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BELOW WE'VE LISTED a few choice bits from the California Health and Safety Code that you can quote when writing letters of complaint to insurers about drug prescription barriers.
- As long as these conditions have been met, plans can’t limit or deny coverage for a drug because a doctor plans to use it for an off-label indication: the drug is FDA-approved for another indication; the drug is being prescribed by a contracting physician for treating a life-threatening condition or a chronic and seriously debilitating condition; the drug is recognized as treatment for this indication by the American Medical Association Drug Evaluations, the American Hospital Formulary Service Drug Information, the U.S. Pharmacopoeia Dispensing Information, or two articles in a major peer-reviewed journal showing data on the off-label use as safe and effective. See Health and Safety Code section 1367.21.
- Plans must have an expeditious process for physicians to get non-formulary, medically necessary drugs authorized, except as otherwise provided by law or where the state Department of Managed Health Care has approved an exclusion of the drug from the benefit plan. See Health and Safety Code sections 1363 and 1367.24.
- Plans cannot limit or exclude coverage for a drug meeting four conditions: The drug was previously covered; the contracted physician continues to prescribe the drug; the prescription is for an FDA-approved use; and the drug is considered safe and effective for treating the enrollee. Generic substitutions are allowed. See Health and Safety Code section 1367.22.
- Each plan must provide to physicians a written description of their expedited process for authorization of non-formulary drugs, as well as timelines. See Health and Safety Code sections 1363 and 1367.24.
- Plans that will not authorize or pay for a drug that is more appropriate than a formulary medication may be exposed to malpractice liability. Physicians encountering this situation should appeal the coverage decision in writing and involve a plan official familiar with medical issues. See CMA On-Call document 104.
Yet, that was just the line that Anthem Blue Cross used in a letter to patients encouraging them to ask their doctors to prescribe higher-strength tablets that they would then cut in half to reach their prescribed daily dose—and thus save “up to $360 per year on out-of-pocket costs.” Well, unless, as the footnote says “Personal savings may vary.”
In little and big ways, health insurers, pharmacy benefit managers and health maintenance organizations use their “power of the purse” to interfere in the doctor-patient relationship. It can take any number of forms: there is the practice of substitution, in which a health plan stops covering a patient’s current medication in favor of others, whether generic or therapeutic; there are ever-changing formularies and fail-first policies, where a patient must take one or more drugs that don’t help before insurance will pay for higher-end therapy; there are prior authorization requirements, under which doctors must first get an insurer’s permission before it will cover a particular drug for a patient; there are attempts to incent physicians financially; and there are attempts to get the patient to ask their doctor for certain drugs beneficial to the insurers’ bottom line.
Certainly, this list is incomplete, but it does comprise the main issues that physicians battle with every day on behalf of their patients. In addition, the individual actions are less important than their common thread—these measures get in the way of important therapy for some patients. While insurers and HMOs point out that as the ultimate payers, they have a stake in the cost of treatments, and a responsibility to seek costeffective care for their patients, it’s clear that they sometimes go too far. How often they overstep the line is a matter of debate, and it’s not something that’s easy to define with statistics. But it’s becoming more and more clear that red tape and the insurers’ drive to be ever-more profitable is hurting more and more patients, especially the most vulnerable patients—those with serious illnesses and low-income Medi-Cal beneficiaries.
By the Numbers
IT'S A DAUNTING TASK to figure out how much health plans interfere with drug prescribing, but doctors treating diseases
such as multiple sclerosis can provide a glimpse into what’s
going on throughout the system. Drug insurers structure their
coverage to provide cost-effective treatment for broadest crosssection
of patients, but it’s when a patient deviates from the
average that drug insurers most often seem to interfere. Formularies
requiring patients to try cheap drug X before expensive
drug Y don’t take into account individual drug responses, comorbidities,
or rare or difficult-to-treat diseases, such as MS.
The glimpse MS provides is bracing. Nearly two-thirds of neurologists and MS specialists reported that insurance barriers interfere with their ability to diagnose and treat MS patients, according to a 2007 study by the National Multiple Sclerosis Society and the drug company Teva Neuroscience. About 70 percent of these doctors said insurers try to restrict the use of infused disease-modifying drugs at least some of the time, with only 10 percent saying it never happens. Compare that to what happens with less expensive infused corticosteroids: 24 percent of the doctors said insurers sometimes interfere, and 37 percent said they never do.
Among MS patients taking an immunomodulatory drug, 22 percent said they’d had trouble with insurance plan reimbursement. Of patients reporting such difficulties, more than one-third reported high co-payments or deductibles, nearly onequarter said prior authorization had been a problem, while 8 percent said they’d been denied drug coverage. Thirty percent of patients reported one of several other difficulties.
Nick LaRocca, vice president of MS Society healthcare delivery and policy, states the problems bluntly: “Are there excesses on the part of insurers? Are there arbitrary decisions? Are there decisions that are being made by people who don’t have medical training? Are there instances where the choice of a preferred drug is contingent more on economic considerations than scientific considerations? Yes to all of those.”
He has a more nuanced explanation of why these things happen. “Depending on who you are, you’re going to look at this a bit differently—from the standpoint of insurance companies, these MS drugs are expensive,” he points out. In fact, medications of all kinds are getting more expensive to research and develop, a trend driven partly by a move toward biologics, such as lab-grown protein therapeutics. Drugs for MS and other immunologic disorders are among the phenomenon’s leaders. At the same time, the predominance of employer-based insurance gives serious heft to employers’ pressure for cheaper rates. “The insurers are worried about this, and this is the reason why they throwing up all these barriers, and there are more barriers to come,” such as an initial moratorium on new drugs of perhaps six months, he says.
The Dangers of Substitution
THE SIMPLE FACT is that sometimes formularies and other
insurer barriers to specific medications do harm patient care.
James Roach, MD, practices urology in Imperial County, and
for this 78-year-old, being second-guessed by insurers is nothing
new, except that those questions now often come from
companies administering Medicare’s drug coverage program,
Part D. “If I want to give a patient testosterone, I get the same
answer every time—‘Erectile Dysfunction is not covered’,” he
explains while rustling through his desk. “I have to write a long
letter telling them the reason you give testosterone to an older
man, if he has a low level, is
that it’s good for his mental
health.” In fact, he says three
or four of his patients no longer
use county mental health
services as a result of the treatment.
In addition to depression,
low levels of the hormone
cause weak muscles and can
lead to osteoporosis and prostate
cancer, he continues.
Probably the biggest area of concern for physicians and patients, however, is drug substitution, either generic and therapeutic. Generic substitutions— at least until recently— have been generally considered less harmful than therapeutic since the U.S. Food and Drug Administration requires that a generic drug have the same amount of the active ingredient as the name brand drug. Yet, the FDA allows a generic drug to differ from a brand-name drug by up to 20 percent of its composition; these differences can include the way the drug is released into a patient’s system or the addition of flavors and preservatives. Sometimes these differences can affect how a patient reacts to the drug.
One study on “Effects of Generic-Only Drug Coverage in a Medicare HMO” by J. Christian-Herman, M. Emons, and D. George, found that requiring patients to take generic drugs has been associated with, among other things, increased overall hospital admissions and a negative impact for quality metrics for certain conditions. Another 2007 study published in the British Journal of Cardiology reported that patients who switched from Lipitor to the generic simvastatin showed a 30-percent increase in risk for major cardiac events or deaths from all causes among patients who switched from Lipitor to the generic simvastatin. Fortunately, in California, pharmacies can generally only switch a patient to a generic drug if the physician has not indicated that the prescription be filled as written. Even then, the patient must be informed that the switch is being made according to the state’s Health & Safety Code Section 1348.6.
Therapeutic substitutions—in which less expensive drugs that are not chemically equivalent are suddenly covered instead of current therapies—are definitely cause for alarm. Dr. Roach, the Imperial County urologist, consistently finds that prescribing the prostate-shrinking drug Avodart causes therapeutic substitution problems with insurers. “There are all kinds of studies< on the tremendous savings in money, mortality and morbidity by not having to do prostate operations,” but some companies will suddenly stop covering the drug, he says. Others will switch their coverage to Finasteride, a drug from the 1950s, which he calls “similar, but not as good.” Instead of Flomax or Uroxatral, insurer formularies favor cheaper drugs Hytrin or Cardura, which were originally high blood pressure drugs. That’s a big problem if your patients are elderly. “Very often you’ll put men on these and they’ll get very dizzy and fall down—I know of a case where a man fractured a hip,” he says. “These drugs are not safe.”
With therapeutic substitutions, it’s not the pharmacy at
fault—most states do not allow pharmacies to make this sort of
substitution. The power here
lies with insurance plans and
pharmacy benefit managers
or PBMs, who buy and sell
drugs in bulk to eventually
distribute them to patients at
the other end of the chain. The
way internal medicine specialist
Uberto Muzzarelli sees it,
the policies degrade the kind
of care he can provide. “Basically,
you’re going backward,
in terms of treating patients
with 1990s or 1980s medications,
and it’s not often in the
best interest of the patient,”
he says. What’s more, in his<
specialty, the system leaves an opening for less thorough physicians
to make mistakes or cause harm through laziness. “There
are many patients who you can change from an ARB to an
ACE inhibitor if you do it right—you have to counsel the patient
about potential risks and you have to re-check them,” he says.
Oxnard urologist Max Stearns, MD, finds insurer therapeutic
substitution specially counterproductive when he’s trying to
get specific antibiotics for a patient. Some insurers’ faxes and
other communications objecting to a drug are well-meaning, by
pointing out a particular drug’s possible interactions with other
compounds, for example. “But sometimes what we’re giving the
patient, we understand, is just the only medicine that works in
this particular patient’s situation, and we have to go round and
round with the companies for a while before the patients can
actually get that medication approved,” he says. “Sometimes it’s
resolved when the insurance company just refuses to pay for it,
period.”
Mary and the Formulary
DRUG SUBSTITUTIONS aren’t the only onerous practice that
insurers and PBMs use to lower their costs for medicines. Even
something as seemingly straightforward as drug formularies
can be a rat’s nest of traps. First, just because a drug is on
an insurance companies’ formulary, it doesn’t mean that the
company will necessarily pay for it. Certain drugs require prior
authorization before they can be prescribed—and sometimes
authorizations can take months, even if it ends in a denial.
Worse, insurers can remove drugs from the list for no particular
rhyme or reason and they can change policies on how they
pay—or do not pay—for the drugs.
Take the case of patient we’ll call “Mary.” Mary is a 74-yearold< widow with multiple conditions including hypertension, sleep apnea, spinal stenosis, Felty Syndrome and more. Her secondary insurance is a Blue Cross-Blue Shield plan issued through the government that she receives as a benefit after the death of her husband. Mary was doing fine and living a healthy life as long as she received her medications.
Then the worst occurred. Mary received a letter from Medco, a PBM, stating that as of January 1, her medication plan had changed. The company had eliminated formularies altogether—instead every brand name drug would cost $65 per prescription for the first 30 prescriptions and free thereafter. The first four generics were free and $10 per prescription thereafter. Mary, who lives at the poverty level and who takes seven brand-name drugs—many of which have no generic equivalent—and six generics, simply could not afford the nearly $500 that a 3-month supply of her medications would cost. So, embarrassed about her lack of money, she simply stopped taking her medications.
In mid-February, Mary was admitted to the hospital in critical condition. She was immediately put back on her medications and released 24 hours later. Mary’s physician, Marcy Zwelling, MD, asked Medco to fax her the new rules. Medco refused. “Some patients can choose to move to a different health plan, but she can’t,” says Zwelling. “This plan pays for her medications. It’s a single-payer take it or die system—or how about take it and die?”
And Mary’s not alone. Because of cost concerns resulting from insurance company out-of-pocket requirements, working age adults are increasingly unable to access medically necessary prescriptions for their chronic medical conditions, according to a study from the Center for Studying Health System Change. African Americans were found to be twice as likely to have problems affording their drugs.
On the subject of formularies many insurers impose fail-first or step-therapy polices. Under these practices, patients must try certain less-expensive drugs before they will cover the doctorrecommended drug. And even if you have gone through steptherapy previously, changing insurers often means having to repeat the process. Sometimes your physician can get an exception to the rules, but sometimes not.
Whether an insurer covers the physician-recommended therapy is often left to a medical reviewer in the employ of the insurer—one that has no personal knowledge of the patient’s particular case. One patient received a letter from BlueCross of California denying his physician’s requested coverage worded thusly:
“Our Peer Clinical Reviewer, HARRY WEISMAN, MD, has determined: Based on the information provided, the request for the Non-preferred sedative hypnotic (sleeping medication) Rozerem cannot be authorized because there is no documentation that the short acting from of Ambien, Ambien IR, and the hypnotic medication, Lunesta, have not been tried in the past 180 days, or that patient has a history of substance abuse. As a result, it is not covered by your health benefit plan.”
The letter goes on to explain how a committee of physicians and pharmacists has determined “which medications are sound, therapeutic and cost-effective choices” and that “medical studies demonstrate that all of the medications were equally effective in their ability to induce or sustain sleep.” The company makes darn sure the patient understands that an MD made this recommendation—note the doctor’s name in all capital letters—and stresses the fact that a committee of physicians and pharmacists armed with medical studies helped make this determination. How can a patient not be expected to question his or her doctor?
More recently, a new bit of jargon has entered the medical
profession’s vocabulary—forced off-label prescribing. In certain
cases, health plans require that physicians prescribe drugs that
are FDA approved, but not for the condition that the patient
has. As an example, with the difficult-to-treat condition fibromyalgia,
insurers contracting with Medicare Part D required
patients to fail off-label therapy on gabapentin before beginning
on-label treatment with more-expensive Lyrica. Both drugs are
approved by the FDA, but only Lyrica is approved for treating
fibromyalgia.
But—and here’s the catch—there are also times when health
plans will not approve drugs for the conditions for which they
are FDA approved. In the end, it makes you wonder whether
FDA approval is waning in relevance.
Money Talks
AS A GROUP,
physicians are an ethical bunch. Most have had
the mantra “what’s best for the patient comes first” drilled into
their heads enough so that by the time they finish residency
they probably mumble it in their sleep. But that hasn’t stopped
the health plans from trying to incent physicians financially to
prescribe the medications they deem most cost effective—er,
appropriate.
Granted, in California it is illegal for health plans to give physicians financial incentives to prescribe certain brands of drugs over others, or for prescribing generics rather than brand name drugs. Yet the ever-clever health plans are finding ways to beat the system. In one example, health plans are starting to encourage physicians to prescribe generic drugs via pay-for-performance plans. In P4P, physicians’ practices are paid more if they meet certain criteria designed to improve care and efficiency, such as prescribing more drugs electronically or reducing patient cholesterol levels. And we’re not talking pocket change here on the extra pay—between 2003 and 2006, health plans distributed over $212 million in payments to physician groups across the country as a result of meeting P4P quality measures. And that was without the incentive for prescribing generic drugs.
Even more insidiously, pharmaceuticals have now begun hitting patients with incentives. Most of these incentives make the offer sound quite reasonable and scientifically valid. Our friends at Anthem Blue Cross, when pitching the “FREE tablet splitter” offer gave this explanation: “How does the Half Tablet Program work? If you take one of the eligible medications (see below list), you’d split a higher-strength tablet in half to reach your prescribed daily dose. This means you would need only half the number of tablets. If you have a co-pay for prescription drugs, the Half Tablet Program can cut that co-pay in half. If you have coinsurance, your out-of-pocket costs will be less, as you’ll need only half as many tablets.” The letter goes on to give an exact example.
While this may seem innocuous, there are good reasons doctors prescribe certain dosages for patients. And, elderly people are most at risk for being susceptible to these offers. This is especially dangerous since these are the people most likely to be taking numerous medications and who could be most easily confused by which pills they are supposed to split and which they are not.
Other offers include a
discount coupon for the
drug that the insurer prefers.
In a recent letter, Blue
Shield of California offered
one patient a $25 coupon
for Enablex, a drug they
were recommending as
a less-expensive medication that was “as safe and effective” as
the patient’s current drug for an overactive bladder, Detrol LA. We asked Department of Managed Health Care spokesperson
Lynne Randolph if the DMHC would follow up on this type of
offer, especially given the assertion that the replacement drug
was as safe and effective as the current drug. She would not
answer our questions on the telephone but did send a reply via
email stating “The DMHC has the authority to examine treatment
decisions under the existing grievance process, including
the use of the Independent Medical Review. The DMHC also
has an obligation to the rate-paying public to promote both
access to care but also seek ways to keep down the costs of care.
Therefore, it is not appropriate for the DMHC to make broad
comment on these types of issues unless the certain circumstances
and conditions are examined.” She continues to make
the point that prescription drug benefits are not mandated by law saying “Also because the prescription drug benefit is not
mandated, the DMHC looks at any changes proposed by health
plans very closely to make sure that the patient has as much
access to medically necessary drugs as possible.”
Still, the fact remains that these examples are not isolated
instances. Any doctor can offer numerous tales of patients
requesting particular drugs based on come-ons by pharmaceutical
companies. And many states are ahead of California in
offering prescribing incentives within P4P plans.
There Oughta Be a Law
WITH ALL OF the dangers the various barriers pose, you’d
think that we’d have strong laws in place to protect doctorpatient
rights. Yet, while California has some of the best patient
protections in the country, they are not enough. First, even
where legislation has been enacted, regulatory enforcement has
been minimal. Indeed, one of the core tenets of the Knox-Keene
Act—the body of law that regulates HMOs and some Blue Cross
and Blue Shield PPOs—is that enrollees receive accessible care<
through an adequate network of physicians. But despite evidence
that this is not happening, there has not been one single
enforcement action by the Department of Managed Health Care
against a plan for failure to meet this core requirement.
Worse, the laws we do have are a confusing tangle of jargon
and red tape that both physicians and patients find nearly
impossible to navigate. Indeed, a handful of physicians have
started hiring a full-time staff member just to handle prescriptions.
Others spend precious time writing letters to insurers
requesting exemptions, often to no avail. (You can find sample
letters at the CMA On-Call library).
Asked how well it works to write letters to the Medicare
Part D-affiliated insurance companies explaining why certain
drugs are the best option for a patient, Dr. Stearns, the
Oxnard urologist says with some resignation: “Sometimes
they’ll give authorization, sometimes
they won’t.” But out on the
border where he practices medicine,
the unemployment rate is
sky-high—nearing 30 percent by
his telling—and that means without
drug coverage, many of his
patients would choose between
medicine and food. “I think these
insurance companies are ripping
people off,” he adds.
The Condition My Condition Is In
THE BARRIERS WE'VE LISTED, however, only show a small
portion of the problem. Insurer tactics, rules and formularies
change constantly; new and better drugs are always coming
onto market; state laws are rewritten as new issues come to
light; and patients’ needs continually change as their conditions
improve or become worse, or as they develop new ones. It’s no
wonder physicians can feel like they’ve fallen into the rabbithole
leading to Alice’s Wonderland.
The real problem boils down to one simple fact—there are
tremendous conflicts at all levels of the drug prescribing system.
At the root is the corporate health plans’, PBMs’ and
HMOs’ need to make a profit. “We have care following financing,”
says Dr. Zwelling. “It’s what’s paid, not what works. And
that’s dangerous.”
