The Cost of Requiring Drugs to Fail First

On September 7, Administrator Seema Verma of the DHHS’ Centers Medicare and Medicaid Services (CMS), received a letter signed by 94 state medical societies and national organizations of physicians and other health professionals expressing their deep concern about her August 7 Memo indicating that Medicare Advantage plans “will no longer be prohibited from utilizing step therapy protocols for physician administered drugs covered under Medicare Part B beginning in 2019.”

Step Therapy is an approach to controlling medication costs for insurers. It is already implemented in many employer based insurance markets. Verma announced that it will be applied to Medicare Part D next year, as specified in the Drug Pricing Blueprint (“American Patients First”) released by the Trump administration last May. The National Psoriasis Foundation describes this approach as requiring “a patient to try, then fail, on lower-cost or older drugs selected by their insurance company before receiving coverage for the drug originally prescribed by their health care provider.”

Step Therapy requires providers to prescribe the least expensive drug that might work for the given condition and prohibits them from prescribing a more expensive drug unless or until the first has failed to work. This process reduces costs to the insurer which, in the case of Medicare, is primarily the government. It also, according to the September 7 letter signers, endangers patients.

Last Monday, Kaiser Health News reported on the experience of a few health care institutions whose insurers had already adopted Step Therapy rules. They noted that “providers will still have the opportunity to appeal Medicare rules and request exceptions for patients (such as those living with HIV) who can be endangered by treatment interruptions” but “the physician must tell the plan why its restrictions should be lifted and provide extensive documentation.” They added that even with expedited exception requests, people are reduced to going without their drugs for 24-72 hours and “plans frequently do not meet the 72-hour deadline.” Ultimately, of “the 3,498 cases that were decided, just 1 in 10 beneficiaries won decisions fully or partially in their favor, according to Medicare statistics.”

For Every Arkansan Enrolled in Work Requirements, Four More Lost Their Coverage

Last week, Arkansas Governor Asa Hutchinson announced that, of the initial 26,000 Medicaid recipients Arkansas residents required to enroll last Spring in the new work requirements, 1,000 participated in the plan successfully and 4,353 have now become ineligible for coverage because they did not comply with the requirement. The Washington Post reports that the latter are “the first Americans to lose the safety-net health insurance under rules compelling recipients to work or prepare for a job to keep their coverage.”

The state requires that Medicaid participants qualifying for work requirements must report to the “Arkansas Works!” Medicaid department on their work, work-seeking, job training or other activities that meet the work requirements. Reporting can be done online.

Unfortunately, 25% of Arkansans live in areas without internet access. In some counties, three quarters of the population can’t get online, according to the Federal Communications Commission. And cell phone use is expensive.

Active opponents of Arkansas’ work requirement claim that the “logistics of the work rules are ill-suited to the lives of many poor Arkansans, who may not have computer access to report their hours online or may not have even received – or understood – letters the state sent telling them how to stay on Medicaid.”

Most recently, Bloomberg reports that Congress members Elijah Cummings (D-MD) and Raja Krishnamoorthi (D-IL) sent a letter today (September 20) on this issue to Trey Gowdy (R-SC), chair of the House Committee of Oversight and Government Reform. As members of that committee, they asked Mr. Gaudi to issue a subpoena to compel DHHS, and specifically CMS, to “produce documents the Trump administration had withheld regarding efforts to impose burdensome new work requirements” on Medicaid beneficiaries. Their previous requests for this information have been disregarded. Stay tuned!

Federal Funding Prospects for FY2019

The US House and Senate have agreed in conference on proposed FY 2019 funding. This week, the Senate voted to approve these negotiated figures. The House of Representatives’ vote on final approval is expected next week.

Following are a few of the budget figures relevant to our field. Bold face numbers are the amounts agreed on by legislators in conference. The President’s requests and FAPP’s requests are also provided here to highlight the contrasting parameters legislators have to consideration. “FAPP” is the Federal AIDS Policy Partnership, a national coalition to which the AAHIVM belongs.

CDC HIV prevention funding: $788.7 million (President’s request $748.7; FAPP request $872.7)
Ryan White Program total: $2.319 billion (President’s request $2.260; FAPP request $2.465)
Ryan White Part A: $655.9 million (President’s request $655.9; FAPP request $686.7)
Ryan White Part B, Care: $414.7 million (President’s request $414.7; FAPP request $437.0)
Ryan White Part B, ADAP: $900.3 million (President’s request $900.3; FAPP request $943.3)
Ryan White Part F, AETCs: $33.6 million (President’s request $0.0; FAPP request 35.5 million

View the latest Policy Update here.