Administrative Burden and Treatment Continuation: Evidence from Continuous Glucose Monitoring in Medicaid

• In Event: Administrative Burdens in Healthcare: Evidence for Multiple Disciplines

Abstract

Introduction/Background: Society cares about targeting benefits to those who most need them to avoid wasteful spending, and administrative burdens are an often-used tool aimed at improving targeting efficiency. One such administrative burden in healthcare is the use of prior authorization. Prior authorization means that before patients can be authorized to use a certain treatment or receive a specific type of care, a medical provider must provide documentation to the insurance company that convinces the insurance company that the treatment or medical care is medically necessary. Prior authorizations expire, even for treatments for chronic health conditions in which there is no cure, and thus even treatment that has passed prior authorization will require additional paperwork for continued use. Thus, reauthorization requirements are an additional administrative cost for providers and patients.

Purpose/Research Question: We quantify the impact of changes in the reauthorization window for continuous glucose monitoring systems (CGMs) on whether West Virginia Medicaid beneficiaries with a Type 1 Diabetes (T1D) diagnosis continue their CGM treatment and are hospitalized. West Virginia Medicaid shortened its CGM reauthorization interval multiple times: the interval decreased from one year to six months in the fourth quarter of 2021 and then to three months in the second quarter of 2022. These sequential policy changes generate quasi experimental variation in administrative rules that should be uncorrelated with underlying health.

Data: Using administrative claims data from 2017 through 2022, we construct a panel of adult Medicaid beneficiaries with T1D who received a CGM product and follow them up to one year following the first CGM receipt. 

Research Design and Methods: We estimate a dynamic event time model comparing continuation trajectories and hospitalizations across reauthorization regimes within the first year following the first CGM receipt.

Results/Findings: The results indicate that shortening the reauthorization interval reduces sustained CGM use. Under the six month policy, continuation declines more sharply beginning in the second and third quarters after receipt. The reductions are substantially larger under the three month regime. The timing of these declines closely matches the renewal thresholds, suggesting that increased administrative reauthorization frequency contributes to reduced use over time. These findings are consistent across numerous robustness checks including alternative T1D classification algorithms, alternative specifications, and a placebo test assigning a fictitious reform prior to the policy change. We also find increasing the renewal frequency increases hospitalizations.

Conclusions/Implications: These findings highlight how cost containment policies can generate unintended consequences by restricting access to cost-effective medical care.

Authors

• Amanda P Gaulke, Kansas State University
  Presenting Author

• Daniel Grossman, West Virginia University
  Non-Presenting Co-Author

• Caroline Welter, West Virginia University
  Non-Presenting Co-Author