Background: Coverage restrictions for antipsychotics are associated with access problems in Medicaid but their impact in Medicare Part D is unknown. The relationship between antipsychotic adherence, hospitalization risk, and treatment costs among Part D enrollees with serious mental illness also has not been systematically examined. Evaluating the association between adherence and outcomes is complicated by a recent policy change requiring the redaction of substance abuse claims from the Medicare research files, as hospitalizations and spending for beneficiaries with serious mental illness-many of whom have comorbid substance abuse disorders-may be systematically underreported. Methods: Enrollment, formulary, utilization, and spending data were obtained from the CMS Chronic Conditions Warehouse for 2011-2012. Effects of coverage restrictions on antipsychotic utilization were assessed by exploiting a unique natural experiment in which low-income beneficiaries were randomly assigned to prescription drug plans with varying levels of formulary generosity. The scope of the substance abuse claims redaction was determined by comparing unredacted beneficiary-level expenditure data to expenditures calculated from the redacted claims. Antipsychotic adherence was measured by the proportion of days covered (PDC) and stratified into four categories: PDC<0.70; 0.70≤PDC<0.80; 0.80≤PDC<0.90; and PDC≥0.90. Probit regressions and two-part generalized linear models were used to examine relationships between adherence in year one and hospitalizations and expenditures, respectively, in year two. Results: Despite considerable variation in the use of coverage restrictions across Part D plans, there was no evidence that restrictions significantly altered utilization patterns or reduced overall utilization of antipsychotics. Nearly one in five Part D enrollees with serious mental illness had claims affected by the redaction and average Part A spending among those with redacted claims was underreported by 57%. Based on analysis of the unredacted data, adherence to antipsychotic therapy was associated with significantly lower probability of psychiatric hospitalization and lower hospital expenditures. Conclusions: Coverage restrictions do not limit access to antipsychotics among Part D enrollees. Benefits of sustained adherence to antipsychotics for beneficiaries with serious mental illness include lower probability of psychiatric hospitalization and lower hospital spending. Researchers should exercise caution when using redacted Medicare claims to analyze utilization and spending outcomes for this population.
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