The Impact of the VA Medication Copayment Increase on Medicare and VA Outpatient Utilization

Smith BM, Stroupe KT, Tarlov E, Lee TA, Huo Z. The Impact of the VA Medication Copayment Increase on Medicare and VA Outpatient Utilization. Poster session presented at: VA HSR&D National Meeting; 2008 Feb 14; Baltimore, MD.

Related HSR&D Project(s)

• ECI 02-220 – Effect of Increased Co-payments on Pharmacy Use in the VA

Objectives: On February 2002, the medication copayment for VA pharmacies increased from $2 to $7 per 30-day supply. Based on characteristics such as level of disability, service connection status, and income veterans pay copayments for some, all, or none of their medications obtained from VA. These changes resulted in decrease in medication acquisition, but the impact on outpatient utilization is unknown. The objective of this study was to examine the association between level of copayment changes in VA and Medicare primary (e.g., general internal medicine) and specialty (e.g., cardiology, nephrology) outpatient utilization in the year following the copayment increase. Methods: We collected both VA and Medicare utilization data for 69,440 male veterans over age 65 for the years before and after the VA medication copayment increase. The study design was a retrospective observational study. Multivariable zero-inflated negative binomial regression models were used to examine the association between level of copayment for VA medications and the number of VA and Medicare primary and specialty outpatient visits. Results: Overall, the mean number of visits to VA in the year following the copayment increase decreased for primary (.15 visits) and specialty care (.23 visits). During that same time, the mean number of visits by veterans to Medicare providers increased for both types of visits (.52 primary visits, 1.3 specialty visits). Veterans with copayments for some medications had a bigger increase in Medicare specialty visits in the year after the copayment increase (IRR = 1.07, CI: 1.01 - 1.13, p = 0.029) than veterans who did not have copayments; the result for veterans with copayments for all medications was almost identical. There were no statistically significant (p < 0.01) associations between copayment levels and the number of Medicare primary visits, VA primary visits, or VA specialty visits. Implications: After the copayment increase, veterans who had copayments for some or all of their medications had a larger increase in Medicare specialty visits than veterans who had no medication copayments. Impacts: Medication copayments affect both the amount of medications received and patterns of utilization of outpatient services. These results highlight the importance of considering both direct and indirect consequences of a policy change.