Background: Prior approval programs have been used to control spiraling costs of Medicaid, but they are rarely formally assessed. We evaluated the effect of a change in Indiana Medicaid's policy (effective October 1, 1993) requiring prior approval to pay transportation costs.
Methods: We performed a historical cohort study comparing the health care utilization of Medicaid patients during the first 6 months of 1993 versus the first 6 months of 1994. Subjects included all Medicaid patients who visited any inpatient or outpatient site affiliated with an inner-city public hospital in the first 6 months of 1993 (N = 23,015) and 1994 (N = 23,707).
Results: These Medicaid patients made 82,961 visits in the first 6 months of 1993 and 79,809 visits in the first 6 months of 1994. Visits to hospital-based primary care clinics declined 16% (P < 0.001), which was partially offset by a 7% increase in visits to neighborhood health centers (P < or = 0.001). Emergency and urgent visits fell by 8%; visits for medication refills fell by 18% (P < 0.001 for each). Hospitalizations increased slightly in 1994, with no change in the number of inpatient days. There was no change in inpatient or outpatient nontransportation charges. There were no systematic reductions in selected aspects of preventive care. However, there were fewer emergency and urgent visits among patients with reactive airway disease.
Conclusions: Requiring prior approval for transportation was associated with reductions in visits for primary care visits and refilling prescriptions without measurable short-term effects on charges or selected clinical parameters. Neighborhood health centers partially ameliorated the decline in primary care visits.