Increased olanzapine discontinuation and health care resource utilization following a Medicaid policy change.

Objective: To assess the short-term impact of Florida Medicaid's policy change on olanzapine discontinuation and health care resource utilization among olanzapine-treated patients with schizophrenia or bipolar diagnoses. The announced policy change, effective on July 11, 2005, but rescinded on September 9, 2005, reclassified olanzapine as nonpreferred and gave physicians 60 days to change antipsychotics for current users.

Method: Prescription patterns, health care resource utilization, and Medicaid payments were compared between patients using olanzapine on July 11, 2005, and matched prior-year controls. For reference, parallel analyses were conducted in New Jersey Medicaid, where access to olanzapine remained constant. The effect of Florida's policy change was also estimated among policy-sensitive olanzapine users by treating year (2004 vs 2005) as an instrumental variable.

Results: Matched Florida cohorts (N = 4,255) showed increases from 2004 to 2005 in 6-month rates of switching from olanzapine (+326%), hospitalization (+19.8%), and emergency room visits (+19.7%) (all P values < .001). Concurrently in the matched New Jersey cohorts (N = 2,680), there were no significant changes in these outcomes from 2004 to 2005. Among matched Florida policy-sensitive olanzapine users, an additional 9.3% experienced hospitalization in 2005 versus 2004 (P < .001), and increased payments for medical services and other antipsychotics largely offset decreased payments for olanzapine.

Conclusions: The announced reclassification of olanzapine to nonpreferred status substantially disrupted the continuity of olanzapine therapy for many Florida Medicaid recipients diagnosed with schizophrenia or bipolar disorder and was associated with increased hospitalization and emergency room visits. During the 6 months following the policy change, increased payments for medical services largely offset reduced payments for olanzapine.