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How a Cost-Saving Medicaid Policy Puts Mental Health Patients in Jail

A chilling finding from researchers correlates the incarceration rates of schizophrenics with healthcare policies.
Image: Nataliya Hora/Shutterstock

One of the most dehumanizing moments in a patient-bureaucracy relationship, at least within American-styled health insurance schemes, comes with two words: "prior authorization." One might experience such a moment with really any sort of healthcare provider requiring money, whether it's a radiologist, oncologist, or, most likely, a pharmacist: this treatment/drug requires the approval of your insurer.

Some forms get faxed around and, hopefully within a few days, a decision is made from somewhere up above: yes or no. If no, it's back to the treatment drawing board, but even if it's ultimately yes, the "prior auth" represents a significant barrier to treatment. In a statement against the rapid growth of required prior authorizations for life-saving cancer drugs a few years ago, the Association of Community Cancer Centers noted that not only is there potential for harmful and expensive delays, but the administrative burdens of prior auths add yet more costs to providing actual treatment.

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A new open-access study out in The American Journal of Managed Care, courtesy of researchers based at USC Schaeffer Center for Health Policy and Economics, approached the practice's growth from a rather different angle, in relation to schizophrenic patients. While denying or delaying a cancer treatment might result in the progression of the illness physically, denying schizophrenia treatment will have its effects behaviorally.

And getting sick in this sense, particularly in America, might mean jail rather than an emergency room or mental health clinic. With this in mind, the USC team decided to explore incarceration rates across different US states relative to the development of prior auth policies in those states' Medicaid programs. Are required prior authorizations for certain antipsychotic medications putting more schizophrenia sufferers in jail?

Horrifyingly, the answer seems to be that, yes, health plan cost-cutting in the form of prior auths may be resulting in increased levels of inmates with psychotic symptoms. States requiring authorization for the now-preferred atypical class of antipsychotics saw an average increase of 22 percent in the likelihood of imprisonment compared to states without such a requirement. Meanwhile, the same collection of states, while generally having a smaller share of mental illness, had higher rates of inmates with diagnosed schizophrenia.

Here's the downward spiral as outlined in the AJMC paper:

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Stage 1: A large majority of patients with schizophrenia are covered by Medicaid. Stage 2: The state’s restrictive prior authorization policy leads to discontinued, reduced, or inappropriate medication. Stage 3: Suboptimal medication leads to uncontrolled symptoms. Stage 4: Active symptoms or deteriorated economic conditions that result from uncontrolled symptoms lead to encounters with law enforcement and arrest. Stage 5: Repeated or serious arrests lead to imprisonment.

Beyond the obvious cruelty of throwing schizophrenics in jail because of those two words, the authors note that any cost-effectiveness that might be seen by a state Medicaid-administering agency instituting prior authorizations should be more than offset by the relatively astronomical costs of keeping mentally ill patients in jail. "The total annual cost in the United States associated with severe psychiatric disorders in jails and prisons is estimated by the Department of Justice … to be $8.5 billion," the paper notes. "Adding to this expense are court costs, attorney fees, police costs, and costs of other social and medical services, suggesting that the criminal justice system is a very expensive way to deal with mental illness."

The authors note that, in addition, the effects of medication withholding in schizophrenia patients, even for just a short while, are dramatic and immediate: a relapse comes in like a tornado. "The effects of losing continuous effective exposure to medication due to nonadherence are immediate and evident," they write. "A study on the temporal relationship between medication nonadherence and hospitalization risk for individuals with schizophrenia found that individuals in the first 10 days following a missed prescription refill had a greater than 50 percent increase in the risk of mental health hospitalization and a 77 percent increase in the risk of schizophrenia-specific hospitalization."

Finally, a classic 1984 study (cited in the current paper) found that the mentally ill have a "significantly greater chance of being arrested than non-mentally-disordered persons" for similar offenses. Data recorded for over 1,300 cop-patient interactions was analyzed for that report, resulting in the finding that, "the mentally ill are indeed being criminalized."

The new study further suggests that the very agencies tasked with helping patients with the most need, as those with schizophrenia often are, may instead be helping that criminalization process.