As a benefits consultant, it’s easy to track and analyze benefit storm clouds on the horizon. The hard part is balancing when to alert our clients to these approaching storms and how much detail to provide. Given that the government often takes action with updated guidance or an implementation delay just before the storm hits, those who simply ignore the storm clouds and hope it doesn’t rain are often rewarded. Meanwhile, those of us in the camp of tracking and analyzing these storms and alerting our clients when impact seems likely end up crying wolf quite a bit.
But this is no warning. We are in the middle of a specialty medication storm.
What began subtly 15 years ago — with $15,000 drug treatments seen as “extremely high”— picked up a few years ago with certain treatments for rheumatoid arthritis and Hepatitis C, for example, surpassing $50,000. Today we’re in a full-blown hurricane. For example, on my desk today is a specialty medication claim for $750,000.
What can midsize employers sponsoring self-funded health plans do to weather this storm? As Michael Zucarelli of PharmD and I shared a few years ago, step one is covering prescription drugs under stop-loss insurance.
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What else can employers do?
Sit down with your benefits consultant and its pharmacy consulting team and evaluate the pre-authorization measures in place on both the medical pharmacy and prescription drug benefits. Consider that these high-cost specialty mediations often run through the medical side of your plan.
For example, in the above $750,000 claim example — because the drug was administered in a provider setting — the claim ran through the medical plan’s third party administrator and not through the pharmacy benefit manager. This particular employer had elected not to implement the highest level of pre-authorization processes on the medical side. The employer’s historic concern with implementing this enhanced pre-authorization service was mostly regarding the projected impact on advanced radiology procedures, such as MRIs. However, this TPA’s enhanced pre-authorization service also applies to provider-setting pharmacy claims, including specialty medications.
Fortunately, this employer carries stop-loss coverage far below this $750,000 claim. My retrospective question was if the enhanced pre-authorization service had been in place, would this claim have been approved? The resulting answer was no. While this TPA’s clinical team deems this drug medically necessary for certain diagnoses, the respective claimant’s diagnoses was not one of those. Thus, the enhanced pre-authorization process would have denied the requested treatment plan. What would have happened next? Would the physician have recommended a lower cost treatment? How much would that alternative treatment plan have cost? Would that cost have been lower than the individual stop-loss coverage? We’ll never know these answers.
Meanwhile, what would have happened if this $750,000 drug was self-administered and flowed through the prescription drug benefit side? As this employer has the highest level of pre-authorization service provided by its PBM, this drug obviously would have been denied, right? No, after researching the matter, the PBM reported that it would have been approved! This PBM considers the use of this drug for the claimant’s diagnosis to be clinically appropriate! Do you see how complex and incongruent these matters can be?
What are a few other plain-vanilla mitigation measures employers can implement?
· Tighten up the formulary.
· Enhance the step-therapy measures.
· Amend the plan to prevent coupons and other discounts from reducing the participant’s group health plan cost-share. (Certain states are now banning this action on fully insured plans.)
Now’s a great time, in concert with your benefits consultant, TPA and PBM, to review your contracts, plan documents and clinical programs and ask for recommendations.
Finally, as you may know, there are several other much more aggressive mitigation techniques certain employers are now considering. You’ll know these when you see them. When you do, please scratch these concepts well below the surface and involve your risk managers and attorneys in any evaluation.
