Medi-Cal Restricts Payments for Antipsychotic Drugs in Nursing Homes

by Michael Connors, CANHR Advocate

On October 1, 2011, Medi-Cal implemented a little-publicized new policy requiring skilled nursing facilities to jump through new hoops before Medi-Cal will pay for the use of antipsychotic drugs prescribed for residents.

The policy establishes what Medi-Cal calls a “Code I Restriction” for antipsychotic drugs prescribed in skilled nursing facilities. It states that “for all (Medi-Cal) beneficiaries residing within a Skilled Nursing Facility, any antipsychotic medication must now be prescribed for a FDA-approved indication.”

This is a promising development because the FDA has not approved the use of antipsychotics as a treatment for dementia or dementia-related psychosis. Just the opposite is true. The FDA’s June 16, 2008 Alert on this subject states: “Antipsychotics are not indicated for the treatment of dementia-related psychosis.”

Although this would seem to rule out Medi-Cal payment for antipsychotics prescribed for nursing home residents with dementia (except those dually diagnosed with schizophrenia or bipolar), we don’t know what Medi-Cal considers a “FDA-approved indication” or how strictly this policy is being implemented.

Although we’ve often pointed out that Medicare, not Medi-Cal, pays for the vast majority of antipsychotic drugs used in nursing homes, the recent DPH investigations of nursing homes found major misuse of antipsychotics that were paid for by Medi-Cal. The Medi-Cal policy is certainly a step in the right direction and well-worth monitoring.

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