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Analysis Health Systems

Disability Advocates Are Fighting a Dangerous Insurance Policy in the Midwest

Wendy Lu

Step therapy, also known as a “fail-first” protocol, forces people to try and “fail” cheaper drug alternatives as an attempt to cut costs for insurers. But experts say it’s a physically, mentally, and financially exhausting process for patients.

It took seven years before Dantia MacDonald was able to get the right treatment for her mental illness.

Up until then, she had experienced persistent paranoia and delusions that led her to believe she wasn’t sick. After multiple hospitalizations, a stint in jail for a nuisance crime, and the loss of her career, MacDonald finally found relief in 2015 when she switched medications. Her symptoms subsided within three days.

This February, the Kansas resident and Medicaid recipient stood before the state senate public health and welfare committee and testified in favor of a bill challenging “step therapy,” a health insurance policy that would require her to try cheaper—and most likely less effective—drugs before she’d be able to take the medicine that actually made her better.

In a letter to the committee, MacDonald wrote that she would essentially lose Medicaid benefits if she married her partner—a heartbreaking reality that many disabled people in relationships face—and his insurance would require her to go through step therapy.

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“I could lose another seven years of my life and end up costing the system much more money due to stays in psychiatric hospitals or even jail,” she wrote in the letter.

Step therapy, also known as a “fail-first” protocol, forces people to try and “fail” cheaper drug alternatives as an attempt to cut costs for insurers. But experts say it’s a physically, mentally, and financially exhausting process for patients, who essentially must prove that they actually need the medicine that works best for them.

Step therapy is a fairly common policy for both public and private health insurers. As of 2014, nearly 75 percent of large employers around the country reported offering employees health-care plans that use step therapy protocols, according to the American Journal of Managed Care. It can be complicated and lengthy: One September 2018 analysis by the journal Health Affairs found that, among 1,208 coverage decisions involving step therapy by 17 of the top commercial health insurers, 63 percent of decisions required patients to step through one drug, 37 percent required steps through multiple drugs, and 15 percent included at least three steps.

Although step therapy has an impact nationwide, activists are focusing on Kansas as a potential “target state” in the Midwest to pass step therapy-related reform. Although several neighboring states have passed step therapy-related reform, the state’s political tug-of-war on Medicaid expansion has stalled progress. Among Midwestern states, North Dakota, South Dakota, Michigan, and Nebraska have not established any step therapy reform or protections at all.

In some cases, step therapy does make sense, said Kari Ann Rinker, senior advocacy manager for the National Multiple Sclerosis Society who focuses on policy in Kansas, Missouri, and Oklahoma. For people who need antibiotics or have a temporary health issue, shifting to a generic medication may be an appropriate cost-saving method for both patients and insurers.

But for people with chronic illnesses and health conditions like diabetes, multiple sclerosis, or cancer, Rinker says, insurers that overwrite a doctor’s drug prescription can do more harm than good.

It can lead to more medical exams, more hospital visits, and higher health-care costs overall, since patients using the wrong medication—including people with mental illness, like MacDonald—may develop health complications that could have been avoided in the first place, says Sherrie Vaughn, executive director for the Kansas branch of the National Alliance on Mental Illness.

“If they can’t get the medications that they need to help them with their mental illness symptoms, then they’re not going to be able to function at the level that they want to,” said Vaughn, who is based in Topeka.

Ironically, people with chronic health issues are more likely to go through step therapy than others because specialty medications cost significantly more, Rinker says. But for many of those patients, that medicine is their only option.

“A lot of times, shifting them to a different medication has negative consequences that can result in death,” Rinker said.

Lower Costs for Whom?

Rinker, Vaughn, and MacDonald are just three of the many disability advocates who are fighting to reform step therapy policies in the Midwest. Theirs is part of a broader nationwide effort to increase access to medications for people who need them.

Insurance carriers, including Aetna, have previously been fined hundreds of thousands of dollars for violations related to step therapy and for failing to address a patient’s grievance for denial of his medication. In reality, however, few patients have the time, energy, money, and resources to appeal insurance claims that have been denied, let alone submit grievances or go to court.

In fact, out of 41 million claims denied in 2017 by insurers offering individual plans through healthcare.gov, consumers appealed fewer than 200,000 of them—a rate of less than 0.5 percent, according to a February report published by the Kaiser Family Foundation.

The policy’s high stakes, and potentially deadly consequences for patients, aren’t new.

In May 2010, an infant with epilepsy in Oklahoma died after being forced to “step through” multiple ineffective drugs. He was in the midst of failing his third drug when he died, shortly before his first birthday.

More recently, disability activist Carrie Ann Lucas died in February after UnitedHealthcare reportedly denied her request for medication and she was forced to use a less effective drug. “United Healthcare’s attempt to save $2,000 cost over $1 million in health care costs over the past year,” the obituary on her Facebook page read.

Some individual states, including Kansas, are attempting to pass legislation to address the issue. SB 93, the Kansas legislation for which MacDonald testified, would reinforce existing patient protections that allow Kansans to request an exception and appeal a denial. The protections, which were established when Kansas passed its step therapy policy for Medicaid recipients in 2016, also require insurance companies to respond to such requests within 72 hours, or 24 hours in emergency cases. Exception requests that meet certain criteria — for instance, if a patient is already stable on a medication or if the drug alternative would cause irreversible harm — must be honored.

Activists say SB 93 will bolster these protections by legislatively enshrining them for all insurance plans, including Medicaid and private coverage, as well as adding other requirements. To ensure accountability, exceptions processes must be posted on insurers’ websites and medications will be approved automatically if exception requests aren’t addressed within the time limit, to help ensure accountability, Rinker says.

“It puts some basic guardrails in the process that allows the physician and patient to have more of a voice,” Rinker said.

Alongside MacDonald, members from well over a dozen patient advocate groups, including the National MS Society, Alliance for Patient Access, and the Disability Rights Center of Kansas, testified about their experiences with step therapy. The only presenters who spoke out against the bill were from the health insurer Cigna and Prime Therapeutics, a pharmacy benefit company.

In her testimony to the committee, LuGina Mendez-Harper, a pharmacist with Prime Therapeutics, said SB 93 doesn’t provide insurers enough time to review exceptions. She also argued that step therapy saved customers of Prime Therapeutics around $11.6 million in premiums and out-of-pocket costs in 2017, although that doesn’t take into account the cost of hospital visits and other health-care bills that patients may have taken on from taking less effective medicine.

Additionally, “a higher cost does not necessarily mean a drug is better,” Larrie Ann Brown, legislative counsel for Cigna, wrote in testimony.

Ultimately, the senate public health and welfare committee took no action on the bill, and it’s been shelved until next session.

A “Possible Vehicle” for Medicaid Expansion

More than 20 states, including Texas and Iowa, have already passed step therapy reform bills that provide exemptions for patients who need to access the right medications in a timely manner.

Most recently, in April, Oklahoma unanimously approved legislation in a single session that would allow exceptions for patients who need their prescribed drugs and can’t afford, medically at least, to go through trial runs with various other drug alternatives — especially if those drug alternatives are already expected to “cause an adverse reaction or harm” or be ineffective. The law also requires 72-hour standard and 24-hour emergency responses from insurers.

And yet, in Kansas, even with more than 20 people providing testimony in support of SB 93, the senate public health and welfare committee still failed to take a vote. February’s hearing was disability advocates’ third attempt at passing it out of committee. By the time the committee revisits the bill in 2020, it’ll be year four.

Rinker believes Kansas is struggling to pass the bill, which she called “commonsense reform,” because of one primary reason: the state’s fight about Medicaid expansion. Although most Midwestern states have already adopted Medicaid expansion, South Dakota, Kansas, Missouri, and Wisconsin are among the 14 in the country that still have yet to do so.

The step therapy reform bill would apply to all patients whose insurance plans use step therapy policies, including patients who use KanCare, the state’s privatized Medicaid program. Bills that are even remotely relevant to Medicaid expansion are viewed by legislators as “possible vehicles for amendments” to force the Republican-controlled legislature to vote on Medicaid, Rinker said.

Democratic Gov. Laura Kelly would likely support legislation expanding Medicaid, as well as the step therapy reform bill and other health-care bills that haven’t yet reached her desk.

Kansas seems to be falling behind neighboring states that have already passed step therapy reform, Rinker said, including Oklahoma, which also has a GOP-controlled legislature.

“The fact that a state very similar, politically speaking, was able to do this in one year’s time shows the momentum of this issue,” said Rinker, who does similar policy work in Oklahoma as well. “So it just shows what a large impact not expanding Medicaid has had on health policy discussion in the state of Kansas.”

Disability advocates have met similar opposition in Missouri, which passed a modest but—as Rinker puts it—“inadequate” compromise bill in 2016 that allows health-care providers to request an exception to step therapy protocol on behalf of their patients.

“I would like to see a stronger bill introduced in the future but don’t know if there is the legislative appetite for it,” Rinker said of Missouri.

Lacy Fowler, 36, is a Missouri resident who has been repeatedly denied the medication she needs to treat her arachnoiditis, a chronic pain disorder of the spinal cord. In 2014, Fowler founded Arachnoid Chronicles, which supports patients struggling to get through step therapy and brings awareness to policy campaigns like Fail First Hurts.

Step therapy reform is important, she said, for patients like her who need pain medication to be able to function every day and do things like drive a car.

“Your body has to have time to heal, and you cannot centralize your pain,” said Fowler, who lives outside Springfield. “It eliminates so many things that you can do.”

In Kansas, the struggle to improve medication access and health care for all Kansans is expected to continue through 2020.

“Until that issue of Medicaid expansion has been laid to rest, that a bill has been passed, other health-care initiatives will languish,” Rinker said, adding that patients are the ones who end up bearing the brunt of delays in health-care reform.

“Just because you’re living with a disability or diagnosis doesn’t mean that you’ll automatically get health care,” she said.

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