Insurer Profit Goals Prohibit Doctor-Prescribed Treatments

Today, the Global Healthy Living Foundation (GHLF) announced a newly published study reporting that despite a well-intentioned investment of time and money to advocate, state-by-state, for protective, patient-centered step therapy laws, the resulting legislation generally protects less than 10 percent of state populations. Further dampening the impact of these laws are a lack of codified penalties, meaning that most of these laws cannot be enforced. The Health Economics Policy and Law peer-reviewed study titled “Do Patients Benefit From Legislation Regulating Step Therapy?” is the result of a Global Healthy Living Foundation analysis of the structure and language of step therapy laws in 29 states.

“Despite most insurance companies employing step therapy to manage costs, there is no evidence that it improves patient outcomes and, certainly, patients see no cost savings. Rather, patients risk much when their access to prescribed medications is delayed as they wait to 'fail first,' trying medications in an order determined by their insurer versus their doctor,” said lead study author Louis Tharp, executive director and cofounder of GHLF. “It was incredibly frustrating to learn that our success working with many other patient and provider groups to advocate for improved step therapy regulations did not meaningfully help our patients. The laws cover too few people and, in many states, are unenforceable because the laws lack penalties, thereby removing any incentive for insurance companies to cooperate. Yet, step therapy is too harmful to patients for us to simply give up. We’ll be going back to the states’ lawmaking bodies to connect with legislators – one by one, if needed -- to educate them about why these laws need to be revised.”

Zoe Rothblatt, MPH, the study co-author, added that “many patients and physicians are not aware of laws that could protect them and insurers are not informing them of their rights when they force patients to fail first.”

Laws Rendered Moot the Moment They Are Enacted

As explained in the study, although no state prohibits step-therapy protocols by insurers, 29 states now have laws requiring a process that helps healthcare professionals protect their patients from step-therapy protocols by detailing a list of exemptions that insurers are required to accept. Some of the most common exceptions are obvious but needed to be codified into law because insurers were ignoring them. They include: because a patient has already tried and failed on a first-step drug, the drug is expected to be ineffective by the physician, or the drug will likely cause adverse reaction or harm (to name three). However, the laws vary widely state-to-state and provide little protection in practice.

• Only six states cover all of the six most common reasons for requesting an exemption; California and Oregon cover none, and Missouri, Arkansas, and Colorado cover only one.
• In 10 states, there is no appeal process if an exemption is denied, further weakening these laws.
• Some states impose specific time periods within which the insurer must respond, but in nine states, insurers or PBMs have no obligation to respond, at all, making the law meaningless.
• In California and Mississippi, because the law states that step therapy that is not clinically effective shall not last longer than 60 or 30 days, the law in practice allows step therapy for a period of time when harm may still occur.

In addition to the laws lacking teeth, they cover only a small portion of Americans in each state, those who purchase state-regulated health plans. With that in mind, about half of all Americans are covered by employer insurance and employer-provided health plans are under the purview of federal Employee Retirement Security Act of 1974 (ERISA), meaning these cannot benefit from the protection of state step therapy laws. Medicaid covers around another 20 percent, but only seven states include protections for Medicaid beneficiaries under the step therapy legislation and the lack of procedures to enforce the laws, combined with copious paperwork and work requirements, further diminish the benefit.

Fully insured employees who would ordinarily benefit from state step therapy legislation (unless specifically excluded as in Kansas) may not be protected because of territorial prerogatives and it cannot be assumed that everyone in a fully insured plan is protected by state step therapy laws. Therefore, when considering fully insured, the percentage of state residents covered by state step therapy laws ranges from thirteen percent (North Carolina) to 27 percent (California) for fully insured beneficiaries. In the few states where Medicaid is accounted for, protections range from 14 percent (Kansas) to 34 percent (New Mexico). On average, revised step therapy legislation covers those with nongroup insurance who make up less than 10 percent of state residents. The state with the potentially highest proportion of people protected (~33.6%), California, is one of three states with the weakest step-therapy laws.

“It’s time to shine light on how these insurance protocols are negotiated – secretly – between the pharmaceutical manufacturers, the pharmacy benefit managers and insurers, and, then, enact new laws or revised laws on both the state and federal level to protect patients no matter which of our 50 states or territories they reside,” added Steven Newmark, JD, MPA, Director of Policy and General Counsel of the Global Healthy Living Foundation. “In 2021, we hope that the Biden administration will usher in a new bipartisan effort in Congress to help patients mired in step therapy and barrier-inducing protocols better access needed medications. A federal law like U.S. Senate bill S.464 (The Safe Step Act) would eliminate the national network of holes in step therapy laws, and uniformly protect patients from this unhealthy policy,” Newmark added.

In the meantime, Global Healthy Living Foundation recommends that patient and provider groups continue efforts to reform step therapy by:

• Committing resources to rule-making assistance for existing state laws, including deploying subject matter experts to consult on revisions to existing laws.
• Educating patients, healthcare professionals, social workers, employers, and state government administrators about existing laws to keep legislation from becoming unknown and unused.
• Sharing model legislation, such as that created by the Physicians Research Institute (2019), to help legislators shape effective step-therapy regulatory legislation and reduce the cost of advocacy for state laws in those states that do have them yet.
• Recommending infrastructure to audit compliance and patient benefit from existing and to-be-crafted step therapy legislation.
• Engaging in patient-centered medical research projects to create patient-reported outcomes data that provides an objective assessment of patient benefits related to step therapy.

GHLF will also support the Safe Step Act, first introduced in the 115^th Congress (2017-2018), “to amend the Employee Retirement Income Security Act of 1974 to require a group health plan or health insurance coverage offered in connection with such a plan to provide an exceptions process for any medication step therapy protocol, and for other purposes.”

Fail First Puts Patients and Providers Last

Used to enhance insurer profits, step therapy is the most commonly used coverage restriction for specialty drugs, the kind often used by patients living with serious, chronic conditions. In a step-therapy “fail first” protocol, a person must have tried and found ineffective one or more therapies that the insurance company considers the first-step before they will be reimbursed for a medication considered to be a second or higher step. Steps are based on medication payment negotiations between the insurance company, pharmacy benefit managers, and manufacturers. Therefore, the patients and physicians are not the primary decision makers regarding which medications are accessible, insurance companies are.

About Global Healthy Living Foundation

The Global Healthy Living Foundation is a 501(c)(3) nonprofit organization whose mission is to improve the quality of life for people with chronic illnesses (such as arthritis, osteoporosis, migraine, psoriasis, inflammatory bowel disease, and cardiovascular disease) by advocating for improved access to health care at the community, state, and federal levels, and amplifying education and awareness efforts within its social media framework. GHLF is also a staunch advocate for vaccines. The Global Healthy Living Foundation is the parent organization of CreakyJoints®, the digital community for millions of arthritis patients and caregivers worldwide who seek education, support, activism, and patient-centered research through our ArthritisPower® (ArthritisPower.org) Research Registry. In response to the COVID-19 pandemic, GHLF started a Patient Support Program, informed by a patient council made up of people living with a wide range of chronic illnesses, that now serves more than 30,000 people. Via CreakyJoints, GHLF also hosts PainSpot (PainSpot.org), a digital risk-assessment tool for musculoskeletal conditions and injuries, and eRheum (eRheum.org), for telehealth and virtual-care support. Visit ghlf.org for more information.

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