Some pharmacies are facing the prospect of going out of business for lack of cash flow, potentially impeding
patient access to such products and services (Illinois Pharmacists Association, 1991).
Often, pharmacists must buy controlled substance prescription drugs at little or no discount, despite their additional
costs involving security and record keeping (Kreling, 1991). Such unreimbursed pharmacy costs may then shift to
those patients who pay cash.
Behavioral medicine: Although the value of behavioral pain control techniques has been
demonstrated, uninsured and underinsured patients generally have limited access to these treatments. Insurance may
cover only selected techniques, but these will vary according to the insurance policy and whether the service is
provided on an outpatient or inpatient basis.
Programs to compensate for poor coverage
The Pharmaceutical Manufacturers Association has compiled a listing of 59 programs that attempt to compensate
for lack of outpatient prescription drug coverage for indigent patients ("Indigent patient program," 1992). Some drug
companies make their products available without charge on a case-by-case basis, though the complete extent of
participation by opioid analgesic manufacturers is unknown ("Indigent patient program," 1992). The American Cancer
Society (1992) also acts as a referral source for indigent cancer patients.
Conclusion
Failure to relieve pain in one-half or more of postoperative and cancer patients is gaining recognition as a national
healthcare problem (AHCPR et al., 1992; 1994). The complex factors accounting for the undertreatment of pain
inevitably point to the low priority that has been given to pain management in the United States. Evidence suggests
that uneven coverage and reimbursement policies are significant barriers to the relief of acute and cancer pain.
The current patchwork approach to funding is finally receiving needed attention, but will healthcare reform efforts
address the tragic and disparate undertreatment of pain in the United States? Some reform proposals have been moving in the right direction; however, pain management is not receiving enough attention. It is time to institutionalize
cost-effective pain management in U.S. healthcare policy.
Acknowledgment
The authors gratefully acknowledge the assistance of Kent Showalter in preparing this review.
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