2.5 OBRA '90, Medicare/Medicaid & DUR
Key Takeaways
- OBRA '90 requires states to operate a Medicaid prospective drug utilization review (DUR) program and requires pharmacists to offer counseling to Medicaid outpatients.
- Federal DUR elements include therapeutic duplication, drug-disease contraindications, interactions, incorrect dosage/duration, allergy, and clinical abuse/misuse.
- Pennsylvania is stricter: 49 Pa. Code § 27.18 requires the pharmacist to offer counseling on every new prescription to every patient, not only Medicaid recipients.
- Medicare Part D is the federal outpatient drug benefit for seniors and the disabled; Medicaid is the joint federal-state program for low-income individuals, with pharmacy covered as an optional benefit the state must provide to qualify for federal matching funds.
- Point-of-sale DUR runs at the pharmacy before dispensing; retrospective DUR analyzes patterns after the fact for prescriber education.
OBRA '90, Medicare/Medicaid, and Drug Utilization Review
The Omnibus Budget Reconciliation Act of 1990 (OBRA '90) reshaped community pharmacy by tying federal Medicaid funding to two pharmacy-specific mandates: a prospective drug utilization review (DUR) program and an offer to counsel Medicaid outpatients. Before OBRA '90, counseling was optional in most states; after it, counseling became a federal condition of Medicaid participation. On the PA MPJE, expect questions on the DUR elements, the counseling-offer rule, and how Pennsylvania's stricter standard layers on top.
OBRA '90 Statutory Requirements
OBRA '90 added Section 1927(g) to the Social Security Act. It requires states to operate a Medicaid DUR program with two components:
- Prospective DUR — review of each Medicaid prescription before dispensing to screen for problems.
- Retrospective DUR — ongoing review of dispensing data to identify patterns and educate prescribers and pharmacists.
The statute also requires pharmacists to offer to counsel each Medicaid outpatient about the drug, its use, and how to take it. The offer may be made by the pharmacist or a pharmacist's designee and may be made in person or by phone. The patient may decline; counseling is not required if the offer is refused, but the offer itself is mandatory.
The Seven DUR Elements
The federal regulation at 42 CFR § 456.716 enumerates the screening criteria that prospective DUR must address. A pharmacist must assess the prescription for the following before dispensing:
| DUR Element | What the Pharmacist Evaluates | Example |
|---|---|---|
| Therapeutic duplication | Two or more drugs from the same therapeutic class used concurrently | Patient on both omeprazole and pantoprazole without indication |
| Drug-disease contraindications | Drug worsens a documented condition | NSAID in a patient with documented CKD |
| Drug-drug interactions | Clinically significant interactions | Warfarin + fluconazole increases INR risk |
| Incorrect dosage or duration | Dose outside safe range or duration inappropriate | Amoxicillin 500 mg once daily instead of TID for strep |
| Drug-allergy interactions | Allergy to the drug or class | Penicillin prescription for a patient with documented anaphylaxis |
| Clinical abuse/misuse | Inappropriate use, early refills, dose stacking | Multiple early refills of a Schedule II stimulant |
| Drug-food interactions (some state programs) | Food significantly alters drug effect | Warfarin + high-vitamin-K diet counseling |
The pharmacist must use professional judgment to resolve any flagged issue—often by contacting the prescriber, adjusting therapy, or counseling the patient.
Pennsylvania's Stricter Counseling Rule
OBRA '90's federal counseling rule applies only to Medicaid outpatients. Pennsylvania goes further. Under 49 Pa. Code § 27.18, the pharmacist (or a pharmacist-intern under supervision) must offer to counsel on every new prescription dispensed to every patient, regardless of payer. The offer must cover the drug's name, description, dosage form, route, directions, common side effects, contraindications, and what to do if a dose is missed. The patient may decline, but the offer is mandatory and must be documented if declined.
[!IMPORTANT] Federal OBRA '90 counseling applies only to Medicaid patients; Pennsylvania extends the offer to all patients. If a question asks whether the pharmacist must offer counseling on a Medicare Part D prescription, the answer is yes under PA law even though OBRA '90 would not require it.
For refills, the pharmacist must assess whether the patient needs additional counseling and offer it if circumstances indicate—new directions, long lapse, new interaction potential. Counseling is the practice of pharmacy and may not be delegated to a pharmacy technician.
Medicaid vs. Medicare Part D
Pharmacists must distinguish these federal programs:
| Program | Governing Law | Population | Pharmacy Benefit |
|---|---|---|---|
| Medicaid | Title XIX of the Social Security Act; PA Medical Assistance (62 P.S.) | Low-income individuals of any age, pregnant women, SSI recipients, some working disabled | Outpatient drugs are an optional benefit PA covers; OBRA '90 DUR + counseling apply |
| Medicare Part D | Title XVIII; Medicare Modernization Act of 2003 (MMA) | Seniors 65+, disabled, ESRD; voluntary enrollment with premiums | Outpatient drugs through private Part D plans (PDPs or MA-PDs); no OBRA '90 DUR mandate, but plans run their own DUR at point of sale |
Dual-eligible individuals (enrolled in both Medicare and Medicaid) receive their outpatient drugs through Medicare Part D, not Medicaid. Medicaid may cover cost-sharing and uncovered categories. From the pharmacist's standpoint, dual-eligible claims are processed under the Part D plan's rules and formulary.
Point-of-Sale DUR in Practice
Modern pharmacy management systems perform point-of-sale (POS) DUR automatically when a claim is adjudicated. The system alerts the pharmacist to drug interactions, duplicate therapy, allergy conflicts, and dose/age concerns based on the patient's profile. The pharmacist's job is to evaluate the alert, determine whether it is clinically significant, and document the intervention:
- Override with reason if the alert is not clinically relevant (e.g., cross-allergy alert on a drug the patient has tolerated previously).
- Contact the prescriber if the alert requires a therapy change.
- Counsel the patient on the relevant issue and document the offer.
POS DUR does not replace the pharmacist's professional judgment; it augments it. Ignoring an alert without review is a deviation from the standard of care and a basis for Board discipline.
Retrospective DUR and Prescriber Education
The state Medicaid agency (in PA, the Department of Human Services) conducts retrospective DUR by analyzing paid claims for patterns such as polypharmacy, opioid/benzodiazepine combinations, excessive refills, and off-label use. Findings are used to:
- Send educational letters to prescribers and pharmacists.
- Recommend changes to therapy.
- Identify fraud, waste, and abuse for referral to investigators.
Retrospective DUR is non-punitive at the federal level; it is designed for prescriber education, not sanction. Patterns suggesting diversion or fraud are referred separately.
OBRA, DUR, and PDMP Interaction
Pennsylvania's ABC-MAP PDMP (see Chapter 4) supplements DUR by giving the pharmacist controlled-substance history at the point of dispensing. While OBRA DUR is a clinical screen, the PDMP is a diversion screen. A pharmacist who detects duplicate opioid prescribing across providers via the PDMP has both the authority and the duty to decline to fill, query the prescriber, and document the intervention. The opioid/benzodiazepine combination is specifically tested because PA requires a PDMP query each time an opioid or benzodiazepine is dispensed.
Exam Traps and Scenarios
- OBRA '90 does NOT require counseling for non-Medicaid patients under federal law alone — PA's stricter rule is what requires the offer for all patients. Distinguish the federal mandate from the state mandate.
- The counseling offer may be declined — but the offer is mandatory; document the refusal.
- A technician cannot counsel — only a pharmacist or pharmacist-intern under supervision. A technician may deliver the printed patient education leaflet, but not the pharmacist's verbal offer.
- POS DUR alert on a documented allergy — the pharmacist must review the alert and either resolve or override with a documented reason; silent disregard is a violation.
- Long-term care and inpatient settings — OBRA '90 counseling rules apply to Medicaid outpatient prescriptions; institutionalized patients have different requirements but PA counseling standards still apply to outpatient fills.
Under OBRA '90, which group of patients must a Medicaid-participating pharmacy offer to counsel before dispensing a new prescription?
A pharmacist receives a Medicaid prescription for a patient whose profile shows an active warfarin prescription, and the new prescription is for fluconazole. Which DUR element is most directly triggered?
Which statement about Medicare Part D and Medicaid outpatient pharmacy benefits is correct?