Tip Sheets

Here’s what you need to know when covering ‘step’ therapy

By Joseph Burns

All physicians, and especially those who care for patients with chronic conditions, complain that health insurers too often override their treatment decisions to control costs and ostensibly to improve care.

As of Jan. 1, health plans are allowed to override even more treatment decisions under a new rule from the federal Centers for Medicare and Medicaid Services. The rule allows Medicare Advantage plans use step therapy to restrict coverage when physicians prescribe drugs under Medicare Part B. In a step therapy protocol, a patient must fail to improve on a lower-priced medication before the insurer allows the patient to use a more costly drug, as Paul Sisson explained for The San Diego Union-Tribune. Also known as step protocol or fail first, step therapy is a form of prior authorization, a topic we covered in a tip sheet in August.

For patients requiring specialty drugs, step therapy is the most common type of coverage restriction health insurers use, according to researcher James D. Chambers, Ph.D., and colleagues in an article for Health Affairs, “Specialty Drug Coverage Varies Across Commercial Health Plans in the US.”

In another study published in Health Affairs, Chambers and colleagues reported that health insurers often require patients to fail on more than one drug before paying for the physician’s first-choice medication. For this study, “Variation in the Use of Step Therapy Protocols Across U.S. Health Plans,” Chambers and other researchers at the Tufts Medical Center Institute for Clinical Research and Health Policy Studies reviewed 1,208 step therapy coverage decisions. In 63 percent of cases, health insurers required patients to step through a single therapy, 37 percent required using multiple therapies, and 15 percent required three or more steps. Some insurers required patients to fail as many as five treatments before approving a certain medication, they wrote.

After CMS announced the new rule in August, UnitedHealthcare, one of the nation’s largest health insurers, said it would require Medicare beneficiaries in some of its MA plans to use step therapy, as Ike Swetlitz reported for Stat.

Physicians find step therapy to be needlessly burdensome and disruptive to the patient-physician relationship, as Shannon Firth reported for MedPageToday. Patient advocates agree and have said that insurers often use step therapy to control costs and that the protocol exacerbates patients’ conditions because the patient is not taking the medication the physician prescribed.

Little research has been done on how much step therapy exacerbates patients’ health, which leads opponents of step therapy to cite an 2008 article that Joel Farley, Ph.D., and colleagues published in the journal Clinical Therapeutics. At the time, Farley was at the University of North Carolina, but he’s now a professor in the Department of Pharmaceutical Care & Health Systems at the University of Minnesota.

For their research, Farley and colleagues documented the effects a step-therapy policy had on patients taking atypical antipsychotic medications. Note that the description of Farley’s research on PubMed is a bit confusing because it says, “Although PA [prior authorization] of atypical antipsychotics was associated with significant prescription savings to the Georgia Medicaid program, among a vulnerable cohort of patients with schizophrenia, an increase in outpatient expenditures was associated with overall savings.”

Tip: When citing Farley’s research, opponents of step therapy focus on the increase in outpatient costs but tend to leave out the part about overall savings. Therefore, it may be best for health care journalists to ask Farley for a copy of the full article, “Retrospective Assessment of Medicaid Step-Therapy Prior Authorization Policy for Atypical Antipsychotic Medications.”

One of the most grievous examples of how step therapy can make a patient’s condition worse occurred in 2014 when Blue Cross Blue Shield of Massachusetts required a 22-year-old college student with ulcerative colitis to use two medications his doctor did not recommend. After the student failed on those two drugs, surgery was necessary to remove his colon, as WBZ 4 CBS Boston reported.

CMS is introducing step therapy for Part B drugs, it says, because it can cut costs and allows insurers to pay for known medications that may carry lower risks for patients than newer therapies. Also, CMS recognizes that the medications patients get under Part B are different from those most Medicare Advantage patients get under Part D, as Firth explained well. Most MA members pick up Part D drugs at retail pharmacies. However, Part B drugs often are administered in physicians’ offices and so are more expensive and may include biologics, she wrote.

CMS’ new rule levels the field between drugs covered under parts B and D, making it possible for health insurers to negotiate better deals for patients, Firth added. The old rules may have stymied competition because Part B drugs were administered under one benefit, while a similar drug would be covered under a separate Part D plan, she explained.

To make way for the new rule, a memo from CMS Administrator Seema Verma said  the agency was rescinding a rule it issued in 2012, “Prohibition on Imposing Mandatory Step Therapy for Access to Part B Drugs and Services.” The new rule, “Prior Authorization and Step Therapy for Part B Drugs in Medicare Advantage,” is part of “a patient-centered care coordination program,” that will involve sharing savings with patients, Verma added. “This new guidance recognizes that MA plans may apply step therapy to control the utilization of services in a manner that does not create an undue access barrier for beneficiaries,” she explained.

CMS also said that MA plans must apply step therapy, “in a manner that does not create an undue access barrier for beneficiaries,” and cannot be used for emergency care.

In its “CMS Quality Strategy 2016,” the agency defined “patient-centered care” as being “respectful of and responsive to each patient’s preferences, needs and values to ensure that these values guide clinical decisions.”

After CMS issued the new policy, physician groups and medical societies, including the American Medical Association, said step therapy was dangerous for physician-administered drugs covered under Part B, as Evan Sweeney reported for FierceHealthcare.

When covering step therapy, one other important angle to pursue is the legal implications of the new rule. Writing in Health Affairs, Rachel Sachs outlined three significant legal concerns about the step therapy. For the Food and Drug Law Journal, Sharona Hoffman, Ph.D., wrote an in-depth article, Step Therapy: Legal, Ethical, and Policy Implications of a Cost-Cutting Measure, based on her research and personal experience with fail first.

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