Release: New Report Questions the State’s Medicaid Savings Claims


Controversial “Prescriber Prevails” Measure Would Provide Only a Fraction of the Estimated Savings

ALBANY, N.Y. – A new report conducted by Cornell University shows that savings resulting from a controversial change in Medicaid policy are far less than projected by state officials.

The report, Estimating the Financial Impact of the “Prescriber Prevails” Rule to the New York State Medicaid Program,” was authored by Cornell Professor Sean Nicholson.

Nicholson, a widely published economist and leading health policy analyst, estimates the state will save $702,000 by removing prescriber prevails for mental health patients in Medicaid Managed Care (MMC). This figure is a fraction of the more than $12 million in savings claimed by the Cuomo administration in defending its policy of allowing health plan managers, instead of doctors, to make final prescribing decisions for patients.

The administration’s proposal has been sharply criticized by doctors, mental health experts and patient advocates.

“Interfering with the doctor-patient relationship is never good health policy. The only possible rationale for it is that it could provide major savings, but this report – by an impartial and highly-regarded authority – shows that the savings are minimal at best,” said Jaime Venditti, State Coordinator of New York Health Works, a coalition of patient advocacy groups. “Why the state would take the risk of destabilizing thousands of patients for this level of savings is unfathomable.”

“Patients seem to be at the bottom of the priority list.  The state’s Medicaid program comes up with many reasons why managed care companies should have more authority over doctors with medications, but none of the reasons pass the smell test,” said Paul Gileno, President and Founder of the U.S. Pain Foundation.  “The administration claims that prescriber prevails has an extremely high cost.  At the same time, NYS Medicaid claims the program is barely ever used.  What is the truth?”

Interestingly, the Nicholson report supports the state’s estimates for eliminating prescriber prevails for all drug classes in Medicaid fee for service (FFS), but found that in the atypical antipsychotic drug category, the state’s claims were miscalculated.

The report also looks at the cost savings for eliminating prescriber prevails for all other drug classes in MMC, which is the current policy, and found that the state only saves $2.28 million.


“Dr. Nicholson has conducted an objective academic study and the truth is that NYS Medicaid’s numbers do not add up,” adds Gileno. “The cost of prescriber prevails is much lower than they claim.  Meanwhile, the cost of not having the program available for patients is dangerous to their health.  New York needs to implement prescriber prevails for all patients and move them up the priority list.”

Nicholson’s financial estimates differ with the state on three main points. First, the state’s estimate implies that 20% of all antipsychotic prescriptions will occur because of prescriber prevails. The author finds no basis for this since in all other drug classes, just 0.43% of prescriptions occur due to prescriber prevails. Second, the state claims that without its proposed policy change, it would lose negotiating power with the drug industry.  Nicholson finds no evidence for this. And third, the state claims that its ability to get rebates from drug manufacturers was waning. Nicholson disputes this, as well, because the mandated rebates are the same for drugs used in FFS and MMC.

Nicholson concludes that restoring prescriber prevails for all drug classes in New York’s Medicaid program is easily affordable. Full restoration of prescriber prevails for all drug classes in MMC and FFS will cost only a third of the state’s estimate for a limited program.

Sean Nicholson, Ph.D is a professor in the Department of Policy Analysis and Management at CornellUniversity.

View the full report here: