Doctors, insurers squabble over drug coverage
Detroiter Glenn Ford, 63, could have avoided a trip to the emergency room recently if he’d taken the medicine his doctor prescribed.
Ford’s insurance company wouldn’t authorize the prescription, despite numerous appeals from his physician. The prescription costs more than $300 out-of-pocket, so Ford never had it filled.
“Deny, deny, deny,” Dr. Herbert Smitherman said of the response to his many attempts to convince the insurer that less expensive medicines hadn’t worked on Ford. “I’ve been through this over and over.”
Initially established by insurance companies or pharmacy benefits managers (PBMs) as a tool to control costs of doctor-prescribed medications, the idea of “prior authorization” for prescriptions is not proving as appropriate and economical as envisioned.
“A PA (prior authorization) is a good cost management strategy, to get the right drug to the right patient at the right time, but I think it’s been overused,” said Cheryl Larson, vice president of the Midwest Business Group on Health, which represents large employers and their human resources professionals.
Critics, including many doctors, argue that the practice adds to health costs and deprives patients of medications they need.
“Prior authorization can be penny wise and pound foolish,” said Loretta V. Bush, CEO of the Michigan Primary Care Association.
“The process might save money up front, but patients who are denied their doctor’s first choice of medication may end up getting sicker, costing more money in the long-term. In addition, the time and money spent addressing prior authorizations could almost certainly be put to better use for patient care. Doctors should have the authority to make the best possible decisions for their patients.”
Supporters, however, say the prior authorization process is more necessary than ever given recent dramatic price hikes for all medicines and the advent of high-priced specialty drugs. Prescriptions are the fastest growing component of health care costs, comprising 17 percent of U.S. health care spending in 2016, according to the Milliman Medical Index, an annual actuarial analysis.
In an effort to manage medication costs, insurers are hiring third-party outfits such as Express Scripts and CVS Health to act as gatekeepers of their pharmacy benefits programs.
Larson contends the process can feel, to doctors, like interference by those vendors. “The provider is thinking, hey, I diagnosed this patient and I chose this drug for a reason, and well, they often have to justify that reason for the PBM or the health plan,” she said.
Stepping up the costs
Prior authorization requests are sometimes denied for reasons that make good economic sense without jeopardizing the health of the patient, Larson noted. And if money can be saved with no medical drawbacks, doctors often rewrite prescriptions to comply with the PBM’s preference.
Step therapy, for example, is the practice common among doctors of starting a patient out on the least expensive medication. If that doesn’t work, the patient will be stepped up to a more expensive option. A patient might try several progressively more expensive medicines before finding one that works.
“Step therapy makes sense,” Larson said. “If you think about somebody that’s on a diabetes medication, before you put them on the most expensive why wouldn’t you start them out on (a less expensive medication) and see how they do?
“Those kind of value-based designs are where you’re saying to the employee: ‘If you’re a good soldier and you try this medication, maybe before the one that the doctor wants you to have, we’ll wave your co-pay or reduce the cost, and for most people those medications work.’ ”
The situation is more complicated when a patient requires expensive specialty drugs such as biologics, genetically engineered proteins derived from human genes that have revolutionized the treatment of chronic diseases like rheumatoid arthritis, psoriasis, Crohn’s disease and multiple sclerosis.
For Senderra Specialty Pharmacy, a Texas-based company that recently established a Patient Services Center in Flint, helping patients and doctors navigate prior authorization is part of their business model.
Senderra fills prescriptions for high-priced specialty drugs that can cost from $4,000 per month, to as much as $15,000 to $20,000 per month, and the prior authorization requirements are complex and rigorous.
“We have a staff of nurses and pharmacists that all they do is take phone calls from patients who are concerned about their disease state,” said Senderra CEO Win Purifoy.
“We’re big-time patient advocates. The access to get specialty drugs paid for is very complicated and very detailed. We navigate the insurance world for them on their behalf.”
The Flint center employs about 300 people, from patient care coordinators, to nurses, oncology specialists and pharmacists. In addition to fielding calls from patients, they provide prior authorization assistance to 15,000 physicians nationwide.
The process can be so complex that doctors and patients don’t always know who’s in charge of authorizing their prescriptions. Ford, the Detroit patient, was covered by Molina Healthcare insurance. When his prescription was denied, Smitherman, his doctor, filled out the authorization form himself and faxed it in to Molina.
Asked why they wouldn’t cover Ford’s prescription, Molina spokeswoman Leigh Woodward said Ford’s plan is provided through Healthy Michigan, the state’s expanded Medicaid program, and Ford’s prescription is not on that program’s list of preapproved drugs.
Woodward said Molina filled more than 5 million prescriptions for Medicaid in Michigan in 2016, with only about 50,000 requiring a prior authorization. Less than 10 percent of those resulted in a denial.
“When a prior authorization is required, Molina has a robust review process that includes outreach to the provider, specifically to decrease the potential of a denial,” Woodward said. “ Our goal is to resolve the request so the member receives the requested medication or an appropriate formulary alternative.”
Costs and complaints
Whether a patient’s prescription is approved or denied hinges on his or her insurer’s list of pre-approved medications. Drugs that are not on the list require prior authorization.
Pharmaceutical manufacturers often offer lucrative rebates or discounts to insurers and PBMs in exchange for placing their products on the preapproved list.
“(O)ver the years, how do I say this nicely, some entities have come along and found a way to make money off of (prior authorization),” Larson said. “PBMs make money every time, or the health plans make money every time they do a prior authorization.”
Larson added: “Most people believe that there’s a pharmacy and therapeutics committee (deciding what’s on the formulary), that maybe there’s a medical director, and it’s supposed to be (based on) clinical efficacy. But the truth is, most of the time or some of the time what is put on the formulary is based on what kind of a rebate that PBM got from the pharmaceutical manufacturer.”
Because each plan has its own pre-approved medications list, problems can arise when people switch plans. That situation arose this year for Michigan state employees, when the state switched its prescription benefit manager from MedImpact to Optum RX on Jan. 1.
“Thousands of prescriptions were transferred,” Matt Fedorchuk, a deputy Civil Service director, confirmed in an email to the News, “but some were subjected to re-authorizations.”
The state Civil Service Commission received more than 80 complaints in January and February alone.
Ken Moore, president of the Michigan State Employees Association that represents about 3,700 of the states’ labor, trade and regulatory employees, said the union was keeping an eye on the situation.
“It appears there’s some additional authorization being implemented and additional red tape to get existing long-term prescriptions,” Moore said. “This was not a change of benefits, it was a change of vendor.”
Larson said employers aren’t always aware of coverage decisions that affect the quality of health care provided to their employees.
“There should be very clear guidelines, especially for self-insured employers who are taking the financial risk, (to ensure that) if they want to have a drug available to an employee they should have that,” Larson said.
“There needs to be more watching of the hen house.”