Rheum for Action

When we talk about advocacy in rheumatology, we think about our patients and how we can help them gain access to the best care. Whether it’s filling out a prior authorization form or testifying before Congress, it is an action we perform that ultimately helps our patients achieve that care. We are familiar with many of the obstacles that block the path to the best care and interfere with our patient-doctor relationships. Much work has been done to pass legislation in the states to mitigate some of those obstacles, such as unreasonable step therapy regimens, nonmedical switching, and copay accumulators.

CSRO

Unfortunately, that state legislation does not cover patients who work for companies that are self-insured. Self-insured employers, which account for about 60% of America’s workers, directly pay for the health benefits offered to employees instead of buying “fully funded” insurance plans. Most of those self-funded plans fall under “ERISA” protections and are regulated by the federal Department of Labor. ERISA stands for Employee Retirement Income Security Act. The law, which was enacted in 1974, also covers employee health plans. These plans must act as a fiduciary, meaning they must look after the well-being of the employees, including their finances and those of the plan itself.

The Coalition of State Rheumatology Organizations (CSRO) has learned of a number of issues involving patients who work for self-funded companies, regulated by ERISA. One such issue is that of mandated “white bagging.” White bagging has been discussed in “Rheum for Action” in the past. There is a long list of white-bagging problems, including dosing issues, lack of “chain of custody” with the medications, delays in treatment, mandatory up-front payments by the patient, and wastage of unused medication. However, there is another issue that is of concern not only to the employees (our patients) but to the employer as well.

Employers’ fiduciary responsibility

As mentioned earlier, the employers who self insure are responsible for the financial well-being of their employee and the plan itself. Therefore, if certain practices are mandated within the health plan that harm our patients or the plan financially, the company could be in violation of their fiduciary duty. Rheumatologists have said that buying and billing the drug to the medical side of the health plan in many cases costs much less than white bagging. Conceivably, that could result in breach of an employer’s fiduciary duty to their employee.

Evidence for violating fiduciary duty

CSRO recently received redacted receipts comparing costs between the two models of drug acquisition for a patient in an ERISA plan. White bagging for the patient occurred in 2021, and in 2022 an exemption was granted for the rheumatologist to buy and bill the administered medication. Unfortunately, the exemption to buy and bill in 2023 was denied and continues to be denied (as of this writing). A comparison of the receipts revealed the company was charged over $40,000 for the white-bagged medication in 2021, and the patient’s cost share for that year was $525. Under the traditional buy-and-bill acquisition model in 2022, the company was charged around $12,000 for the medication and the patient’s cost share was $30. There is a clear difference in cost to the employee and plan between the two acquisition models.

Is this major company unknowingly violating its fiduciary duty by mandating white bagging as per their contract with one of the three big pharmacy benefit managers (PBMs)? If so, how does something like this happen with a large national company that has ERISA attorneys looking over the contracts with the PBMs?
 

Why is white bagging mandated?

Often, white bagging is mandated because the cost of infusions in a hospital outpatient facility can be very high. Nationally, it has been shown that hospitals charge four to five times the cost they paid for the drug, and the 100 most expensive hospitals charge 10-18 times the cost of their drugs. With these up-charges, white bagging could easily be a lower cost for employee and company. But across-the-board mandating of white bagging ignores that physician office–based infusions may offer a much lower cost to employees and the employer.

Another reason large and small self-funded companies may unknowingly sign contracts that are often more profitable to the PBM than to the employer is that the employer pharmacy benefit consultants are paid handsomely by the big PBMs and have been known to “rig” the contract in favor of the PBM, according to Paul Holmes, an ERISA attorney with a focus in pharmacy health plan contracts. Clearly, the PBM profits more with white-bagged medicines billed through the pharmacy (PBM) side of insurance as opposed to buy-and-bill medications that are billed on the medical side of insurance. So mandated white bagging is often included in these contracts, ignoring the lower cost in an infusion suite at a physician’s office.
 

Suggestions for employers

Employers and employees should be able to obtain the costs of mandated, white-bagged drugs from their PBMs because the Consolidated Appropriations Act of 2021 (CAA) mandates that group health plans ensure access to cost data. The employer should also have access to their consultant’s compensation from the PBM as Section 202 in the CAA states that employer benefit consultants must “disclose actual and anticipated cash and non-cash compensation they expect to earn in connection with the sale, renewal, and extension of group health insurance.”

It would be wise for all self-insured companies to use this section to see how much their consultants are being influenced by the company that they are recommending. Additionally, the companies should consider hiring ERISA attorneys that understand not only the legalese of the contract with a PBM but also the pharmacy lingo, such as the difference between maximum allowable cost, average wholesale price, average sales price, and average manufacturer’s price.
 

Suggestion for the rheumatologist

This leads to a suggestion to rheumatologists trying to get an exemption from mandated white bagging. If a patient has already had white-bagged medication, have them obtain a receipt from the PBM for their charges to the plan for the medication. If the patient has not gone through the white bagging yet, the PBM should be able to tell the plan the cost of the white-bagged medication and the cost to the patient. Compare those costs with what would be charged through buy and bill, and if it is less, present that evidence to the employer and remind them of their fiduciary responsibility to their employees.

Granted, this process may take more effort than filling out a prior authorization, but getting the white-bag exemption will help the patient, the employer, and the rheumatologist in the long run. A win-win-win!

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

When we talk about advocacy in rheumatology, we think about our patients and how we can help them gain access to the best care. Whether it’s filling out a prior authorization form or testifying before Congress, it is an action we perform that ultimately helps our patients achieve that care. We are familiar with many of the obstacles that block the path to the best care and interfere with our patient-doctor relationships. Much work has been done to pass legislation in the states to mitigate some of those obstacles, such as unreasonable step therapy regimens, nonmedical switching, and copay accumulators.

CSRO

Unfortunately, that state legislation does not cover patients who work for companies that are self-insured. Self-insured employers, which account for about 60% of America’s workers, directly pay for the health benefits offered to employees instead of buying “fully funded” insurance plans. Most of those self-funded plans fall under “ERISA” protections and are regulated by the federal Department of Labor. ERISA stands for Employee Retirement Income Security Act. The law, which was enacted in 1974, also covers employee health plans. These plans must act as a fiduciary, meaning they must look after the well-being of the employees, including their finances and those of the plan itself.

The Coalition of State Rheumatology Organizations (CSRO) has learned of a number of issues involving patients who work for self-funded companies, regulated by ERISA. One such issue is that of mandated “white bagging.” White bagging has been discussed in “Rheum for Action” in the past. There is a long list of white-bagging problems, including dosing issues, lack of “chain of custody” with the medications, delays in treatment, mandatory up-front payments by the patient, and wastage of unused medication. However, there is another issue that is of concern not only to the employees (our patients) but to the employer as well.

Employers’ fiduciary responsibility

As mentioned earlier, the employers who self insure are responsible for the financial well-being of their employee and the plan itself. Therefore, if certain practices are mandated within the health plan that harm our patients or the plan financially, the company could be in violation of their fiduciary duty. Rheumatologists have said that buying and billing the drug to the medical side of the health plan in many cases costs much less than white bagging. Conceivably, that could result in breach of an employer’s fiduciary duty to their employee.

Evidence for violating fiduciary duty

CSRO recently received redacted receipts comparing costs between the two models of drug acquisition for a patient in an ERISA plan. White bagging for the patient occurred in 2021, and in 2022 an exemption was granted for the rheumatologist to buy and bill the administered medication. Unfortunately, the exemption to buy and bill in 2023 was denied and continues to be denied (as of this writing). A comparison of the receipts revealed the company was charged over $40,000 for the white-bagged medication in 2021, and the patient’s cost share for that year was $525. Under the traditional buy-and-bill acquisition model in 2022, the company was charged around $12,000 for the medication and the patient’s cost share was $30. There is a clear difference in cost to the employee and plan between the two acquisition models.

Is this major company unknowingly violating its fiduciary duty by mandating white bagging as per their contract with one of the three big pharmacy benefit managers (PBMs)? If so, how does something like this happen with a large national company that has ERISA attorneys looking over the contracts with the PBMs?
 

Why is white bagging mandated?

Often, white bagging is mandated because the cost of infusions in a hospital outpatient facility can be very high. Nationally, it has been shown that hospitals charge four to five times the cost they paid for the drug, and the 100 most expensive hospitals charge 10-18 times the cost of their drugs. With these up-charges, white bagging could easily be a lower cost for employee and company. But across-the-board mandating of white bagging ignores that physician office–based infusions may offer a much lower cost to employees and the employer.

Another reason large and small self-funded companies may unknowingly sign contracts that are often more profitable to the PBM than to the employer is that the employer pharmacy benefit consultants are paid handsomely by the big PBMs and have been known to “rig” the contract in favor of the PBM, according to Paul Holmes, an ERISA attorney with a focus in pharmacy health plan contracts. Clearly, the PBM profits more with white-bagged medicines billed through the pharmacy (PBM) side of insurance as opposed to buy-and-bill medications that are billed on the medical side of insurance. So mandated white bagging is often included in these contracts, ignoring the lower cost in an infusion suite at a physician’s office.
 

Suggestions for employers

Employers and employees should be able to obtain the costs of mandated, white-bagged drugs from their PBMs because the Consolidated Appropriations Act of 2021 (CAA) mandates that group health plans ensure access to cost data. The employer should also have access to their consultant’s compensation from the PBM as Section 202 in the CAA states that employer benefit consultants must “disclose actual and anticipated cash and non-cash compensation they expect to earn in connection with the sale, renewal, and extension of group health insurance.”

It would be wise for all self-insured companies to use this section to see how much their consultants are being influenced by the company that they are recommending. Additionally, the companies should consider hiring ERISA attorneys that understand not only the legalese of the contract with a PBM but also the pharmacy lingo, such as the difference between maximum allowable cost, average wholesale price, average sales price, and average manufacturer’s price.
 

Suggestion for the rheumatologist

This leads to a suggestion to rheumatologists trying to get an exemption from mandated white bagging. If a patient has already had white-bagged medication, have them obtain a receipt from the PBM for their charges to the plan for the medication. If the patient has not gone through the white bagging yet, the PBM should be able to tell the plan the cost of the white-bagged medication and the cost to the patient. Compare those costs with what would be charged through buy and bill, and if it is less, present that evidence to the employer and remind them of their fiduciary responsibility to their employees.

Granted, this process may take more effort than filling out a prior authorization, but getting the white-bag exemption will help the patient, the employer, and the rheumatologist in the long run. A win-win-win!

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

When we talk about advocacy in rheumatology, we think about our patients and how we can help them gain access to the best care. Whether it’s filling out a prior authorization form or testifying before Congress, it is an action we perform that ultimately helps our patients achieve that care. We are familiar with many of the obstacles that block the path to the best care and interfere with our patient-doctor relationships. Much work has been done to pass legislation in the states to mitigate some of those obstacles, such as unreasonable step therapy regimens, nonmedical switching, and copay accumulators.

CSRO

Unfortunately, that state legislation does not cover patients who work for companies that are self-insured. Self-insured employers, which account for about 60% of America’s workers, directly pay for the health benefits offered to employees instead of buying “fully funded” insurance plans. Most of those self-funded plans fall under “ERISA” protections and are regulated by the federal Department of Labor. ERISA stands for Employee Retirement Income Security Act. The law, which was enacted in 1974, also covers employee health plans. These plans must act as a fiduciary, meaning they must look after the well-being of the employees, including their finances and those of the plan itself.

The Coalition of State Rheumatology Organizations (CSRO) has learned of a number of issues involving patients who work for self-funded companies, regulated by ERISA. One such issue is that of mandated “white bagging.” White bagging has been discussed in “Rheum for Action” in the past. There is a long list of white-bagging problems, including dosing issues, lack of “chain of custody” with the medications, delays in treatment, mandatory up-front payments by the patient, and wastage of unused medication. However, there is another issue that is of concern not only to the employees (our patients) but to the employer as well.

Employers’ fiduciary responsibility

As mentioned earlier, the employers who self insure are responsible for the financial well-being of their employee and the plan itself. Therefore, if certain practices are mandated within the health plan that harm our patients or the plan financially, the company could be in violation of their fiduciary duty. Rheumatologists have said that buying and billing the drug to the medical side of the health plan in many cases costs much less than white bagging. Conceivably, that could result in breach of an employer’s fiduciary duty to their employee.

Evidence for violating fiduciary duty

CSRO recently received redacted receipts comparing costs between the two models of drug acquisition for a patient in an ERISA plan. White bagging for the patient occurred in 2021, and in 2022 an exemption was granted for the rheumatologist to buy and bill the administered medication. Unfortunately, the exemption to buy and bill in 2023 was denied and continues to be denied (as of this writing). A comparison of the receipts revealed the company was charged over $40,000 for the white-bagged medication in 2021, and the patient’s cost share for that year was $525. Under the traditional buy-and-bill acquisition model in 2022, the company was charged around $12,000 for the medication and the patient’s cost share was $30. There is a clear difference in cost to the employee and plan between the two acquisition models.

Is this major company unknowingly violating its fiduciary duty by mandating white bagging as per their contract with one of the three big pharmacy benefit managers (PBMs)? If so, how does something like this happen with a large national company that has ERISA attorneys looking over the contracts with the PBMs?
 

Why is white bagging mandated?

Often, white bagging is mandated because the cost of infusions in a hospital outpatient facility can be very high. Nationally, it has been shown that hospitals charge four to five times the cost they paid for the drug, and the 100 most expensive hospitals charge 10-18 times the cost of their drugs. With these up-charges, white bagging could easily be a lower cost for employee and company. But across-the-board mandating of white bagging ignores that physician office–based infusions may offer a much lower cost to employees and the employer.

Another reason large and small self-funded companies may unknowingly sign contracts that are often more profitable to the PBM than to the employer is that the employer pharmacy benefit consultants are paid handsomely by the big PBMs and have been known to “rig” the contract in favor of the PBM, according to Paul Holmes, an ERISA attorney with a focus in pharmacy health plan contracts. Clearly, the PBM profits more with white-bagged medicines billed through the pharmacy (PBM) side of insurance as opposed to buy-and-bill medications that are billed on the medical side of insurance. So mandated white bagging is often included in these contracts, ignoring the lower cost in an infusion suite at a physician’s office.
 

Suggestions for employers

Employers and employees should be able to obtain the costs of mandated, white-bagged drugs from their PBMs because the Consolidated Appropriations Act of 2021 (CAA) mandates that group health plans ensure access to cost data. The employer should also have access to their consultant’s compensation from the PBM as Section 202 in the CAA states that employer benefit consultants must “disclose actual and anticipated cash and non-cash compensation they expect to earn in connection with the sale, renewal, and extension of group health insurance.”

It would be wise for all self-insured companies to use this section to see how much their consultants are being influenced by the company that they are recommending. Additionally, the companies should consider hiring ERISA attorneys that understand not only the legalese of the contract with a PBM but also the pharmacy lingo, such as the difference between maximum allowable cost, average wholesale price, average sales price, and average manufacturer’s price.
 

Suggestion for the rheumatologist

This leads to a suggestion to rheumatologists trying to get an exemption from mandated white bagging. If a patient has already had white-bagged medication, have them obtain a receipt from the PBM for their charges to the plan for the medication. If the patient has not gone through the white bagging yet, the PBM should be able to tell the plan the cost of the white-bagged medication and the cost to the patient. Compare those costs with what would be charged through buy and bill, and if it is less, present that evidence to the employer and remind them of their fiduciary responsibility to their employees.

Granted, this process may take more effort than filling out a prior authorization, but getting the white-bag exemption will help the patient, the employer, and the rheumatologist in the long run. A win-win-win!

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

If you are reading this, you probably know what a PBM is or at least know what the acronym stands for (pharmacy benefit manager). But don’t be surprised if many people, even physicians, still have never heard the term or don’t know (or really care) what it stands for. This past weekend, I saw how important even a little bit of education on this seemingly boring topic can create passionate advocates in less than an hour.

CSRO

On March 10, the Coalition of State Rheumatology Organizations had its Fellows Conference on real-life topics such as evaluating a contract, malpractice troubleshooting, getting out of debt and creating wealth, and learning about the latest coding issues, among others. We had a record-breaking number of fellows in attendance this year. I gave a presentation on formulary construction (list of drugs that insurance will cover), what tools are used to keep the formulary profitable, and what are the potential consequences for patients with the use of these tools, such as step therapy and nonmedical switching. Remember that if you have a condition requiring an expensive drug that is not covered on the formulary, you will not have access to it unless it is given to you for free by some type of assistance program, or you happen to be very wealthy.

It was the first time I gave this talk at our Fellows Conference, and I realized fairly quickly that a decent proportion of the audience did not know what PBM stood for, much less the power that PBMs have in setting up the list of expensive drugs that they will pay for. I wasn’t so surprised by how little they knew about the particulars of this topic – for example, that lower-priced medications are often shunned by PBMs because they are not as profitable for the PBM as higher-priced drugs. However, I was very pleasantly surprised at the number of fellows who came to me after my talk with almost as much passion as I have for this topic. Many asked how they could get involved and what they could do right now to support advocacy for their patients. It all seemed to fall in place for them as they began telling me stories of the problems they had in getting medications for their patients – adults and kids alike.

The “meme” on the street is that drug pricing, patient access, and the drug supply channel is “much too complex” for the non-economist to understand. That was not the case at the Fellows Conference. It started off with me moving back and forth across the stage explaining how the system is run by entities whose fiduciary responsibility is to their shareholders, not our patients. I explained the fierce competition, the bidding process, the “rebate equation,” and many stories of egregious policies and behaviors by an oligopoly of health insurers and their powerful PBMs. I repeated over and over that “If you make an expensive drug that is not on the formulary, no one will take to your drug, unless you give it away for free.”

It became clear to the room that the competition among expensive drug makers to get preferred status on the formulary is fierce. I explained how to win that coveted spot on the formulary by legally kicking back the most money, in the form of rebates and fees, to the PBM. Unfortunately, these rebates and fees are generally a percentage of the list price, so often it is the highest-priced drug that wins the coveted spot. I explained that patients get no benefit from the money kicked back to the PBM, and in fact, because their coinsurance is often based on the list price of the drug, patients’ cost share will go up when PBMs pick the drug with the highest price. I gave the example of a major PBM placing a $10,000 brand-name drug on the formulary and excluding the $400 generic version of the same drug. I told them that PBMs call these the “lowest cost” drugs – for them. This made them angry. I also explained to the fellows that these kickbacks are legal because PBMs have “safe harbor” from the antikickback statute. And yes, that made them even angrier. The more I spoke about the harm done to patients both physically and monetarily by utilization management tools such as step therapy and nonmedical switching, the angrier and more passionate they became.

What started as a room full of fellows wondering whether they really were interested in a talk about PBMs and formulary construction turned, in less than an hour, into a room filled with passion and fury: Rheumatology fellows ready to go and fight for their patients. It’s not as complicated as everyone wants you to believe. In that short time, fellows who had walked into that conference hall, not knowing what to expect from me, walked out with a new attitude and passion, hungry for the next step they could take to advocate for their patients. My slogan on Twitter has always been that I will continue to educate and advocate as long as my passion stays ahead of my cynicism. My passion certainly got a boost as I watched the fellows in the conference hall turn into “Rheums for Action” before my eyes.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

If you are reading this, you probably know what a PBM is or at least know what the acronym stands for (pharmacy benefit manager). But don’t be surprised if many people, even physicians, still have never heard the term or don’t know (or really care) what it stands for. This past weekend, I saw how important even a little bit of education on this seemingly boring topic can create passionate advocates in less than an hour.

CSRO

On March 10, the Coalition of State Rheumatology Organizations had its Fellows Conference on real-life topics such as evaluating a contract, malpractice troubleshooting, getting out of debt and creating wealth, and learning about the latest coding issues, among others. We had a record-breaking number of fellows in attendance this year. I gave a presentation on formulary construction (list of drugs that insurance will cover), what tools are used to keep the formulary profitable, and what are the potential consequences for patients with the use of these tools, such as step therapy and nonmedical switching. Remember that if you have a condition requiring an expensive drug that is not covered on the formulary, you will not have access to it unless it is given to you for free by some type of assistance program, or you happen to be very wealthy.

It was the first time I gave this talk at our Fellows Conference, and I realized fairly quickly that a decent proportion of the audience did not know what PBM stood for, much less the power that PBMs have in setting up the list of expensive drugs that they will pay for. I wasn’t so surprised by how little they knew about the particulars of this topic – for example, that lower-priced medications are often shunned by PBMs because they are not as profitable for the PBM as higher-priced drugs. However, I was very pleasantly surprised at the number of fellows who came to me after my talk with almost as much passion as I have for this topic. Many asked how they could get involved and what they could do right now to support advocacy for their patients. It all seemed to fall in place for them as they began telling me stories of the problems they had in getting medications for their patients – adults and kids alike.

The “meme” on the street is that drug pricing, patient access, and the drug supply channel is “much too complex” for the non-economist to understand. That was not the case at the Fellows Conference. It started off with me moving back and forth across the stage explaining how the system is run by entities whose fiduciary responsibility is to their shareholders, not our patients. I explained the fierce competition, the bidding process, the “rebate equation,” and many stories of egregious policies and behaviors by an oligopoly of health insurers and their powerful PBMs. I repeated over and over that “If you make an expensive drug that is not on the formulary, no one will take to your drug, unless you give it away for free.”

It became clear to the room that the competition among expensive drug makers to get preferred status on the formulary is fierce. I explained how to win that coveted spot on the formulary by legally kicking back the most money, in the form of rebates and fees, to the PBM. Unfortunately, these rebates and fees are generally a percentage of the list price, so often it is the highest-priced drug that wins the coveted spot. I explained that patients get no benefit from the money kicked back to the PBM, and in fact, because their coinsurance is often based on the list price of the drug, patients’ cost share will go up when PBMs pick the drug with the highest price. I gave the example of a major PBM placing a $10,000 brand-name drug on the formulary and excluding the $400 generic version of the same drug. I told them that PBMs call these the “lowest cost” drugs – for them. This made them angry. I also explained to the fellows that these kickbacks are legal because PBMs have “safe harbor” from the antikickback statute. And yes, that made them even angrier. The more I spoke about the harm done to patients both physically and monetarily by utilization management tools such as step therapy and nonmedical switching, the angrier and more passionate they became.

What started as a room full of fellows wondering whether they really were interested in a talk about PBMs and formulary construction turned, in less than an hour, into a room filled with passion and fury: Rheumatology fellows ready to go and fight for their patients. It’s not as complicated as everyone wants you to believe. In that short time, fellows who had walked into that conference hall, not knowing what to expect from me, walked out with a new attitude and passion, hungry for the next step they could take to advocate for their patients. My slogan on Twitter has always been that I will continue to educate and advocate as long as my passion stays ahead of my cynicism. My passion certainly got a boost as I watched the fellows in the conference hall turn into “Rheums for Action” before my eyes.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

If you are reading this, you probably know what a PBM is or at least know what the acronym stands for (pharmacy benefit manager). But don’t be surprised if many people, even physicians, still have never heard the term or don’t know (or really care) what it stands for. This past weekend, I saw how important even a little bit of education on this seemingly boring topic can create passionate advocates in less than an hour.

CSRO

On March 10, the Coalition of State Rheumatology Organizations had its Fellows Conference on real-life topics such as evaluating a contract, malpractice troubleshooting, getting out of debt and creating wealth, and learning about the latest coding issues, among others. We had a record-breaking number of fellows in attendance this year. I gave a presentation on formulary construction (list of drugs that insurance will cover), what tools are used to keep the formulary profitable, and what are the potential consequences for patients with the use of these tools, such as step therapy and nonmedical switching. Remember that if you have a condition requiring an expensive drug that is not covered on the formulary, you will not have access to it unless it is given to you for free by some type of assistance program, or you happen to be very wealthy.

It was the first time I gave this talk at our Fellows Conference, and I realized fairly quickly that a decent proportion of the audience did not know what PBM stood for, much less the power that PBMs have in setting up the list of expensive drugs that they will pay for. I wasn’t so surprised by how little they knew about the particulars of this topic – for example, that lower-priced medications are often shunned by PBMs because they are not as profitable for the PBM as higher-priced drugs. However, I was very pleasantly surprised at the number of fellows who came to me after my talk with almost as much passion as I have for this topic. Many asked how they could get involved and what they could do right now to support advocacy for their patients. It all seemed to fall in place for them as they began telling me stories of the problems they had in getting medications for their patients – adults and kids alike.

The “meme” on the street is that drug pricing, patient access, and the drug supply channel is “much too complex” for the non-economist to understand. That was not the case at the Fellows Conference. It started off with me moving back and forth across the stage explaining how the system is run by entities whose fiduciary responsibility is to their shareholders, not our patients. I explained the fierce competition, the bidding process, the “rebate equation,” and many stories of egregious policies and behaviors by an oligopoly of health insurers and their powerful PBMs. I repeated over and over that “If you make an expensive drug that is not on the formulary, no one will take to your drug, unless you give it away for free.”

It became clear to the room that the competition among expensive drug makers to get preferred status on the formulary is fierce. I explained how to win that coveted spot on the formulary by legally kicking back the most money, in the form of rebates and fees, to the PBM. Unfortunately, these rebates and fees are generally a percentage of the list price, so often it is the highest-priced drug that wins the coveted spot. I explained that patients get no benefit from the money kicked back to the PBM, and in fact, because their coinsurance is often based on the list price of the drug, patients’ cost share will go up when PBMs pick the drug with the highest price. I gave the example of a major PBM placing a $10,000 brand-name drug on the formulary and excluding the $400 generic version of the same drug. I told them that PBMs call these the “lowest cost” drugs – for them. This made them angry. I also explained to the fellows that these kickbacks are legal because PBMs have “safe harbor” from the antikickback statute. And yes, that made them even angrier. The more I spoke about the harm done to patients both physically and monetarily by utilization management tools such as step therapy and nonmedical switching, the angrier and more passionate they became.

What started as a room full of fellows wondering whether they really were interested in a talk about PBMs and formulary construction turned, in less than an hour, into a room filled with passion and fury: Rheumatology fellows ready to go and fight for their patients. It’s not as complicated as everyone wants you to believe. In that short time, fellows who had walked into that conference hall, not knowing what to expect from me, walked out with a new attitude and passion, hungry for the next step they could take to advocate for their patients. My slogan on Twitter has always been that I will continue to educate and advocate as long as my passion stays ahead of my cynicism. My passion certainly got a boost as I watched the fellows in the conference hall turn into “Rheums for Action” before my eyes.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Some of our worst decisions seemed like really good ideas at the time. We wouldn’t make them otherwise; but often we fall into the unintended consequence of “the cure being worse than the poison.” We have seen this when government is trying to fix a problem, often an emotionally charged problem, without considering the long-term consequences of the “fix.” We have seen the unintended consequences of certain health care policies and programs lead to abuse and negative downstream effects on the same population that they were intended to protect.

It has been postulated that unintended consequences fall into a framework that’s “based upon level of knowledge and the scope for avoidance.” Essentially, that means these consequences fall into one of four categories: knowable and avoidable, knowable and unavoidable, unknowable and avoidable, and unknowable and unavoidable.

What category do the following policies fall into?
 

Pharmacy benefit managers’ safe harbor from the Anti-Kickback Statute

Let’s start with the “safe harbor” from the Anti-Kickback Statute (AKS) for payments from drug companies to health insurance companies and pharmacy benefit managers (PBMs). The AKS was created in 1972 and its “main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions.” During the 1990s, a number of safe harbor provisions under the AKS were instituted for certain payments to health insurance companies, PBMs, and other providers. The thinking was that these payments needed a safe harbor because, although they might meet the statutory definition of “kickbacks,” they were beneficial because they would reduce the cost of care and, more specifically, the prices of drugs.

While well-intentioned, those safe harbors now protect a system of such perverse incentives that patients are whipsawed back and forth onto drugs that are the most profitable for the PBMs, who create the annual list of insurance covered drugs (i.e., the formulary). It is clear now that protected kickbacks ($$), in the form of rebates and fees paid by pharmaceutical manufacturers to PBMs, determine what drugs will be on the formulary. PBMs then use utilization management tools such as step therapy to force patients to take those drugs first. Consequently, safe harbor protection from the AKS allows manufacturers to buy market share at the expense of patient’s health. Because these protected kickbacks are based on a percentage of the list price of the drugs, PBMs profit more from higher priced drugs, which PBMs call the lowest cost medications (for them, that is). These bids from various manufacturers can change over the course of a year, allowing PBMs to change formulary coverage (even mid-year) and nonmedically switch stable patients to the drug that is the most profitable. Much of this happens as a result of the unintended consequence of this particular safe harbor from the AKS. Ironically, the safe harbor has helped to create the very behavior that the law was supposed to prevent and has harmed the patients it was supposed to protect. Health care decisions are being corrupted by the influence of profits allowed by safe harbor from the AKS.
 

340B drug program lacks oversight

Helping hospitals pay for care of the indigent: What could go wrong with that? The 340B Drug Pricing Program was created in 1992 to help low-income patients have better access to outpatient medications. The program requires drug companies to offer deep discounts to safety-net providers and qualified “disproportionate share hospitals,” which have a minimum percentage threshold of Medicare and Medicaid patients. The idea was that these qualified entities would pass these savings through to their low-income patients who needed the medications. Sounds like a great idea!

Apparently, there is a lot of money to be made under the 340B program because what started in 1992 with 90 covered entities had expanded by 2017 to more than 12,000 covered entities. The program became a profit center in part because reimbursement for 340B-acquired drugs far exceeds the acquisition costs. Over the years, in order to increase profits, qualified entities, such as disproportionate share hospitals, added for-profit contracted outpatient pharmacies, significantly increasing the amount of 340B drugs dispensed to commercial patients. From 2010 to 2020, the number of contract pharmacy arrangements increased from 2,000 to over 100,000, massively increasing profits for the qualified hospitals and their for-profit contracted pharmacies, which included a number of Fortune 25 companies.

Unfortunately, there is no oversight of 340B programs, and there are no requirements that the 340B drug profits be used for charitable care. In fact, nearly 10 years ago, two experts stated in Health Affairs that, “our findings support the criticism that the 340B program is being converted from one that serves vulnerable patient populations to one that enriches hospitals and their affiliated clinics.” In spite of the immense profits generated at 340B hospitals, an analysis by Avalere Health revealed that “65 percent of 340B hospitals provide less charity care than the national average for all short-term acute care hospitals, including for-profit hospitals.”

I have seen this dynamic at work in my own community in south Louisiana. There is a major expanding 340B hospital system that refuses Medicaid patients into its clinics once the hospital has reached its minimum disproportionate share of Medicaid patients. Our community has many young female African American patients with lupus, many of whom are covered by Medicaid. Even though this 340B hospital system has rheumatology fellows, it closes its rheumatology clinic doors to patients with lupus who have Medicaid as soon as it has reached its 11.75% of Medicaid patients. Clearly, this is an abuse of a program instituted specifically to take care of those in need – and here in our community, it creates inequitable access to rheumatologic care for patients with lupus.

The statute that created 340B specifically listed certain nonhospital providers who need – and should continue to receive – access to 340B discounts, such as Federally Qualified Health Centers and others. There are many deserving safety net providers and special disease clinics that are taking care of the truly needy and deserve to get the 340B highly discounted drug pricing. However, many so-called nonprofit hospital systems are spreading into wealthy neighborhoods with contracted pharmacies making large profits without caring for those in need. Five years ago, the U.S. Government Accountability Office stated that more oversight of the 340B program was needed, but that still hasn’t happened. The combination of vague statutory language and a lack of oversight has led to unintended consequences of fraud and abuse of the system, with indigent patients not realizing the benefit of the steep discounts, being sued when they can’t pay their bills, and even turned away from clinics when the qualified hospital reaches it mandated minimum of Medicaid patients.
 

Knowable and avoidable?

Should it have been known that these abuses would result from these policies and programs? And if so, could guardrails have been put in place from the start to avoid these abuses? Maybe the answers to these questions are irrelevant: All we can do now is fix what is not working, which will require changes and oversight to ensure that the safe harbor policy and 340B drug discount program are achieving the desired ends. At this point, unfortunately, it is clear that they’re not. In fact, it looks like they have enabled “profits over patients” all the way.

As recently stated by Dr. Megan Ranney of Brown University: “In this country, we continually forget that the profit motive is not sufficient for the public’s health.” Yes, hindsight is 20/20. But now we need to take off our blinders, see what is happening, and act to finally put “patients over profits.”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Some of our worst decisions seemed like really good ideas at the time. We wouldn’t make them otherwise; but often we fall into the unintended consequence of “the cure being worse than the poison.” We have seen this when government is trying to fix a problem, often an emotionally charged problem, without considering the long-term consequences of the “fix.” We have seen the unintended consequences of certain health care policies and programs lead to abuse and negative downstream effects on the same population that they were intended to protect.

It has been postulated that unintended consequences fall into a framework that’s “based upon level of knowledge and the scope for avoidance.” Essentially, that means these consequences fall into one of four categories: knowable and avoidable, knowable and unavoidable, unknowable and avoidable, and unknowable and unavoidable.

What category do the following policies fall into?
 

Pharmacy benefit managers’ safe harbor from the Anti-Kickback Statute

Let’s start with the “safe harbor” from the Anti-Kickback Statute (AKS) for payments from drug companies to health insurance companies and pharmacy benefit managers (PBMs). The AKS was created in 1972 and its “main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions.” During the 1990s, a number of safe harbor provisions under the AKS were instituted for certain payments to health insurance companies, PBMs, and other providers. The thinking was that these payments needed a safe harbor because, although they might meet the statutory definition of “kickbacks,” they were beneficial because they would reduce the cost of care and, more specifically, the prices of drugs.

While well-intentioned, those safe harbors now protect a system of such perverse incentives that patients are whipsawed back and forth onto drugs that are the most profitable for the PBMs, who create the annual list of insurance covered drugs (i.e., the formulary). It is clear now that protected kickbacks ($$), in the form of rebates and fees paid by pharmaceutical manufacturers to PBMs, determine what drugs will be on the formulary. PBMs then use utilization management tools such as step therapy to force patients to take those drugs first. Consequently, safe harbor protection from the AKS allows manufacturers to buy market share at the expense of patient’s health. Because these protected kickbacks are based on a percentage of the list price of the drugs, PBMs profit more from higher priced drugs, which PBMs call the lowest cost medications (for them, that is). These bids from various manufacturers can change over the course of a year, allowing PBMs to change formulary coverage (even mid-year) and nonmedically switch stable patients to the drug that is the most profitable. Much of this happens as a result of the unintended consequence of this particular safe harbor from the AKS. Ironically, the safe harbor has helped to create the very behavior that the law was supposed to prevent and has harmed the patients it was supposed to protect. Health care decisions are being corrupted by the influence of profits allowed by safe harbor from the AKS.
 

340B drug program lacks oversight

Helping hospitals pay for care of the indigent: What could go wrong with that? The 340B Drug Pricing Program was created in 1992 to help low-income patients have better access to outpatient medications. The program requires drug companies to offer deep discounts to safety-net providers and qualified “disproportionate share hospitals,” which have a minimum percentage threshold of Medicare and Medicaid patients. The idea was that these qualified entities would pass these savings through to their low-income patients who needed the medications. Sounds like a great idea!

Apparently, there is a lot of money to be made under the 340B program because what started in 1992 with 90 covered entities had expanded by 2017 to more than 12,000 covered entities. The program became a profit center in part because reimbursement for 340B-acquired drugs far exceeds the acquisition costs. Over the years, in order to increase profits, qualified entities, such as disproportionate share hospitals, added for-profit contracted outpatient pharmacies, significantly increasing the amount of 340B drugs dispensed to commercial patients. From 2010 to 2020, the number of contract pharmacy arrangements increased from 2,000 to over 100,000, massively increasing profits for the qualified hospitals and their for-profit contracted pharmacies, which included a number of Fortune 25 companies.

Unfortunately, there is no oversight of 340B programs, and there are no requirements that the 340B drug profits be used for charitable care. In fact, nearly 10 years ago, two experts stated in Health Affairs that, “our findings support the criticism that the 340B program is being converted from one that serves vulnerable patient populations to one that enriches hospitals and their affiliated clinics.” In spite of the immense profits generated at 340B hospitals, an analysis by Avalere Health revealed that “65 percent of 340B hospitals provide less charity care than the national average for all short-term acute care hospitals, including for-profit hospitals.”

I have seen this dynamic at work in my own community in south Louisiana. There is a major expanding 340B hospital system that refuses Medicaid patients into its clinics once the hospital has reached its minimum disproportionate share of Medicaid patients. Our community has many young female African American patients with lupus, many of whom are covered by Medicaid. Even though this 340B hospital system has rheumatology fellows, it closes its rheumatology clinic doors to patients with lupus who have Medicaid as soon as it has reached its 11.75% of Medicaid patients. Clearly, this is an abuse of a program instituted specifically to take care of those in need – and here in our community, it creates inequitable access to rheumatologic care for patients with lupus.

The statute that created 340B specifically listed certain nonhospital providers who need – and should continue to receive – access to 340B discounts, such as Federally Qualified Health Centers and others. There are many deserving safety net providers and special disease clinics that are taking care of the truly needy and deserve to get the 340B highly discounted drug pricing. However, many so-called nonprofit hospital systems are spreading into wealthy neighborhoods with contracted pharmacies making large profits without caring for those in need. Five years ago, the U.S. Government Accountability Office stated that more oversight of the 340B program was needed, but that still hasn’t happened. The combination of vague statutory language and a lack of oversight has led to unintended consequences of fraud and abuse of the system, with indigent patients not realizing the benefit of the steep discounts, being sued when they can’t pay their bills, and even turned away from clinics when the qualified hospital reaches it mandated minimum of Medicaid patients.
 

Knowable and avoidable?

Should it have been known that these abuses would result from these policies and programs? And if so, could guardrails have been put in place from the start to avoid these abuses? Maybe the answers to these questions are irrelevant: All we can do now is fix what is not working, which will require changes and oversight to ensure that the safe harbor policy and 340B drug discount program are achieving the desired ends. At this point, unfortunately, it is clear that they’re not. In fact, it looks like they have enabled “profits over patients” all the way.

As recently stated by Dr. Megan Ranney of Brown University: “In this country, we continually forget that the profit motive is not sufficient for the public’s health.” Yes, hindsight is 20/20. But now we need to take off our blinders, see what is happening, and act to finally put “patients over profits.”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Some of our worst decisions seemed like really good ideas at the time. We wouldn’t make them otherwise; but often we fall into the unintended consequence of “the cure being worse than the poison.” We have seen this when government is trying to fix a problem, often an emotionally charged problem, without considering the long-term consequences of the “fix.” We have seen the unintended consequences of certain health care policies and programs lead to abuse and negative downstream effects on the same population that they were intended to protect.

It has been postulated that unintended consequences fall into a framework that’s “based upon level of knowledge and the scope for avoidance.” Essentially, that means these consequences fall into one of four categories: knowable and avoidable, knowable and unavoidable, unknowable and avoidable, and unknowable and unavoidable.

What category do the following policies fall into?
 

Pharmacy benefit managers’ safe harbor from the Anti-Kickback Statute

Let’s start with the “safe harbor” from the Anti-Kickback Statute (AKS) for payments from drug companies to health insurance companies and pharmacy benefit managers (PBMs). The AKS was created in 1972 and its “main purpose is to protect patients and the federal health care programs from fraud and abuse by curtailing the corrupting influence of money on health care decisions.” During the 1990s, a number of safe harbor provisions under the AKS were instituted for certain payments to health insurance companies, PBMs, and other providers. The thinking was that these payments needed a safe harbor because, although they might meet the statutory definition of “kickbacks,” they were beneficial because they would reduce the cost of care and, more specifically, the prices of drugs.

While well-intentioned, those safe harbors now protect a system of such perverse incentives that patients are whipsawed back and forth onto drugs that are the most profitable for the PBMs, who create the annual list of insurance covered drugs (i.e., the formulary). It is clear now that protected kickbacks ($$), in the form of rebates and fees paid by pharmaceutical manufacturers to PBMs, determine what drugs will be on the formulary. PBMs then use utilization management tools such as step therapy to force patients to take those drugs first. Consequently, safe harbor protection from the AKS allows manufacturers to buy market share at the expense of patient’s health. Because these protected kickbacks are based on a percentage of the list price of the drugs, PBMs profit more from higher priced drugs, which PBMs call the lowest cost medications (for them, that is). These bids from various manufacturers can change over the course of a year, allowing PBMs to change formulary coverage (even mid-year) and nonmedically switch stable patients to the drug that is the most profitable. Much of this happens as a result of the unintended consequence of this particular safe harbor from the AKS. Ironically, the safe harbor has helped to create the very behavior that the law was supposed to prevent and has harmed the patients it was supposed to protect. Health care decisions are being corrupted by the influence of profits allowed by safe harbor from the AKS.
 

340B drug program lacks oversight

Helping hospitals pay for care of the indigent: What could go wrong with that? The 340B Drug Pricing Program was created in 1992 to help low-income patients have better access to outpatient medications. The program requires drug companies to offer deep discounts to safety-net providers and qualified “disproportionate share hospitals,” which have a minimum percentage threshold of Medicare and Medicaid patients. The idea was that these qualified entities would pass these savings through to their low-income patients who needed the medications. Sounds like a great idea!

Apparently, there is a lot of money to be made under the 340B program because what started in 1992 with 90 covered entities had expanded by 2017 to more than 12,000 covered entities. The program became a profit center in part because reimbursement for 340B-acquired drugs far exceeds the acquisition costs. Over the years, in order to increase profits, qualified entities, such as disproportionate share hospitals, added for-profit contracted outpatient pharmacies, significantly increasing the amount of 340B drugs dispensed to commercial patients. From 2010 to 2020, the number of contract pharmacy arrangements increased from 2,000 to over 100,000, massively increasing profits for the qualified hospitals and their for-profit contracted pharmacies, which included a number of Fortune 25 companies.

Unfortunately, there is no oversight of 340B programs, and there are no requirements that the 340B drug profits be used for charitable care. In fact, nearly 10 years ago, two experts stated in Health Affairs that, “our findings support the criticism that the 340B program is being converted from one that serves vulnerable patient populations to one that enriches hospitals and their affiliated clinics.” In spite of the immense profits generated at 340B hospitals, an analysis by Avalere Health revealed that “65 percent of 340B hospitals provide less charity care than the national average for all short-term acute care hospitals, including for-profit hospitals.”

I have seen this dynamic at work in my own community in south Louisiana. There is a major expanding 340B hospital system that refuses Medicaid patients into its clinics once the hospital has reached its minimum disproportionate share of Medicaid patients. Our community has many young female African American patients with lupus, many of whom are covered by Medicaid. Even though this 340B hospital system has rheumatology fellows, it closes its rheumatology clinic doors to patients with lupus who have Medicaid as soon as it has reached its 11.75% of Medicaid patients. Clearly, this is an abuse of a program instituted specifically to take care of those in need – and here in our community, it creates inequitable access to rheumatologic care for patients with lupus.

The statute that created 340B specifically listed certain nonhospital providers who need – and should continue to receive – access to 340B discounts, such as Federally Qualified Health Centers and others. There are many deserving safety net providers and special disease clinics that are taking care of the truly needy and deserve to get the 340B highly discounted drug pricing. However, many so-called nonprofit hospital systems are spreading into wealthy neighborhoods with contracted pharmacies making large profits without caring for those in need. Five years ago, the U.S. Government Accountability Office stated that more oversight of the 340B program was needed, but that still hasn’t happened. The combination of vague statutory language and a lack of oversight has led to unintended consequences of fraud and abuse of the system, with indigent patients not realizing the benefit of the steep discounts, being sued when they can’t pay their bills, and even turned away from clinics when the qualified hospital reaches it mandated minimum of Medicaid patients.
 

Knowable and avoidable?

Should it have been known that these abuses would result from these policies and programs? And if so, could guardrails have been put in place from the start to avoid these abuses? Maybe the answers to these questions are irrelevant: All we can do now is fix what is not working, which will require changes and oversight to ensure that the safe harbor policy and 340B drug discount program are achieving the desired ends. At this point, unfortunately, it is clear that they’re not. In fact, it looks like they have enabled “profits over patients” all the way.

As recently stated by Dr. Megan Ranney of Brown University: “In this country, we continually forget that the profit motive is not sufficient for the public’s health.” Yes, hindsight is 20/20. But now we need to take off our blinders, see what is happening, and act to finally put “patients over profits.”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

As we come to a close on 2022, let’s take a look at the celebrations and frustrations of the past year’s health policies so that they may act as a catalyst, encouraging us to engage with our representatives. Some of these policies include actions by major companies that rule our health care system, as well as the regulations and legislation passed (or not passed) by our governmental entities. And of course, we must consider how profits and politics influence these policies and often rule the roost!

Insurance

Once again, we are facing increased nonmedical switching of stable patients to different medications through ever-increasing formulary exclusions and higher tiering of less profitable drugs. There are some reports of patients being whipsawed back and forth yearly between reference infliximab and various biosimilars, depending on which is the most profitable to the health plan at the time. And now it’s not just the copay accumulator or maximizer programs that are abusing patient assistance programs, there are new “alternative funding companies” that are carving out expensive and specialty drugs from coverage of employers’ funded health plans. These alternative funding companies then obtain medications – sometimes from other countries – and other forms of assistance from manufacturers and foundations. There have been reports that they make the patient assign power of attorney to them and even pretend to be the patient to obtain the drug, assistance, and copay cards and then bill the employer for getting the free drug or assistance. This abuse of the system, along with copay maximizers, are causing drug manufacturers to rethink their assistance policies, with middlemen reaping the advantages of the assistance plans and not the truly needy patient.

Legislation and regulation

Substantive progress continues to be made on access issues in the states. A total of 5 states signed step-therapy legislation into law, 3 states have new copay accumulator program bans, 13 states began to debate the issue of white bagging, and 16 states began to consider the next stage of pharmacy benefit manager (PBM) reform with rebate-pass-through legislation.

At the federal level, the Inflation Reduction Act (IRA; H.R. 5376) was enacted in August and, like all major pieces of legislation, there are pros and cons. On the positive side, the legislation reforms Medicare Part D cost-sharing, including – for the first time – the creation of an annual cap on cost-sharing by beneficiaries. That will especially help patients with high, ongoing prescription drug needs. On the negative side, despite its extensive drug-pricing provisions, the IRA did not include any reform of PBM practices. In fact, Congress has delayed implementation of the so-called “rebate rule” for 10 years. That rule would have essentially ended payments from drug companies to PBMs in exchange for formulary placement by removing safe harbor protection from antikickback law for these payments, allowing patients to benefit from these payments.

Finally, the IRA included extensive provisions applicable to drug manufacturers, including a mechanism for Medicare to set prices directly for medications that have been on the market for a certain number of years but are still without a biosimilar or generic. This will apply fully to selected Part B drugs as of 2028. The key for rheumatologists and our patients in the next few years will be to engage with the Centers for Medicare & Medicaid Services as it implements this provision to ensure that rheumatologists are not underwater financially on the acquisition of medications subject to the new pricing mechanism.

With regard to utilization management reform at the federal level, the Ensuring Seniors’ Timely Access to Care Act (H.R. 3173) would reform prior authorization in Medicare Advantage, but after passing in the House on Sept. 14, the bill has slowed down in the Senate. In some part, that may be because of a surprising score from the Congressional Budget Office, which projected that the bill would cost $16 billion. However, this is not insurmountable: The legislation enjoys broad bipartisan support in the Senate, and its sponsors remain committed to enactment before the end of the year. Additionally, the Safe Step Act (S. 464) would reform step therapy practices in employer-based coverage, but that legislation has not passed either chamber of Congress despite bipartisan support and is unlikely to be enacted before the end of this congressional session.

As noted above, PBMs escaped meaningful scrutiny or reform in the IRA, but the Federal Trade Commission took a different approach when it announced earlier in 2022 that it would conduct an investigation into the business practices of several major PBMs. That study is ongoing and, when finished, will likely result in some additional ideas for meaningful legislative reform.

Finally, there’s the frustration of the egregious Medicare Physician Fee Schedule that has decreased physicians’ reimbursement in a time of accelerated inflation in the cost of running a practice. At the same time, Medicare Advantage plans and everyone else in the government-reimbursed health system are getting at least an inflationary raise. This has created an ire among all physicians that we have not seen in quite a while and which we are leveraging into grassroots outreach.

The problems in the Fee Schedule result from a combination of factors, but one overarching issue is the concept of “budget neutrality,” which essentially requires CMS to make up for any new spending over a certain amount by a commensurate reduction across the whole Fee Schedule. This has the effect of turning the Fee Schedule into a fixed pie: If someone’s slice gets bigger, someone else’s slice must get smaller, but the pie itself never gets bigger. To make matters worse, the Medicare Access and CHIP Reauthorization Act of 2015 has not resulted in advancing value-driven care as the Congress had envisioned when it enacted that legislation. The good news is that there is widespread recognition in Congress that a system built on temporary legislative “patches” to avoid deep payment reductions is unsustainable and must be fixed. The Supporting Medicare Providers Act of 2022 (H.R. 8800) that’s currently pending in the House to offset the looming 2023 Fee Schedule cuts also includes a Sense of the Congress, or nonbinding resolution, establishing the need for administrative and legislative actions for long-term, meaningful reform of Medicare physician payment, along three principles: ensuring financial stability and predictability, promoting and rewarding value-based care innovation, and safeguarding timely access to high-quality care by advancing health equity and reducing disparities.

Turning frustration into action

Much of the frustration for those of us who take care of patients is that many actions and policies are based on profits and politics and not on patient care.

It is unfortunate that money plays such an important role in politics. We are all aware of the power of the well-heeled lobbyist and how money can lead to legislation that is more beneficial to one for-profit company versus another in the health care sector. But then there is the party politics of health care legislation. We see examples of great legislation offered by one party being buried because it might be beneficial to the “other side” in the next election, in spite of the fact that both sides agree on the issue. Here is where we must fight our cynicism and remember our patients. Building and maintaining a relationship with our representatives, whether we agree with them are not, is a very important part of advocacy.

As we come off the recent elections, it is important that we acquaint ourselves with our newly elected representatives and reacquaint ourselves with our re-elected officials. Recently, the Coalition of State Rheumatology Organizations had an advocacy day asking rheumatologists to invite their legislator (city, state, or federal) to their office to witness first-hand the practice of rheumatology. The importance of asking your representative to visit your office cannot be overemphasized. First, you get to know the staffer who arranges these visits. Having a good relationship with your representative’s staff is important in maintaining future communications. Having your legislator tour your office, while you share the daily challenges of getting the right medication for patients, is invaluable to their understanding of how the delay in care that utilization management tools such as prior authorizations and step therapy can cause. It is also helpful for you or your office manager to highlight how independent practices are small businesses that must be run efficiently to ensure they can stay open. Building a relationship with and educating your representatives on issues they may not be familiar with will encourage them to use you as a resource in the future.

CSRO has a legislator invitation template, and we can provide talking points if the invitation is accepted. Many state legislative sessions begin in January, so now is the time to get to know your legislator.

Let’s celebrate the wins of 2022 and not let the frustrations with the system diminish our passion – that’s the hard part! Onward to 2023 as “Rheums for Action!”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

As we come to a close on 2022, let’s take a look at the celebrations and frustrations of the past year’s health policies so that they may act as a catalyst, encouraging us to engage with our representatives. Some of these policies include actions by major companies that rule our health care system, as well as the regulations and legislation passed (or not passed) by our governmental entities. And of course, we must consider how profits and politics influence these policies and often rule the roost!

Insurance

Once again, we are facing increased nonmedical switching of stable patients to different medications through ever-increasing formulary exclusions and higher tiering of less profitable drugs. There are some reports of patients being whipsawed back and forth yearly between reference infliximab and various biosimilars, depending on which is the most profitable to the health plan at the time. And now it’s not just the copay accumulator or maximizer programs that are abusing patient assistance programs, there are new “alternative funding companies” that are carving out expensive and specialty drugs from coverage of employers’ funded health plans. These alternative funding companies then obtain medications – sometimes from other countries – and other forms of assistance from manufacturers and foundations. There have been reports that they make the patient assign power of attorney to them and even pretend to be the patient to obtain the drug, assistance, and copay cards and then bill the employer for getting the free drug or assistance. This abuse of the system, along with copay maximizers, are causing drug manufacturers to rethink their assistance policies, with middlemen reaping the advantages of the assistance plans and not the truly needy patient.

Legislation and regulation

Substantive progress continues to be made on access issues in the states. A total of 5 states signed step-therapy legislation into law, 3 states have new copay accumulator program bans, 13 states began to debate the issue of white bagging, and 16 states began to consider the next stage of pharmacy benefit manager (PBM) reform with rebate-pass-through legislation.

At the federal level, the Inflation Reduction Act (IRA; H.R. 5376) was enacted in August and, like all major pieces of legislation, there are pros and cons. On the positive side, the legislation reforms Medicare Part D cost-sharing, including – for the first time – the creation of an annual cap on cost-sharing by beneficiaries. That will especially help patients with high, ongoing prescription drug needs. On the negative side, despite its extensive drug-pricing provisions, the IRA did not include any reform of PBM practices. In fact, Congress has delayed implementation of the so-called “rebate rule” for 10 years. That rule would have essentially ended payments from drug companies to PBMs in exchange for formulary placement by removing safe harbor protection from antikickback law for these payments, allowing patients to benefit from these payments.

Finally, the IRA included extensive provisions applicable to drug manufacturers, including a mechanism for Medicare to set prices directly for medications that have been on the market for a certain number of years but are still without a biosimilar or generic. This will apply fully to selected Part B drugs as of 2028. The key for rheumatologists and our patients in the next few years will be to engage with the Centers for Medicare & Medicaid Services as it implements this provision to ensure that rheumatologists are not underwater financially on the acquisition of medications subject to the new pricing mechanism.

With regard to utilization management reform at the federal level, the Ensuring Seniors’ Timely Access to Care Act (H.R. 3173) would reform prior authorization in Medicare Advantage, but after passing in the House on Sept. 14, the bill has slowed down in the Senate. In some part, that may be because of a surprising score from the Congressional Budget Office, which projected that the bill would cost $16 billion. However, this is not insurmountable: The legislation enjoys broad bipartisan support in the Senate, and its sponsors remain committed to enactment before the end of the year. Additionally, the Safe Step Act (S. 464) would reform step therapy practices in employer-based coverage, but that legislation has not passed either chamber of Congress despite bipartisan support and is unlikely to be enacted before the end of this congressional session.

As noted above, PBMs escaped meaningful scrutiny or reform in the IRA, but the Federal Trade Commission took a different approach when it announced earlier in 2022 that it would conduct an investigation into the business practices of several major PBMs. That study is ongoing and, when finished, will likely result in some additional ideas for meaningful legislative reform.

Finally, there’s the frustration of the egregious Medicare Physician Fee Schedule that has decreased physicians’ reimbursement in a time of accelerated inflation in the cost of running a practice. At the same time, Medicare Advantage plans and everyone else in the government-reimbursed health system are getting at least an inflationary raise. This has created an ire among all physicians that we have not seen in quite a while and which we are leveraging into grassroots outreach.

The problems in the Fee Schedule result from a combination of factors, but one overarching issue is the concept of “budget neutrality,” which essentially requires CMS to make up for any new spending over a certain amount by a commensurate reduction across the whole Fee Schedule. This has the effect of turning the Fee Schedule into a fixed pie: If someone’s slice gets bigger, someone else’s slice must get smaller, but the pie itself never gets bigger. To make matters worse, the Medicare Access and CHIP Reauthorization Act of 2015 has not resulted in advancing value-driven care as the Congress had envisioned when it enacted that legislation. The good news is that there is widespread recognition in Congress that a system built on temporary legislative “patches” to avoid deep payment reductions is unsustainable and must be fixed. The Supporting Medicare Providers Act of 2022 (H.R. 8800) that’s currently pending in the House to offset the looming 2023 Fee Schedule cuts also includes a Sense of the Congress, or nonbinding resolution, establishing the need for administrative and legislative actions for long-term, meaningful reform of Medicare physician payment, along three principles: ensuring financial stability and predictability, promoting and rewarding value-based care innovation, and safeguarding timely access to high-quality care by advancing health equity and reducing disparities.

Turning frustration into action

Much of the frustration for those of us who take care of patients is that many actions and policies are based on profits and politics and not on patient care.

It is unfortunate that money plays such an important role in politics. We are all aware of the power of the well-heeled lobbyist and how money can lead to legislation that is more beneficial to one for-profit company versus another in the health care sector. But then there is the party politics of health care legislation. We see examples of great legislation offered by one party being buried because it might be beneficial to the “other side” in the next election, in spite of the fact that both sides agree on the issue. Here is where we must fight our cynicism and remember our patients. Building and maintaining a relationship with our representatives, whether we agree with them are not, is a very important part of advocacy.

As we come off the recent elections, it is important that we acquaint ourselves with our newly elected representatives and reacquaint ourselves with our re-elected officials. Recently, the Coalition of State Rheumatology Organizations had an advocacy day asking rheumatologists to invite their legislator (city, state, or federal) to their office to witness first-hand the practice of rheumatology. The importance of asking your representative to visit your office cannot be overemphasized. First, you get to know the staffer who arranges these visits. Having a good relationship with your representative’s staff is important in maintaining future communications. Having your legislator tour your office, while you share the daily challenges of getting the right medication for patients, is invaluable to their understanding of how the delay in care that utilization management tools such as prior authorizations and step therapy can cause. It is also helpful for you or your office manager to highlight how independent practices are small businesses that must be run efficiently to ensure they can stay open. Building a relationship with and educating your representatives on issues they may not be familiar with will encourage them to use you as a resource in the future.

CSRO has a legislator invitation template, and we can provide talking points if the invitation is accepted. Many state legislative sessions begin in January, so now is the time to get to know your legislator.

Let’s celebrate the wins of 2022 and not let the frustrations with the system diminish our passion – that’s the hard part! Onward to 2023 as “Rheums for Action!”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

As we come to a close on 2022, let’s take a look at the celebrations and frustrations of the past year’s health policies so that they may act as a catalyst, encouraging us to engage with our representatives. Some of these policies include actions by major companies that rule our health care system, as well as the regulations and legislation passed (or not passed) by our governmental entities. And of course, we must consider how profits and politics influence these policies and often rule the roost!

Insurance

Once again, we are facing increased nonmedical switching of stable patients to different medications through ever-increasing formulary exclusions and higher tiering of less profitable drugs. There are some reports of patients being whipsawed back and forth yearly between reference infliximab and various biosimilars, depending on which is the most profitable to the health plan at the time. And now it’s not just the copay accumulator or maximizer programs that are abusing patient assistance programs, there are new “alternative funding companies” that are carving out expensive and specialty drugs from coverage of employers’ funded health plans. These alternative funding companies then obtain medications – sometimes from other countries – and other forms of assistance from manufacturers and foundations. There have been reports that they make the patient assign power of attorney to them and even pretend to be the patient to obtain the drug, assistance, and copay cards and then bill the employer for getting the free drug or assistance. This abuse of the system, along with copay maximizers, are causing drug manufacturers to rethink their assistance policies, with middlemen reaping the advantages of the assistance plans and not the truly needy patient.

Legislation and regulation

Substantive progress continues to be made on access issues in the states. A total of 5 states signed step-therapy legislation into law, 3 states have new copay accumulator program bans, 13 states began to debate the issue of white bagging, and 16 states began to consider the next stage of pharmacy benefit manager (PBM) reform with rebate-pass-through legislation.

At the federal level, the Inflation Reduction Act (IRA; H.R. 5376) was enacted in August and, like all major pieces of legislation, there are pros and cons. On the positive side, the legislation reforms Medicare Part D cost-sharing, including – for the first time – the creation of an annual cap on cost-sharing by beneficiaries. That will especially help patients with high, ongoing prescription drug needs. On the negative side, despite its extensive drug-pricing provisions, the IRA did not include any reform of PBM practices. In fact, Congress has delayed implementation of the so-called “rebate rule” for 10 years. That rule would have essentially ended payments from drug companies to PBMs in exchange for formulary placement by removing safe harbor protection from antikickback law for these payments, allowing patients to benefit from these payments.

Finally, the IRA included extensive provisions applicable to drug manufacturers, including a mechanism for Medicare to set prices directly for medications that have been on the market for a certain number of years but are still without a biosimilar or generic. This will apply fully to selected Part B drugs as of 2028. The key for rheumatologists and our patients in the next few years will be to engage with the Centers for Medicare & Medicaid Services as it implements this provision to ensure that rheumatologists are not underwater financially on the acquisition of medications subject to the new pricing mechanism.

With regard to utilization management reform at the federal level, the Ensuring Seniors’ Timely Access to Care Act (H.R. 3173) would reform prior authorization in Medicare Advantage, but after passing in the House on Sept. 14, the bill has slowed down in the Senate. In some part, that may be because of a surprising score from the Congressional Budget Office, which projected that the bill would cost $16 billion. However, this is not insurmountable: The legislation enjoys broad bipartisan support in the Senate, and its sponsors remain committed to enactment before the end of the year. Additionally, the Safe Step Act (S. 464) would reform step therapy practices in employer-based coverage, but that legislation has not passed either chamber of Congress despite bipartisan support and is unlikely to be enacted before the end of this congressional session.

As noted above, PBMs escaped meaningful scrutiny or reform in the IRA, but the Federal Trade Commission took a different approach when it announced earlier in 2022 that it would conduct an investigation into the business practices of several major PBMs. That study is ongoing and, when finished, will likely result in some additional ideas for meaningful legislative reform.

Finally, there’s the frustration of the egregious Medicare Physician Fee Schedule that has decreased physicians’ reimbursement in a time of accelerated inflation in the cost of running a practice. At the same time, Medicare Advantage plans and everyone else in the government-reimbursed health system are getting at least an inflationary raise. This has created an ire among all physicians that we have not seen in quite a while and which we are leveraging into grassroots outreach.

The problems in the Fee Schedule result from a combination of factors, but one overarching issue is the concept of “budget neutrality,” which essentially requires CMS to make up for any new spending over a certain amount by a commensurate reduction across the whole Fee Schedule. This has the effect of turning the Fee Schedule into a fixed pie: If someone’s slice gets bigger, someone else’s slice must get smaller, but the pie itself never gets bigger. To make matters worse, the Medicare Access and CHIP Reauthorization Act of 2015 has not resulted in advancing value-driven care as the Congress had envisioned when it enacted that legislation. The good news is that there is widespread recognition in Congress that a system built on temporary legislative “patches” to avoid deep payment reductions is unsustainable and must be fixed. The Supporting Medicare Providers Act of 2022 (H.R. 8800) that’s currently pending in the House to offset the looming 2023 Fee Schedule cuts also includes a Sense of the Congress, or nonbinding resolution, establishing the need for administrative and legislative actions for long-term, meaningful reform of Medicare physician payment, along three principles: ensuring financial stability and predictability, promoting and rewarding value-based care innovation, and safeguarding timely access to high-quality care by advancing health equity and reducing disparities.

Turning frustration into action

Much of the frustration for those of us who take care of patients is that many actions and policies are based on profits and politics and not on patient care.

It is unfortunate that money plays such an important role in politics. We are all aware of the power of the well-heeled lobbyist and how money can lead to legislation that is more beneficial to one for-profit company versus another in the health care sector. But then there is the party politics of health care legislation. We see examples of great legislation offered by one party being buried because it might be beneficial to the “other side” in the next election, in spite of the fact that both sides agree on the issue. Here is where we must fight our cynicism and remember our patients. Building and maintaining a relationship with our representatives, whether we agree with them are not, is a very important part of advocacy.

As we come off the recent elections, it is important that we acquaint ourselves with our newly elected representatives and reacquaint ourselves with our re-elected officials. Recently, the Coalition of State Rheumatology Organizations had an advocacy day asking rheumatologists to invite their legislator (city, state, or federal) to their office to witness first-hand the practice of rheumatology. The importance of asking your representative to visit your office cannot be overemphasized. First, you get to know the staffer who arranges these visits. Having a good relationship with your representative’s staff is important in maintaining future communications. Having your legislator tour your office, while you share the daily challenges of getting the right medication for patients, is invaluable to their understanding of how the delay in care that utilization management tools such as prior authorizations and step therapy can cause. It is also helpful for you or your office manager to highlight how independent practices are small businesses that must be run efficiently to ensure they can stay open. Building a relationship with and educating your representatives on issues they may not be familiar with will encourage them to use you as a resource in the future.

CSRO has a legislator invitation template, and we can provide talking points if the invitation is accepted. Many state legislative sessions begin in January, so now is the time to get to know your legislator.

Let’s celebrate the wins of 2022 and not let the frustrations with the system diminish our passion – that’s the hard part! Onward to 2023 as “Rheums for Action!”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Health care costs are skyrocketing for everyone! For employers, the cost of health insurance is second only to their payroll expense. Per person spending in employer plans grew by 22% between 2015 and 2019. This outpaced inflation and economic growth. Affording health insurance for business owners has become more and more difficult, bordering on desperation for some. Consequently, they are looking for ways to be more efficient in their health care spending. One way is through self-funding their employees’ health care costs. This means that the employer directly pays for the care of their employees. While it has always been thought this was just for very large employers, it is becoming more common with smaller businesses. There is more flexibility and oversight with self-funded plans, and the employer can dictate exactly what benefits are covered within the bounds of the law. While this can make it easier to exclude certain therapies and even institute site-of-care restrictions, it also can make the employer vulnerable to health insurance companies, pharmacy benefit managers (PBMs), and third-party administrators (TPAs) that promise large discounts in plan and drug spending at the expense of their employees’ health.

Recently enacted state laws often don’t apply

Because employers who self-fund the health care for their employees are increasingly desperate to save money, they will often agree to plans that are less expensive but offer suboptimal care, particularly for patients with chronic diseases requiring expensive medicines. Many employers are not fully informed of the ramifications of these policies, so the Coalition of State Rheumatology Organizations is creating an educational employer tool kit that not only highlights the importance of disease control for their employees with rheumatic conditions but also outlines the pitfalls and misinformation that may be given to them by the insurance companies, PBMs, and other third parties that administer their health plan.

Policies that sacrifice patient care of course are not exclusive to certain self-funded health plans. The CSRO’s Payer Issue Response Team (PIRT) receives complaints daily from rheumatologists around the country regarding both the Employee Retirement Income Security Act and non-ERISA health plan policies that are harmful to their patients. Our PIRT team assesses these complaints and researches solutions that can include writing letters to the health insurance companies, employers, and departments of insurance, as well as applying enacted state legislation that overrides some of the detrimental policies. (Utilization management legislation, which has passed in many states, can be easily found on CSRO’s map tool.) These state laws can help patients with everything from harmful step therapy and nonmedical switching policies to accumulator adjustment programs denying application of copay card value to their deductibles. Unfortunately, these laws do not apply to most self-funded employer health plans, which are preempted by ERISA. Consequently, those employees are not protected from harmful changes in formularies and other policies.
 

Forced ‘white bagging’ in self-funded plans

Mandated “white bagging” has become a favorite for health plans covered by large insurance companies, which say that the practice is less expensive than what the physician would charge for the medication. White bagging takes away the ability of the physician to “buy and bill” infusibles that are given in their office. While some rheumatologists may accept this, there are many who do not accept infusible medications coming from another source. Often the health plan will tell the rheumatologist they must accept the white bagging or transfer the patient to another rheumatologist who will. Clearly, many health plans and TPAs do not understand the bonds that are created over the years between rheumatologists and their patients. Ironically, the price of the white-bagged medication charged to the employer has been shown often to be higher than what the physician would have charged.

Some TPAs also convince employers to carve out specialty medications from their policy entirely, leaving the employee uninsured for these meds. These TPAs then attempt to obtain the medications from the manufacturers, foundations, compounding pharmacies, and even other countries for free or highly discounted prices. Even if obtained at no cost, the TPA will charge the employer a percentage of the list price or fee for obtaining it. On the surface, this may seem like a good idea, but there are a number of issues with this, including some that are legally suspect. First of all, uninsuring employees for certain medications to take advantage of patient assistance programs from manufacturers and foundations could be viewed as perfectly legal and perfectly unethical. The legality of this practice is questionable when these companies pretend to be the patient when applying for the assistance or present compounded medication as coming from the manufacturer, or if the TPA obtains the medication from outside the country. Additionally, many employers end up paying 20% of the list price of a medication for a service that physicians provide at no cost for uninsured patients.
 

Educating employers

CSRO’s employer tool kit hopes to educate employers with self-funded health plans about the pitfalls of some of these policies and offers suggestions on how to best navigate these issues for employees with rheumatic diseases. We are hoping to launch this tool kit to small to medium business groups in the near future.

Advocacy is more than just contacting health insurers and those who make our laws and regulations. Although that is important, reaching out to those who employ our patients can be integral to ensuring they get the best care.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Health care costs are skyrocketing for everyone! For employers, the cost of health insurance is second only to their payroll expense. Per person spending in employer plans grew by 22% between 2015 and 2019. This outpaced inflation and economic growth. Affording health insurance for business owners has become more and more difficult, bordering on desperation for some. Consequently, they are looking for ways to be more efficient in their health care spending. One way is through self-funding their employees’ health care costs. This means that the employer directly pays for the care of their employees. While it has always been thought this was just for very large employers, it is becoming more common with smaller businesses. There is more flexibility and oversight with self-funded plans, and the employer can dictate exactly what benefits are covered within the bounds of the law. While this can make it easier to exclude certain therapies and even institute site-of-care restrictions, it also can make the employer vulnerable to health insurance companies, pharmacy benefit managers (PBMs), and third-party administrators (TPAs) that promise large discounts in plan and drug spending at the expense of their employees’ health.

Recently enacted state laws often don’t apply

Because employers who self-fund the health care for their employees are increasingly desperate to save money, they will often agree to plans that are less expensive but offer suboptimal care, particularly for patients with chronic diseases requiring expensive medicines. Many employers are not fully informed of the ramifications of these policies, so the Coalition of State Rheumatology Organizations is creating an educational employer tool kit that not only highlights the importance of disease control for their employees with rheumatic conditions but also outlines the pitfalls and misinformation that may be given to them by the insurance companies, PBMs, and other third parties that administer their health plan.

Policies that sacrifice patient care of course are not exclusive to certain self-funded health plans. The CSRO’s Payer Issue Response Team (PIRT) receives complaints daily from rheumatologists around the country regarding both the Employee Retirement Income Security Act and non-ERISA health plan policies that are harmful to their patients. Our PIRT team assesses these complaints and researches solutions that can include writing letters to the health insurance companies, employers, and departments of insurance, as well as applying enacted state legislation that overrides some of the detrimental policies. (Utilization management legislation, which has passed in many states, can be easily found on CSRO’s map tool.) These state laws can help patients with everything from harmful step therapy and nonmedical switching policies to accumulator adjustment programs denying application of copay card value to their deductibles. Unfortunately, these laws do not apply to most self-funded employer health plans, which are preempted by ERISA. Consequently, those employees are not protected from harmful changes in formularies and other policies.
 

Forced ‘white bagging’ in self-funded plans

Mandated “white bagging” has become a favorite for health plans covered by large insurance companies, which say that the practice is less expensive than what the physician would charge for the medication. White bagging takes away the ability of the physician to “buy and bill” infusibles that are given in their office. While some rheumatologists may accept this, there are many who do not accept infusible medications coming from another source. Often the health plan will tell the rheumatologist they must accept the white bagging or transfer the patient to another rheumatologist who will. Clearly, many health plans and TPAs do not understand the bonds that are created over the years between rheumatologists and their patients. Ironically, the price of the white-bagged medication charged to the employer has been shown often to be higher than what the physician would have charged.

Some TPAs also convince employers to carve out specialty medications from their policy entirely, leaving the employee uninsured for these meds. These TPAs then attempt to obtain the medications from the manufacturers, foundations, compounding pharmacies, and even other countries for free or highly discounted prices. Even if obtained at no cost, the TPA will charge the employer a percentage of the list price or fee for obtaining it. On the surface, this may seem like a good idea, but there are a number of issues with this, including some that are legally suspect. First of all, uninsuring employees for certain medications to take advantage of patient assistance programs from manufacturers and foundations could be viewed as perfectly legal and perfectly unethical. The legality of this practice is questionable when these companies pretend to be the patient when applying for the assistance or present compounded medication as coming from the manufacturer, or if the TPA obtains the medication from outside the country. Additionally, many employers end up paying 20% of the list price of a medication for a service that physicians provide at no cost for uninsured patients.
 

Educating employers

CSRO’s employer tool kit hopes to educate employers with self-funded health plans about the pitfalls of some of these policies and offers suggestions on how to best navigate these issues for employees with rheumatic diseases. We are hoping to launch this tool kit to small to medium business groups in the near future.

Advocacy is more than just contacting health insurers and those who make our laws and regulations. Although that is important, reaching out to those who employ our patients can be integral to ensuring they get the best care.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Health care costs are skyrocketing for everyone! For employers, the cost of health insurance is second only to their payroll expense. Per person spending in employer plans grew by 22% between 2015 and 2019. This outpaced inflation and economic growth. Affording health insurance for business owners has become more and more difficult, bordering on desperation for some. Consequently, they are looking for ways to be more efficient in their health care spending. One way is through self-funding their employees’ health care costs. This means that the employer directly pays for the care of their employees. While it has always been thought this was just for very large employers, it is becoming more common with smaller businesses. There is more flexibility and oversight with self-funded plans, and the employer can dictate exactly what benefits are covered within the bounds of the law. While this can make it easier to exclude certain therapies and even institute site-of-care restrictions, it also can make the employer vulnerable to health insurance companies, pharmacy benefit managers (PBMs), and third-party administrators (TPAs) that promise large discounts in plan and drug spending at the expense of their employees’ health.

Recently enacted state laws often don’t apply

Because employers who self-fund the health care for their employees are increasingly desperate to save money, they will often agree to plans that are less expensive but offer suboptimal care, particularly for patients with chronic diseases requiring expensive medicines. Many employers are not fully informed of the ramifications of these policies, so the Coalition of State Rheumatology Organizations is creating an educational employer tool kit that not only highlights the importance of disease control for their employees with rheumatic conditions but also outlines the pitfalls and misinformation that may be given to them by the insurance companies, PBMs, and other third parties that administer their health plan.

Policies that sacrifice patient care of course are not exclusive to certain self-funded health plans. The CSRO’s Payer Issue Response Team (PIRT) receives complaints daily from rheumatologists around the country regarding both the Employee Retirement Income Security Act and non-ERISA health plan policies that are harmful to their patients. Our PIRT team assesses these complaints and researches solutions that can include writing letters to the health insurance companies, employers, and departments of insurance, as well as applying enacted state legislation that overrides some of the detrimental policies. (Utilization management legislation, which has passed in many states, can be easily found on CSRO’s map tool.) These state laws can help patients with everything from harmful step therapy and nonmedical switching policies to accumulator adjustment programs denying application of copay card value to their deductibles. Unfortunately, these laws do not apply to most self-funded employer health plans, which are preempted by ERISA. Consequently, those employees are not protected from harmful changes in formularies and other policies.
 

Forced ‘white bagging’ in self-funded plans

Mandated “white bagging” has become a favorite for health plans covered by large insurance companies, which say that the practice is less expensive than what the physician would charge for the medication. White bagging takes away the ability of the physician to “buy and bill” infusibles that are given in their office. While some rheumatologists may accept this, there are many who do not accept infusible medications coming from another source. Often the health plan will tell the rheumatologist they must accept the white bagging or transfer the patient to another rheumatologist who will. Clearly, many health plans and TPAs do not understand the bonds that are created over the years between rheumatologists and their patients. Ironically, the price of the white-bagged medication charged to the employer has been shown often to be higher than what the physician would have charged.

Some TPAs also convince employers to carve out specialty medications from their policy entirely, leaving the employee uninsured for these meds. These TPAs then attempt to obtain the medications from the manufacturers, foundations, compounding pharmacies, and even other countries for free or highly discounted prices. Even if obtained at no cost, the TPA will charge the employer a percentage of the list price or fee for obtaining it. On the surface, this may seem like a good idea, but there are a number of issues with this, including some that are legally suspect. First of all, uninsuring employees for certain medications to take advantage of patient assistance programs from manufacturers and foundations could be viewed as perfectly legal and perfectly unethical. The legality of this practice is questionable when these companies pretend to be the patient when applying for the assistance or present compounded medication as coming from the manufacturer, or if the TPA obtains the medication from outside the country. Additionally, many employers end up paying 20% of the list price of a medication for a service that physicians provide at no cost for uninsured patients.
 

Educating employers

CSRO’s employer tool kit hopes to educate employers with self-funded health plans about the pitfalls of some of these policies and offers suggestions on how to best navigate these issues for employees with rheumatic diseases. We are hoping to launch this tool kit to small to medium business groups in the near future.

Advocacy is more than just contacting health insurers and those who make our laws and regulations. Although that is important, reaching out to those who employ our patients can be integral to ensuring they get the best care.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is the CSRO’s Vice President of Advocacy and Government Affairs and its immediate Past President, as well as past chair of the Alliance for Safe Biologic Medicines and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Rheumatologists who administer medications in their office for Medicare patients, specifically those that are infused, have in recent years encountered problems providing certain medication formulations as well as coding and billing for their administration. In attempting to resolve these issues, rheumatologists and their professional organizations have found themselves caught in a morass of Medicare agency “ping-pong,” where it is unclear who the decision makers are.

The private health care insurers that process medical claims for Medicare beneficiaries, called A/B Medicare Administrative Contractors or more commonly known as MACs, are the operational intermediary between the Centers for Medicare & Medicaid Services’ fee-for-service program and the physicians enrolled in it. The country is divided into 12 sections, each with a MAC that has jurisdiction over that area. Among other things, the MACs establish local coverage and payment policies based on their understanding of CMS’ rules, regulations, and the Medicare statute, and therein lies the problem: When a physician has a question on a policy or decision that was made by a MAC, it is very difficult to determine the origins of the issue and who can address the problem. It’s a lot of “running in circles” between the MACs and CMS headquarters, hoping that someone will take the time to listen to your concern, but more importantly, work toward resolving the problem.

Who can address problems?

Meaningful, solutions-driven engagement with the MACs and CMS has become frustrating for physicians and advocacy organizations attempting to address a host of problems. The two issues alluded to above include the Self-Administered Drug Exclusion List (SAD List), which excludes certain Part B medication formulations from coverage under certain conditions and the “down coding” of certain infusion administration codes when specific drugs are delivered. These problems are compounded by the curtailment of physician stakeholder input via Contractor Advisory Committees (CACs). Each state has its own CAC, but the CAC meetings have been restructured as a result of the 21st Century Cures Act, and ultimately eradicated the involvement of these physician advisers in policy development at the local level.

This has left many of rheumatology representatives to the CACs demoralized and generally unhappy about certain decisions being made without their input. There is also inconsistency in terms of coverage and payment policies throughout the country. For example, in one MAC jurisdiction, a certain medication may be on the SAD List and excluded from Part B coverage, meaning beneficiary access is only available through Part D (and assuming they can afford it), while in an adjacent MAC jurisdiction, both formulations are covered.

The Coalition of State Rheumatology Organizations, along with the American College of Rheumatology and other specialty groups, is attempting to address these issues from many different angles. There is not enough space to explain the nuances of local coverage policy development, but the timeline below highlights the long and winding road that we have travelled to resolve these issues.

• February 2021: CSRO meets with CMS’ Coverage and Analysis Group (CAG) to raise concerns about ustekinumab (Stelara) and its inclusion on the SAD List.
• April 2021: CSRO follows up with CMS’ CAG on SAD List concerns in a letter.
• May 2021: Most MACs issue or revise local coverage articles, or “billing and coding” articles, that down code the administration of certain biologic medications, with some expanding the list of biologic medications subject to the policy, prompting a strong response from CSRO.
• September 2021: CSRO meets with multijurisdictional MAC Contract Medical Director (CMD) work group to discuss down coding, SAD List, and physician/CAC engagement.
• October 2021: At the suggestion of the CMDs, CSRO re-engages with CMS’ CAG to raise concerns about down-coding policies and physician/CAC engagement, and continue the SAD List discussion.
• November 2021: CSRO is connected with CMS’ “payment ombudsman” on down coding and the SAD List.
• January 2022: CSRO signs on to multispecialty coalition effort aimed at improving local coverage and payment policy and restoring the importance of the CAC.
• February 2022: CSRO participates in CMS CAG meeting with multispecialty coalition, raising concerns about the down-coding and SAD List policies.
• March/April 2022: Through its coalition partner, the Alliance of Specialty Medicine, CSRO meets with the principal deputy CMS administrator and raises awareness to these issues.
• May 2022: CSRO participates in follow-up discussion with CMS’ CAG as part of multispecialty coalition, reiterating concerns about the down coding and SAD List policies. With the assistance of the CMS’ Office of the Administrator, CSRO meets with CMS’ Center for Program Integrity to seek a “pause” in down-coding policies for certain biologic medications.
• June 2022: CMS notifies CSRO of a “temporary pause” in medical review while the agency reviews various manuals and policies to determine the appropriate steps forward. To assist the agency, CSRO works with practices to develop a resource that CMS can use to establish criteria for determining when a medication warrants use of complex drug administration codes. CSRO re-engages with multijurisdictional MAC CMD workgroup to continue discussions on SAD List.
• July 2022: CSRO meets with new multijurisdictional MAC CMD workgroup focused on improving the process for developing local coverage and payment policy.

Our dialogue with CMS leadership and staff continues. In the most recent communication, staff in the CMS administrator’s office informed us that the issue is complicated and crosses several different parts of the agency, and they are still determining next steps.

The rheumatology community’s journey toward solving the challenges facing practices and patients is emblematic of the communication problem between provider groups and the CMS-MAC establishment. While we understand this is how bureaucracy works, it is not to the benefit of Medicare beneficiaries to have a system that is so difficult to navigate, even by the best of the regulatory gurus. This is not an indictment of any specific group but a call to action on the part of the government and their contractors to create a clear, transparent path to getting answers when we have a problem.

And by the way, we do have another meeting with yet another CMS “center” regarding the SAD List in August.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Rheumatologists who administer medications in their office for Medicare patients, specifically those that are infused, have in recent years encountered problems providing certain medication formulations as well as coding and billing for their administration. In attempting to resolve these issues, rheumatologists and their professional organizations have found themselves caught in a morass of Medicare agency “ping-pong,” where it is unclear who the decision makers are.

The private health care insurers that process medical claims for Medicare beneficiaries, called A/B Medicare Administrative Contractors or more commonly known as MACs, are the operational intermediary between the Centers for Medicare & Medicaid Services’ fee-for-service program and the physicians enrolled in it. The country is divided into 12 sections, each with a MAC that has jurisdiction over that area. Among other things, the MACs establish local coverage and payment policies based on their understanding of CMS’ rules, regulations, and the Medicare statute, and therein lies the problem: When a physician has a question on a policy or decision that was made by a MAC, it is very difficult to determine the origins of the issue and who can address the problem. It’s a lot of “running in circles” between the MACs and CMS headquarters, hoping that someone will take the time to listen to your concern, but more importantly, work toward resolving the problem.

Who can address problems?

Meaningful, solutions-driven engagement with the MACs and CMS has become frustrating for physicians and advocacy organizations attempting to address a host of problems. The two issues alluded to above include the Self-Administered Drug Exclusion List (SAD List), which excludes certain Part B medication formulations from coverage under certain conditions and the “down coding” of certain infusion administration codes when specific drugs are delivered. These problems are compounded by the curtailment of physician stakeholder input via Contractor Advisory Committees (CACs). Each state has its own CAC, but the CAC meetings have been restructured as a result of the 21st Century Cures Act, and ultimately eradicated the involvement of these physician advisers in policy development at the local level.

This has left many of rheumatology representatives to the CACs demoralized and generally unhappy about certain decisions being made without their input. There is also inconsistency in terms of coverage and payment policies throughout the country. For example, in one MAC jurisdiction, a certain medication may be on the SAD List and excluded from Part B coverage, meaning beneficiary access is only available through Part D (and assuming they can afford it), while in an adjacent MAC jurisdiction, both formulations are covered.

The Coalition of State Rheumatology Organizations, along with the American College of Rheumatology and other specialty groups, is attempting to address these issues from many different angles. There is not enough space to explain the nuances of local coverage policy development, but the timeline below highlights the long and winding road that we have travelled to resolve these issues.

• February 2021: CSRO meets with CMS’ Coverage and Analysis Group (CAG) to raise concerns about ustekinumab (Stelara) and its inclusion on the SAD List.
• April 2021: CSRO follows up with CMS’ CAG on SAD List concerns in a letter.
• May 2021: Most MACs issue or revise local coverage articles, or “billing and coding” articles, that down code the administration of certain biologic medications, with some expanding the list of biologic medications subject to the policy, prompting a strong response from CSRO.
• September 2021: CSRO meets with multijurisdictional MAC Contract Medical Director (CMD) work group to discuss down coding, SAD List, and physician/CAC engagement.
• October 2021: At the suggestion of the CMDs, CSRO re-engages with CMS’ CAG to raise concerns about down-coding policies and physician/CAC engagement, and continue the SAD List discussion.
• November 2021: CSRO is connected with CMS’ “payment ombudsman” on down coding and the SAD List.
• January 2022: CSRO signs on to multispecialty coalition effort aimed at improving local coverage and payment policy and restoring the importance of the CAC.
• February 2022: CSRO participates in CMS CAG meeting with multispecialty coalition, raising concerns about the down-coding and SAD List policies.
• March/April 2022: Through its coalition partner, the Alliance of Specialty Medicine, CSRO meets with the principal deputy CMS administrator and raises awareness to these issues.
• May 2022: CSRO participates in follow-up discussion with CMS’ CAG as part of multispecialty coalition, reiterating concerns about the down coding and SAD List policies. With the assistance of the CMS’ Office of the Administrator, CSRO meets with CMS’ Center for Program Integrity to seek a “pause” in down-coding policies for certain biologic medications.
• June 2022: CMS notifies CSRO of a “temporary pause” in medical review while the agency reviews various manuals and policies to determine the appropriate steps forward. To assist the agency, CSRO works with practices to develop a resource that CMS can use to establish criteria for determining when a medication warrants use of complex drug administration codes. CSRO re-engages with multijurisdictional MAC CMD workgroup to continue discussions on SAD List.
• July 2022: CSRO meets with new multijurisdictional MAC CMD workgroup focused on improving the process for developing local coverage and payment policy.

Our dialogue with CMS leadership and staff continues. In the most recent communication, staff in the CMS administrator’s office informed us that the issue is complicated and crosses several different parts of the agency, and they are still determining next steps.

The rheumatology community’s journey toward solving the challenges facing practices and patients is emblematic of the communication problem between provider groups and the CMS-MAC establishment. While we understand this is how bureaucracy works, it is not to the benefit of Medicare beneficiaries to have a system that is so difficult to navigate, even by the best of the regulatory gurus. This is not an indictment of any specific group but a call to action on the part of the government and their contractors to create a clear, transparent path to getting answers when we have a problem.

And by the way, we do have another meeting with yet another CMS “center” regarding the SAD List in August.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

Rheumatologists who administer medications in their office for Medicare patients, specifically those that are infused, have in recent years encountered problems providing certain medication formulations as well as coding and billing for their administration. In attempting to resolve these issues, rheumatologists and their professional organizations have found themselves caught in a morass of Medicare agency “ping-pong,” where it is unclear who the decision makers are.

The private health care insurers that process medical claims for Medicare beneficiaries, called A/B Medicare Administrative Contractors or more commonly known as MACs, are the operational intermediary between the Centers for Medicare & Medicaid Services’ fee-for-service program and the physicians enrolled in it. The country is divided into 12 sections, each with a MAC that has jurisdiction over that area. Among other things, the MACs establish local coverage and payment policies based on their understanding of CMS’ rules, regulations, and the Medicare statute, and therein lies the problem: When a physician has a question on a policy or decision that was made by a MAC, it is very difficult to determine the origins of the issue and who can address the problem. It’s a lot of “running in circles” between the MACs and CMS headquarters, hoping that someone will take the time to listen to your concern, but more importantly, work toward resolving the problem.

Who can address problems?

Meaningful, solutions-driven engagement with the MACs and CMS has become frustrating for physicians and advocacy organizations attempting to address a host of problems. The two issues alluded to above include the Self-Administered Drug Exclusion List (SAD List), which excludes certain Part B medication formulations from coverage under certain conditions and the “down coding” of certain infusion administration codes when specific drugs are delivered. These problems are compounded by the curtailment of physician stakeholder input via Contractor Advisory Committees (CACs). Each state has its own CAC, but the CAC meetings have been restructured as a result of the 21st Century Cures Act, and ultimately eradicated the involvement of these physician advisers in policy development at the local level.

This has left many of rheumatology representatives to the CACs demoralized and generally unhappy about certain decisions being made without their input. There is also inconsistency in terms of coverage and payment policies throughout the country. For example, in one MAC jurisdiction, a certain medication may be on the SAD List and excluded from Part B coverage, meaning beneficiary access is only available through Part D (and assuming they can afford it), while in an adjacent MAC jurisdiction, both formulations are covered.

The Coalition of State Rheumatology Organizations, along with the American College of Rheumatology and other specialty groups, is attempting to address these issues from many different angles. There is not enough space to explain the nuances of local coverage policy development, but the timeline below highlights the long and winding road that we have travelled to resolve these issues.

• February 2021: CSRO meets with CMS’ Coverage and Analysis Group (CAG) to raise concerns about ustekinumab (Stelara) and its inclusion on the SAD List.
• April 2021: CSRO follows up with CMS’ CAG on SAD List concerns in a letter.
• May 2021: Most MACs issue or revise local coverage articles, or “billing and coding” articles, that down code the administration of certain biologic medications, with some expanding the list of biologic medications subject to the policy, prompting a strong response from CSRO.
• September 2021: CSRO meets with multijurisdictional MAC Contract Medical Director (CMD) work group to discuss down coding, SAD List, and physician/CAC engagement.
• October 2021: At the suggestion of the CMDs, CSRO re-engages with CMS’ CAG to raise concerns about down-coding policies and physician/CAC engagement, and continue the SAD List discussion.
• November 2021: CSRO is connected with CMS’ “payment ombudsman” on down coding and the SAD List.
• January 2022: CSRO signs on to multispecialty coalition effort aimed at improving local coverage and payment policy and restoring the importance of the CAC.
• February 2022: CSRO participates in CMS CAG meeting with multispecialty coalition, raising concerns about the down-coding and SAD List policies.
• March/April 2022: Through its coalition partner, the Alliance of Specialty Medicine, CSRO meets with the principal deputy CMS administrator and raises awareness to these issues.
• May 2022: CSRO participates in follow-up discussion with CMS’ CAG as part of multispecialty coalition, reiterating concerns about the down coding and SAD List policies. With the assistance of the CMS’ Office of the Administrator, CSRO meets with CMS’ Center for Program Integrity to seek a “pause” in down-coding policies for certain biologic medications.
• June 2022: CMS notifies CSRO of a “temporary pause” in medical review while the agency reviews various manuals and policies to determine the appropriate steps forward. To assist the agency, CSRO works with practices to develop a resource that CMS can use to establish criteria for determining when a medication warrants use of complex drug administration codes. CSRO re-engages with multijurisdictional MAC CMD workgroup to continue discussions on SAD List.
• July 2022: CSRO meets with new multijurisdictional MAC CMD workgroup focused on improving the process for developing local coverage and payment policy.

Our dialogue with CMS leadership and staff continues. In the most recent communication, staff in the CMS administrator’s office informed us that the issue is complicated and crosses several different parts of the agency, and they are still determining next steps.

The rheumatology community’s journey toward solving the challenges facing practices and patients is emblematic of the communication problem between provider groups and the CMS-MAC establishment. While we understand this is how bureaucracy works, it is not to the benefit of Medicare beneficiaries to have a system that is so difficult to navigate, even by the best of the regulatory gurus. This is not an indictment of any specific group but a call to action on the part of the government and their contractors to create a clear, transparent path to getting answers when we have a problem.

And by the way, we do have another meeting with yet another CMS “center” regarding the SAD List in August.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

I live in New Orleans and recently became aware of a piece of state legislation that would create a “gold card” system for prior authorizations in Louisiana. Before delving into what is a gold card and how it works, let’s take a look at the evolution of prior authorizations (PAs).

Commercial health insurance and Medicare/Medicaid had their beginnings in the 1950s and 1960s. Because the government would now be paying for medical services for seniors, there was a concern that there might be an “overutilization” of services. This concern resulted in the concepts of utilization review and “medical necessity.” These utilization reviews morphed into what are now known as utilization management tools (UMTs). The original intent of these tools was to link cost containment to quality assurance.

PAs are one of a number of UMTs, along with formulary step therapy and nonmedical switching, that are used by health insurance companies and pharmacy benefit managers to determine whether a prescribed product or service is medically necessary and cost effective. Originally, it also meant that the service/treatment would be reimbursed. That is not the case anymore.

Today, physicians face many frivolous PAs for generic medications, such as methotrexate and prednisone, and ironically sometimes higher-priced drugs are preferred over lower-priced ones.

A number of surveys, including a recent one of more than 1,000 specialty physicians by the Alliance of Specialty Medicine, show that PAs are not only a significant administrative burden on practices but also harm patients with significant delays in accessing needed treatments and diagnostic services.

The often-cited study by Zachary Wallace et al. clearly demonstrates significant harm to rheumatology patients whose treatments were delayed because of PAs. These delays caused a substantial increase in steroid dosages in patients whose PA was initially denied and even in those patients whose PAs were initially approved. These data and others support the urgent need to address the entire spectrum of PAs.

Over the last few years, we have seen many states passing laws, adding common-sense protections to mitigate the harmful consequences of UMTs. Such reforms are needed now to stop the indiscriminate use of PAs. Suggestions have included completely eliminating PAs for medications and services that are consistently approved, standardizing electronic forms across all health plans with real-time approval, and others, including “gold card” legislation. In addition to states’ efforts, Congress proposed H.R. 3173, the Improving Seniors’ Timely Access to Care Act of 2021, to protect seniors from the harm caused by PAs that are required by Medicare Advantage programs.

This brings us to the topic of gold card legislation, in which physicians would be given a gold card exempting them from PA for specific services (hopefully including prescription drugs). However, the criteria a physician needs to qualify for a gold card could vary from state to state. For example, it could be based on a physician’s PA approval rate during a specified review period, or it could be completely up to the insurance company to decide the criteria.

Texas is the only state that has passed gold card legislation thus far, although there is an active gold card bill in Louisiana (as of this writing). There are a few other states that have introduced gold card bills that have not yet passed, but there is definite interest throughout the country in this concept. In the Texas legislation, physicians would qualify for a gold card if they had a PA approval threshold of 90% for specific medications or services over a 6-month review period.

A few of the concerns about how this will be implemented and the potential unintended consequences of the legislation include:

• Would one gold card cover all drugs, a specific drug, or just a specific drug for a specific diagnosis?
• Will clinicians get bogged down appealing gold card denials/rescissions?
• Will health plans begin denying more requests up front to keep clinicians from qualifying for an exemption?

Unfortunately, the Louisiana gold card legislation has been amended from its original form to exclude “pharmacy services” and qualification for the gold card “shall be at the sole discretion of the health insurance issuer.”

Consequently, my initial excitement surrounding the Louisiana gold card legislation, for our specialty, has for the most part disappeared. Nonetheless, there is clear excitement behind the gold card concept throughout the country.

What is clear is that health insurance companies and pharmacy benefit managers have lost sight of the original purpose of UMTs, which is to ensure that patients have access to cost-effective quality care. Over the years, the aggressive use of PAs and other UMTs has led to a significant increase in administrative burden for our offices, and more importantly, a loss of disease control in many of our patients, resulting in an increase in overall health care costs.

While it is extremely disturbing that we need legislation to force health plans to keep our patients safe and ensure quality of care, it certainly proves that now, more than ever, we must make our voices be heard.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

I live in New Orleans and recently became aware of a piece of state legislation that would create a “gold card” system for prior authorizations in Louisiana. Before delving into what is a gold card and how it works, let’s take a look at the evolution of prior authorizations (PAs).

Commercial health insurance and Medicare/Medicaid had their beginnings in the 1950s and 1960s. Because the government would now be paying for medical services for seniors, there was a concern that there might be an “overutilization” of services. This concern resulted in the concepts of utilization review and “medical necessity.” These utilization reviews morphed into what are now known as utilization management tools (UMTs). The original intent of these tools was to link cost containment to quality assurance.

PAs are one of a number of UMTs, along with formulary step therapy and nonmedical switching, that are used by health insurance companies and pharmacy benefit managers to determine whether a prescribed product or service is medically necessary and cost effective. Originally, it also meant that the service/treatment would be reimbursed. That is not the case anymore.

Today, physicians face many frivolous PAs for generic medications, such as methotrexate and prednisone, and ironically sometimes higher-priced drugs are preferred over lower-priced ones.

A number of surveys, including a recent one of more than 1,000 specialty physicians by the Alliance of Specialty Medicine, show that PAs are not only a significant administrative burden on practices but also harm patients with significant delays in accessing needed treatments and diagnostic services.

The often-cited study by Zachary Wallace et al. clearly demonstrates significant harm to rheumatology patients whose treatments were delayed because of PAs. These delays caused a substantial increase in steroid dosages in patients whose PA was initially denied and even in those patients whose PAs were initially approved. These data and others support the urgent need to address the entire spectrum of PAs.

Over the last few years, we have seen many states passing laws, adding common-sense protections to mitigate the harmful consequences of UMTs. Such reforms are needed now to stop the indiscriminate use of PAs. Suggestions have included completely eliminating PAs for medications and services that are consistently approved, standardizing electronic forms across all health plans with real-time approval, and others, including “gold card” legislation. In addition to states’ efforts, Congress proposed H.R. 3173, the Improving Seniors’ Timely Access to Care Act of 2021, to protect seniors from the harm caused by PAs that are required by Medicare Advantage programs.

This brings us to the topic of gold card legislation, in which physicians would be given a gold card exempting them from PA for specific services (hopefully including prescription drugs). However, the criteria a physician needs to qualify for a gold card could vary from state to state. For example, it could be based on a physician’s PA approval rate during a specified review period, or it could be completely up to the insurance company to decide the criteria.

Texas is the only state that has passed gold card legislation thus far, although there is an active gold card bill in Louisiana (as of this writing). There are a few other states that have introduced gold card bills that have not yet passed, but there is definite interest throughout the country in this concept. In the Texas legislation, physicians would qualify for a gold card if they had a PA approval threshold of 90% for specific medications or services over a 6-month review period.

A few of the concerns about how this will be implemented and the potential unintended consequences of the legislation include:

• Would one gold card cover all drugs, a specific drug, or just a specific drug for a specific diagnosis?
• Will clinicians get bogged down appealing gold card denials/rescissions?
• Will health plans begin denying more requests up front to keep clinicians from qualifying for an exemption?

Unfortunately, the Louisiana gold card legislation has been amended from its original form to exclude “pharmacy services” and qualification for the gold card “shall be at the sole discretion of the health insurance issuer.”

Consequently, my initial excitement surrounding the Louisiana gold card legislation, for our specialty, has for the most part disappeared. Nonetheless, there is clear excitement behind the gold card concept throughout the country.

What is clear is that health insurance companies and pharmacy benefit managers have lost sight of the original purpose of UMTs, which is to ensure that patients have access to cost-effective quality care. Over the years, the aggressive use of PAs and other UMTs has led to a significant increase in administrative burden for our offices, and more importantly, a loss of disease control in many of our patients, resulting in an increase in overall health care costs.

While it is extremely disturbing that we need legislation to force health plans to keep our patients safe and ensure quality of care, it certainly proves that now, more than ever, we must make our voices be heard.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

I live in New Orleans and recently became aware of a piece of state legislation that would create a “gold card” system for prior authorizations in Louisiana. Before delving into what is a gold card and how it works, let’s take a look at the evolution of prior authorizations (PAs).

Commercial health insurance and Medicare/Medicaid had their beginnings in the 1950s and 1960s. Because the government would now be paying for medical services for seniors, there was a concern that there might be an “overutilization” of services. This concern resulted in the concepts of utilization review and “medical necessity.” These utilization reviews morphed into what are now known as utilization management tools (UMTs). The original intent of these tools was to link cost containment to quality assurance.

PAs are one of a number of UMTs, along with formulary step therapy and nonmedical switching, that are used by health insurance companies and pharmacy benefit managers to determine whether a prescribed product or service is medically necessary and cost effective. Originally, it also meant that the service/treatment would be reimbursed. That is not the case anymore.

Today, physicians face many frivolous PAs for generic medications, such as methotrexate and prednisone, and ironically sometimes higher-priced drugs are preferred over lower-priced ones.

A number of surveys, including a recent one of more than 1,000 specialty physicians by the Alliance of Specialty Medicine, show that PAs are not only a significant administrative burden on practices but also harm patients with significant delays in accessing needed treatments and diagnostic services.

The often-cited study by Zachary Wallace et al. clearly demonstrates significant harm to rheumatology patients whose treatments were delayed because of PAs. These delays caused a substantial increase in steroid dosages in patients whose PA was initially denied and even in those patients whose PAs were initially approved. These data and others support the urgent need to address the entire spectrum of PAs.

Over the last few years, we have seen many states passing laws, adding common-sense protections to mitigate the harmful consequences of UMTs. Such reforms are needed now to stop the indiscriminate use of PAs. Suggestions have included completely eliminating PAs for medications and services that are consistently approved, standardizing electronic forms across all health plans with real-time approval, and others, including “gold card” legislation. In addition to states’ efforts, Congress proposed H.R. 3173, the Improving Seniors’ Timely Access to Care Act of 2021, to protect seniors from the harm caused by PAs that are required by Medicare Advantage programs.

This brings us to the topic of gold card legislation, in which physicians would be given a gold card exempting them from PA for specific services (hopefully including prescription drugs). However, the criteria a physician needs to qualify for a gold card could vary from state to state. For example, it could be based on a physician’s PA approval rate during a specified review period, or it could be completely up to the insurance company to decide the criteria.

Texas is the only state that has passed gold card legislation thus far, although there is an active gold card bill in Louisiana (as of this writing). There are a few other states that have introduced gold card bills that have not yet passed, but there is definite interest throughout the country in this concept. In the Texas legislation, physicians would qualify for a gold card if they had a PA approval threshold of 90% for specific medications or services over a 6-month review period.

A few of the concerns about how this will be implemented and the potential unintended consequences of the legislation include:

• Would one gold card cover all drugs, a specific drug, or just a specific drug for a specific diagnosis?
• Will clinicians get bogged down appealing gold card denials/rescissions?
• Will health plans begin denying more requests up front to keep clinicians from qualifying for an exemption?

Unfortunately, the Louisiana gold card legislation has been amended from its original form to exclude “pharmacy services” and qualification for the gold card “shall be at the sole discretion of the health insurance issuer.”

Consequently, my initial excitement surrounding the Louisiana gold card legislation, for our specialty, has for the most part disappeared. Nonetheless, there is clear excitement behind the gold card concept throughout the country.

What is clear is that health insurance companies and pharmacy benefit managers have lost sight of the original purpose of UMTs, which is to ensure that patients have access to cost-effective quality care. Over the years, the aggressive use of PAs and other UMTs has led to a significant increase in administrative burden for our offices, and more importantly, a loss of disease control in many of our patients, resulting in an increase in overall health care costs.

While it is extremely disturbing that we need legislation to force health plans to keep our patients safe and ensure quality of care, it certainly proves that now, more than ever, we must make our voices be heard.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

It has become increasingly apparent that our health care system is suffering from a severe case of “transparency gap.” There is a lack of transparency at every level of care in the system. Whether it is the hidden rebate/fee kickbacks from drug manufacturers to pharmacy benefit managers (PBMs), or the variability in pricing of imaging and procedures based on site of care, the need for transparency has become acute. The health insurance sector seems to specialize in opaqueness. The vertical integration of the three largest insurance companies with the three largest PBMs seems to have trapped the flow of money and services in one big black box. It can be difficult to decide if this transparency gap is a case of missing information, misinformation, or a deliberate hiding of information … or maybe a combination of all three.

Recently, I testified before a Wisconsin State Senate committee about the consequences and potential harm to patients and physician offices caused by mandated “white bagging,” which refers to the process whereby provider-administered drugs are shipped to the provider by a specialty pharmacy, as opposed to the provider buying the drug and billing the insurance company. I was very surprised to hear the large employers testifying against our position.

As I listened to the employer groups, it was clear that their protestations were predominantly focused on hospital billing, where markups on the administered medications can be 500% and upward. It made sense that if a business has a “self-funded” health plan, where the employer pays for the cost of care of the employees, those very high markups on the hospital administered medications would eventually become unsustainable. In addition to paying for the care of employees, employers also pay the health insurance company/PBMs to administer the plan. It is obvious that self-funded businesses are being overwhelmed by all these rising costs. What is not so clear is how much information employers get from their plan administrators on their policies and pricing.

An Employee Benefit Research Institute (ERBI) study examined the difference in prices of health care procedures, labs, and imaging based on site of care. It clearly shows that physicians’ offices are the least expensive overall for infusion therapy, even when compared with home infusion in most cases.

Here is where the missing information and the white-bagging issue intersect. When insurance administrators tell employers that letting the provider “buy and bill” costs an outrageous amount, they fail to tell the employers that physicians’ office prices are comparable, or, in some cases, less than what the employer would pay with white bagging. In addition, the possible harm to patients and to the physicians’ practices are never mentioned to the employer. Here is a list of some of the problems associated with white bagging:

• Delays in patient care when dosages or treatment plans are modified during the patient visit.
• Significant waste of drugs when patients’ treatments change or appointments are rescheduled.
• Unnecessary administrative burden for both the patient and physician, including inventory nightmares.

We see the transparency gap again when formularies are created with higher-priced, branded drugs in place of lower-priced generics and alternatives. How can a PBM explain that a formulary that prefers a $10,000 prostate cancer drug but excludes the $400 generic of that drug actually saves money? If the employer doesn’t know about the generic, no explanation is needed.

When physician offices attempt to override some of these harmful policies, the PBM or insurance company often points the finger at the employer as the culprit responsible for the policy. Often, the employers have no idea of the ramifications of the contracts that they have signed. As health care costs continue to rise, it is important that employers are educated on how they can save money and improve patient care by directly contracting with independent physician practices.

In addition, the Consolidated Appropriation Act of 2020-21 (CAA) “seeks to enforce good value from providers and vendors, and forbids hidden contracting terms that disfavor employers and their employees.” This year and next, the employers will become responsible for transparency reporting and demonstrating cost effectiveness of therapies for their employees. In theory, this should uncover many of the hidden policies that favor only the health plans and not the patients or their employers. Many employers are unaware of the CAA, and vendors are in no hurry to inform them of it.

Not only will the CAA help to eliminate much of the transparency gap in the system, but it may encourage employers to work directly with independent physicians’ offices to provide more cost effective and transparent services for their patients. The Coalition of State Rheumatology Organizations is working on a framework to enable practicing rheumatologists to do exactly this.

In the meantime, we must continue educating employers on white bagging and other policies that harm both their patients and their “bottom line.” This education is just one of the steps needed to rid the health care system of the transparency gap that leads to higher prices and poorer care for all patients.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

It has become increasingly apparent that our health care system is suffering from a severe case of “transparency gap.” There is a lack of transparency at every level of care in the system. Whether it is the hidden rebate/fee kickbacks from drug manufacturers to pharmacy benefit managers (PBMs), or the variability in pricing of imaging and procedures based on site of care, the need for transparency has become acute. The health insurance sector seems to specialize in opaqueness. The vertical integration of the three largest insurance companies with the three largest PBMs seems to have trapped the flow of money and services in one big black box. It can be difficult to decide if this transparency gap is a case of missing information, misinformation, or a deliberate hiding of information … or maybe a combination of all three.

Recently, I testified before a Wisconsin State Senate committee about the consequences and potential harm to patients and physician offices caused by mandated “white bagging,” which refers to the process whereby provider-administered drugs are shipped to the provider by a specialty pharmacy, as opposed to the provider buying the drug and billing the insurance company. I was very surprised to hear the large employers testifying against our position.

As I listened to the employer groups, it was clear that their protestations were predominantly focused on hospital billing, where markups on the administered medications can be 500% and upward. It made sense that if a business has a “self-funded” health plan, where the employer pays for the cost of care of the employees, those very high markups on the hospital administered medications would eventually become unsustainable. In addition to paying for the care of employees, employers also pay the health insurance company/PBMs to administer the plan. It is obvious that self-funded businesses are being overwhelmed by all these rising costs. What is not so clear is how much information employers get from their plan administrators on their policies and pricing.

An Employee Benefit Research Institute (ERBI) study examined the difference in prices of health care procedures, labs, and imaging based on site of care. It clearly shows that physicians’ offices are the least expensive overall for infusion therapy, even when compared with home infusion in most cases.

Here is where the missing information and the white-bagging issue intersect. When insurance administrators tell employers that letting the provider “buy and bill” costs an outrageous amount, they fail to tell the employers that physicians’ office prices are comparable, or, in some cases, less than what the employer would pay with white bagging. In addition, the possible harm to patients and to the physicians’ practices are never mentioned to the employer. Here is a list of some of the problems associated with white bagging:

• Delays in patient care when dosages or treatment plans are modified during the patient visit.
• Significant waste of drugs when patients’ treatments change or appointments are rescheduled.
• Unnecessary administrative burden for both the patient and physician, including inventory nightmares.

We see the transparency gap again when formularies are created with higher-priced, branded drugs in place of lower-priced generics and alternatives. How can a PBM explain that a formulary that prefers a $10,000 prostate cancer drug but excludes the $400 generic of that drug actually saves money? If the employer doesn’t know about the generic, no explanation is needed.

When physician offices attempt to override some of these harmful policies, the PBM or insurance company often points the finger at the employer as the culprit responsible for the policy. Often, the employers have no idea of the ramifications of the contracts that they have signed. As health care costs continue to rise, it is important that employers are educated on how they can save money and improve patient care by directly contracting with independent physician practices.

In addition, the Consolidated Appropriation Act of 2020-21 (CAA) “seeks to enforce good value from providers and vendors, and forbids hidden contracting terms that disfavor employers and their employees.” This year and next, the employers will become responsible for transparency reporting and demonstrating cost effectiveness of therapies for their employees. In theory, this should uncover many of the hidden policies that favor only the health plans and not the patients or their employers. Many employers are unaware of the CAA, and vendors are in no hurry to inform them of it.

Not only will the CAA help to eliminate much of the transparency gap in the system, but it may encourage employers to work directly with independent physicians’ offices to provide more cost effective and transparent services for their patients. The Coalition of State Rheumatology Organizations is working on a framework to enable practicing rheumatologists to do exactly this.

In the meantime, we must continue educating employers on white bagging and other policies that harm both their patients and their “bottom line.” This education is just one of the steps needed to rid the health care system of the transparency gap that leads to higher prices and poorer care for all patients.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

It has become increasingly apparent that our health care system is suffering from a severe case of “transparency gap.” There is a lack of transparency at every level of care in the system. Whether it is the hidden rebate/fee kickbacks from drug manufacturers to pharmacy benefit managers (PBMs), or the variability in pricing of imaging and procedures based on site of care, the need for transparency has become acute. The health insurance sector seems to specialize in opaqueness. The vertical integration of the three largest insurance companies with the three largest PBMs seems to have trapped the flow of money and services in one big black box. It can be difficult to decide if this transparency gap is a case of missing information, misinformation, or a deliberate hiding of information … or maybe a combination of all three.

Recently, I testified before a Wisconsin State Senate committee about the consequences and potential harm to patients and physician offices caused by mandated “white bagging,” which refers to the process whereby provider-administered drugs are shipped to the provider by a specialty pharmacy, as opposed to the provider buying the drug and billing the insurance company. I was very surprised to hear the large employers testifying against our position.

As I listened to the employer groups, it was clear that their protestations were predominantly focused on hospital billing, where markups on the administered medications can be 500% and upward. It made sense that if a business has a “self-funded” health plan, where the employer pays for the cost of care of the employees, those very high markups on the hospital administered medications would eventually become unsustainable. In addition to paying for the care of employees, employers also pay the health insurance company/PBMs to administer the plan. It is obvious that self-funded businesses are being overwhelmed by all these rising costs. What is not so clear is how much information employers get from their plan administrators on their policies and pricing.

An Employee Benefit Research Institute (ERBI) study examined the difference in prices of health care procedures, labs, and imaging based on site of care. It clearly shows that physicians’ offices are the least expensive overall for infusion therapy, even when compared with home infusion in most cases.

Here is where the missing information and the white-bagging issue intersect. When insurance administrators tell employers that letting the provider “buy and bill” costs an outrageous amount, they fail to tell the employers that physicians’ office prices are comparable, or, in some cases, less than what the employer would pay with white bagging. In addition, the possible harm to patients and to the physicians’ practices are never mentioned to the employer. Here is a list of some of the problems associated with white bagging:

• Delays in patient care when dosages or treatment plans are modified during the patient visit.
• Significant waste of drugs when patients’ treatments change or appointments are rescheduled.
• Unnecessary administrative burden for both the patient and physician, including inventory nightmares.

We see the transparency gap again when formularies are created with higher-priced, branded drugs in place of lower-priced generics and alternatives. How can a PBM explain that a formulary that prefers a $10,000 prostate cancer drug but excludes the $400 generic of that drug actually saves money? If the employer doesn’t know about the generic, no explanation is needed.

When physician offices attempt to override some of these harmful policies, the PBM or insurance company often points the finger at the employer as the culprit responsible for the policy. Often, the employers have no idea of the ramifications of the contracts that they have signed. As health care costs continue to rise, it is important that employers are educated on how they can save money and improve patient care by directly contracting with independent physician practices.

In addition, the Consolidated Appropriation Act of 2020-21 (CAA) “seeks to enforce good value from providers and vendors, and forbids hidden contracting terms that disfavor employers and their employees.” This year and next, the employers will become responsible for transparency reporting and demonstrating cost effectiveness of therapies for their employees. In theory, this should uncover many of the hidden policies that favor only the health plans and not the patients or their employers. Many employers are unaware of the CAA, and vendors are in no hurry to inform them of it.

Not only will the CAA help to eliminate much of the transparency gap in the system, but it may encourage employers to work directly with independent physicians’ offices to provide more cost effective and transparent services for their patients. The Coalition of State Rheumatology Organizations is working on a framework to enable practicing rheumatologists to do exactly this.

In the meantime, we must continue educating employers on white bagging and other policies that harm both their patients and their “bottom line.” This education is just one of the steps needed to rid the health care system of the transparency gap that leads to higher prices and poorer care for all patients.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is president of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

I am hearing more and more often from colleagues about the number of rheumatologists taking early retirement because of the frustration of having doctor-patient shared decision-making taken out of their hands and given to the insurance companies and their pharmacy benefit managers (PBMs). Often the right medication for the patient is not available on the formulary, causing unnecessary administrative barriers to providing care. When you put that together with the decreased reimbursement and the many obstacles to the “buy-and-bill” model, many rheumatologists have just had enough and called it quits earlier than they thought they would. This is a significant contributor to the growing workforce problem in rheumatology.

Many of the issues affecting the availability of medications happen throughout the development and distribution of a drug treatment – regulatory approval and obstacles to commercial launch, such as patent thickets, “pay for delay,” and other anticompetitive tactics by the manufacturers. And once a medication is launched on to the marketplace, rheumatologists are at the mercy of the health plans and PBMs as to whether, when, and even where a medication can be used. Here is where much of the frustration begins, amplified by the knowledge that profit for the PBM is the driving force behind formulary construction.
 

To support rheumatologists in addressing these challenges, the Coalition of State Rheumatology Organizations started a “Reporting Insurance/Payer Issues” page. Here, rheumatologists can describe issues or complaints they have with payers regarding patient care. The responses we’ve received so far always have a sense of urgency and frustration in the description of whatever obstacle to care is being thrown up by an insurance company or PBM.

One of the recent issues that has arisen via the CSRO’s reporting form involves a new policy for an insurance plan that removes the availability of the intravenous formulation of a medication if it has a subcutaneous (sub Q) formulation. It is a commercial version of the Medicare self-administered drug list, but worse. At least Medicare takes the time to look at the actual usage of a formulation before moving it from Part B to Part D. This new policy flatly states that no patients will have access to the IV formulation until the sub Q formulation has been tried. This includes switching all stable IV patients over to the sub Q formulation. Because the IV formulation is weight based, switching patients from IV to sub Q can reduce their dosage by more than 50%. It appears that loss of disease control is a small price to pay for increased PBM profits (called “savings” by the PBM). Notably, IV medications through physician “buy and bill” offer no revenue to the insurance company, while sub Q medications increase profits through rebates, fees, and other price concessions.

The CSRO outlined these concerns in its Jan. 18, 2022, response to the insurance company’s reply to the coalition’s original letter, urging them to value patients over profits. In this response, the CSRO addressed nonmedical switching, site of care cost, outcome documentation, and grandfathering stable patients, and finished with a discussion on ERISA (Employee Retirement Income Security Act of 1974) protections.

While our Reporting Insurance/Payer Issues form cannot handle reimbursement issues, there needs to be a word about money and profit when it comes to physicians. Physicians whose specialties have few to no procedures, including rheumatologists, rely on office visits and ancillary services such as infusion suites for income. That income sustains their practice and maintains all their attendant expenses. Many of the recent policies put forth by health plans not only intrude on the doctor-patient relationship in treatment decisions, but also reduce reimbursements and place obstacles to “buy and bill,” shifting revenue from the physician to the insurance company.

All these insurance/payer issues boil down to a version of “death by a thousand cuts.” These cuts harm patients and impede rheumatologists’ ability to sustain their practices. They are a type of moral injury (among the many we see in health care providers) that are causing rheumatologists to retire early. Clearly, these issues ultimately affect the workforce. We need advocacy on many levels if we have any hope of dulling the knives that are delivering these “cuts.”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is President of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

I am hearing more and more often from colleagues about the number of rheumatologists taking early retirement because of the frustration of having doctor-patient shared decision-making taken out of their hands and given to the insurance companies and their pharmacy benefit managers (PBMs). Often the right medication for the patient is not available on the formulary, causing unnecessary administrative barriers to providing care. When you put that together with the decreased reimbursement and the many obstacles to the “buy-and-bill” model, many rheumatologists have just had enough and called it quits earlier than they thought they would. This is a significant contributor to the growing workforce problem in rheumatology.

Many of the issues affecting the availability of medications happen throughout the development and distribution of a drug treatment – regulatory approval and obstacles to commercial launch, such as patent thickets, “pay for delay,” and other anticompetitive tactics by the manufacturers. And once a medication is launched on to the marketplace, rheumatologists are at the mercy of the health plans and PBMs as to whether, when, and even where a medication can be used. Here is where much of the frustration begins, amplified by the knowledge that profit for the PBM is the driving force behind formulary construction.
 

To support rheumatologists in addressing these challenges, the Coalition of State Rheumatology Organizations started a “Reporting Insurance/Payer Issues” page. Here, rheumatologists can describe issues or complaints they have with payers regarding patient care. The responses we’ve received so far always have a sense of urgency and frustration in the description of whatever obstacle to care is being thrown up by an insurance company or PBM.

One of the recent issues that has arisen via the CSRO’s reporting form involves a new policy for an insurance plan that removes the availability of the intravenous formulation of a medication if it has a subcutaneous (sub Q) formulation. It is a commercial version of the Medicare self-administered drug list, but worse. At least Medicare takes the time to look at the actual usage of a formulation before moving it from Part B to Part D. This new policy flatly states that no patients will have access to the IV formulation until the sub Q formulation has been tried. This includes switching all stable IV patients over to the sub Q formulation. Because the IV formulation is weight based, switching patients from IV to sub Q can reduce their dosage by more than 50%. It appears that loss of disease control is a small price to pay for increased PBM profits (called “savings” by the PBM). Notably, IV medications through physician “buy and bill” offer no revenue to the insurance company, while sub Q medications increase profits through rebates, fees, and other price concessions.

The CSRO outlined these concerns in its Jan. 18, 2022, response to the insurance company’s reply to the coalition’s original letter, urging them to value patients over profits. In this response, the CSRO addressed nonmedical switching, site of care cost, outcome documentation, and grandfathering stable patients, and finished with a discussion on ERISA (Employee Retirement Income Security Act of 1974) protections.

While our Reporting Insurance/Payer Issues form cannot handle reimbursement issues, there needs to be a word about money and profit when it comes to physicians. Physicians whose specialties have few to no procedures, including rheumatologists, rely on office visits and ancillary services such as infusion suites for income. That income sustains their practice and maintains all their attendant expenses. Many of the recent policies put forth by health plans not only intrude on the doctor-patient relationship in treatment decisions, but also reduce reimbursements and place obstacles to “buy and bill,” shifting revenue from the physician to the insurance company.

All these insurance/payer issues boil down to a version of “death by a thousand cuts.” These cuts harm patients and impede rheumatologists’ ability to sustain their practices. They are a type of moral injury (among the many we see in health care providers) that are causing rheumatologists to retire early. Clearly, these issues ultimately affect the workforce. We need advocacy on many levels if we have any hope of dulling the knives that are delivering these “cuts.”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is President of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

I am hearing more and more often from colleagues about the number of rheumatologists taking early retirement because of the frustration of having doctor-patient shared decision-making taken out of their hands and given to the insurance companies and their pharmacy benefit managers (PBMs). Often the right medication for the patient is not available on the formulary, causing unnecessary administrative barriers to providing care. When you put that together with the decreased reimbursement and the many obstacles to the “buy-and-bill” model, many rheumatologists have just had enough and called it quits earlier than they thought they would. This is a significant contributor to the growing workforce problem in rheumatology.

Many of the issues affecting the availability of medications happen throughout the development and distribution of a drug treatment – regulatory approval and obstacles to commercial launch, such as patent thickets, “pay for delay,” and other anticompetitive tactics by the manufacturers. And once a medication is launched on to the marketplace, rheumatologists are at the mercy of the health plans and PBMs as to whether, when, and even where a medication can be used. Here is where much of the frustration begins, amplified by the knowledge that profit for the PBM is the driving force behind formulary construction.
 

To support rheumatologists in addressing these challenges, the Coalition of State Rheumatology Organizations started a “Reporting Insurance/Payer Issues” page. Here, rheumatologists can describe issues or complaints they have with payers regarding patient care. The responses we’ve received so far always have a sense of urgency and frustration in the description of whatever obstacle to care is being thrown up by an insurance company or PBM.

One of the recent issues that has arisen via the CSRO’s reporting form involves a new policy for an insurance plan that removes the availability of the intravenous formulation of a medication if it has a subcutaneous (sub Q) formulation. It is a commercial version of the Medicare self-administered drug list, but worse. At least Medicare takes the time to look at the actual usage of a formulation before moving it from Part B to Part D. This new policy flatly states that no patients will have access to the IV formulation until the sub Q formulation has been tried. This includes switching all stable IV patients over to the sub Q formulation. Because the IV formulation is weight based, switching patients from IV to sub Q can reduce their dosage by more than 50%. It appears that loss of disease control is a small price to pay for increased PBM profits (called “savings” by the PBM). Notably, IV medications through physician “buy and bill” offer no revenue to the insurance company, while sub Q medications increase profits through rebates, fees, and other price concessions.

The CSRO outlined these concerns in its Jan. 18, 2022, response to the insurance company’s reply to the coalition’s original letter, urging them to value patients over profits. In this response, the CSRO addressed nonmedical switching, site of care cost, outcome documentation, and grandfathering stable patients, and finished with a discussion on ERISA (Employee Retirement Income Security Act of 1974) protections.

While our Reporting Insurance/Payer Issues form cannot handle reimbursement issues, there needs to be a word about money and profit when it comes to physicians. Physicians whose specialties have few to no procedures, including rheumatologists, rely on office visits and ancillary services such as infusion suites for income. That income sustains their practice and maintains all their attendant expenses. Many of the recent policies put forth by health plans not only intrude on the doctor-patient relationship in treatment decisions, but also reduce reimbursements and place obstacles to “buy and bill,” shifting revenue from the physician to the insurance company.

All these insurance/payer issues boil down to a version of “death by a thousand cuts.” These cuts harm patients and impede rheumatologists’ ability to sustain their practices. They are a type of moral injury (among the many we see in health care providers) that are causing rheumatologists to retire early. Clearly, these issues ultimately affect the workforce. We need advocacy on many levels if we have any hope of dulling the knives that are delivering these “cuts.”

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is President of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

As 2021 winds down, I reflect on the achievements the rheumatology community has had in the realm of advocacy throughout the year. And there were many: Seven states signed accumulator program bans into law, five states reformed the use of step therapy protocols, Texas passed an innovative “gold carding” law to reduce the burden of prior authorization, and West Virginia passed a rebate pass-through law to directly assist patients with high out-of-pocket costs – the first of its kind in the nation.

Of course, the close of another year also means gearing up for the year ahead. The majority of state legislatures are getting ready to open legislative sessions in the New Year. This means a year of new opportunities and new challenges. As a community, there are some key areas rheumatology will need to focus on during the course of the upcoming year as policy makers return to the business of policy making.

Many in the rheumatology community are aware that the buy and bill acquisition system has come under threat in recent years, mainly from payer mandates to use the alternative white bagging model. In some cases, payers have gone as far as to mandate the practice of “brown bagging,” or home infusion. These practices can endanger patient safety and overall quality of care. A study led by Matthew Baker, MD, of Stanford (Calif.) University found that biologic infusions administered at home, compared with those administered at a facility, were associated with increased adverse events requiring escalation of care; specifically, home infusions were associated with 25% increased odds of ED or hospital admission on the same or next day after infusion, compared with facility infusions, and 28% increased odds of permanent discontinuation of the biologic after emergency department or hospital admission. Additionally, site-of-care research by Paul Fronstin, PhD, at Employee Benefit Research Institute clearly shows that in-office infusion with physician supervision is far more cost effective than hospital and, in some cases, home infusion as well.

Further, the metastasis of these payer mandates is likely to severely limit availability of and access to care. It is unclear whether outpatient infusion, especially in private rheumatology practices, will prove sustainable in a world of white bagging. The net result of an expansion of the white-bagging requirements may well be broad access challenges that inconvenience patients deeply and irresponsibly.

The expansion of these mandates has not come without pushback, and rheumatologists should be prepared to advocate for policy that prohibits payers from mandating the use of white bagging, brown bagging, and home infusion. It is abundantly clear that arguments of safety and cost effectiveness are sufficient grounds for policy makers to curtail the mandatory use of these practices.

Similar to white bagging, another key issue in the year ahead is formulary construction based on the rebate system and proposed policies to address its attendant problems. Propagated by pharmacy benefit managers (PBMs), the rebate-based, or kickback, system of formulary construction often rewards higher-priced drugs with preferred placement regardless of whether they are the best and most affordable medications for our patients. A few states are beginning to address the affordability issue by mandating that the rebate/kickback acquired by the PBM be passed back to the patient at the point of sale. West Virginia passed a first-of-its-kind law to ensure that patients who generate drug rebates benefit from them by requiring that their cost shares are reduced by an amount equivalent to the rebate received by a health plan. This policy does not get at the root of the formulary construction problem, but if it is adopted more broadly across the country, it will deliver direct relief to patients who are struggling with out-of-pocket costs associated with prescription drugs. I anticipate that this will be a prominent issue nationwide during the upcoming year with opportunity for rheumatologists to lend their voices.

Many of the rheumatology community’s longstanding issues persist, and while progress has been made, more work remains to be done. Whether it’s accumulator programs, prior authorization, nonmedical switching, or step therapy, there will be opportunities in almost every state to engage in improving our ability to provide excellent care to our patients.

We tend to be motivated into action when one of these individual issues appear in our own state’s legislature; however, consistency of engagement is also important. While it is important to talk to your legislators when you need them to vote a certain way on a certain bill, scheduling a meeting with them or sending them a message detailing some of the issues that the rheumatology community faces before legislatures return in full swing is equally important to establish the relationship.

By making “rheum for action” now, you’ll have more impact when legislation relevant to our daily work does appear in the state legislatures. You can find your state representatives at the Coalition for State Rheumatology Organization’s Action Center.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is President of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

As 2021 winds down, I reflect on the achievements the rheumatology community has had in the realm of advocacy throughout the year. And there were many: Seven states signed accumulator program bans into law, five states reformed the use of step therapy protocols, Texas passed an innovative “gold carding” law to reduce the burden of prior authorization, and West Virginia passed a rebate pass-through law to directly assist patients with high out-of-pocket costs – the first of its kind in the nation.

Of course, the close of another year also means gearing up for the year ahead. The majority of state legislatures are getting ready to open legislative sessions in the New Year. This means a year of new opportunities and new challenges. As a community, there are some key areas rheumatology will need to focus on during the course of the upcoming year as policy makers return to the business of policy making.

Many in the rheumatology community are aware that the buy and bill acquisition system has come under threat in recent years, mainly from payer mandates to use the alternative white bagging model. In some cases, payers have gone as far as to mandate the practice of “brown bagging,” or home infusion. These practices can endanger patient safety and overall quality of care. A study led by Matthew Baker, MD, of Stanford (Calif.) University found that biologic infusions administered at home, compared with those administered at a facility, were associated with increased adverse events requiring escalation of care; specifically, home infusions were associated with 25% increased odds of ED or hospital admission on the same or next day after infusion, compared with facility infusions, and 28% increased odds of permanent discontinuation of the biologic after emergency department or hospital admission. Additionally, site-of-care research by Paul Fronstin, PhD, at Employee Benefit Research Institute clearly shows that in-office infusion with physician supervision is far more cost effective than hospital and, in some cases, home infusion as well.

Further, the metastasis of these payer mandates is likely to severely limit availability of and access to care. It is unclear whether outpatient infusion, especially in private rheumatology practices, will prove sustainable in a world of white bagging. The net result of an expansion of the white-bagging requirements may well be broad access challenges that inconvenience patients deeply and irresponsibly.

The expansion of these mandates has not come without pushback, and rheumatologists should be prepared to advocate for policy that prohibits payers from mandating the use of white bagging, brown bagging, and home infusion. It is abundantly clear that arguments of safety and cost effectiveness are sufficient grounds for policy makers to curtail the mandatory use of these practices.

Similar to white bagging, another key issue in the year ahead is formulary construction based on the rebate system and proposed policies to address its attendant problems. Propagated by pharmacy benefit managers (PBMs), the rebate-based, or kickback, system of formulary construction often rewards higher-priced drugs with preferred placement regardless of whether they are the best and most affordable medications for our patients. A few states are beginning to address the affordability issue by mandating that the rebate/kickback acquired by the PBM be passed back to the patient at the point of sale. West Virginia passed a first-of-its-kind law to ensure that patients who generate drug rebates benefit from them by requiring that their cost shares are reduced by an amount equivalent to the rebate received by a health plan. This policy does not get at the root of the formulary construction problem, but if it is adopted more broadly across the country, it will deliver direct relief to patients who are struggling with out-of-pocket costs associated with prescription drugs. I anticipate that this will be a prominent issue nationwide during the upcoming year with opportunity for rheumatologists to lend their voices.

Many of the rheumatology community’s longstanding issues persist, and while progress has been made, more work remains to be done. Whether it’s accumulator programs, prior authorization, nonmedical switching, or step therapy, there will be opportunities in almost every state to engage in improving our ability to provide excellent care to our patients.

We tend to be motivated into action when one of these individual issues appear in our own state’s legislature; however, consistency of engagement is also important. While it is important to talk to your legislators when you need them to vote a certain way on a certain bill, scheduling a meeting with them or sending them a message detailing some of the issues that the rheumatology community faces before legislatures return in full swing is equally important to establish the relationship.

By making “rheum for action” now, you’ll have more impact when legislation relevant to our daily work does appear in the state legislatures. You can find your state representatives at the Coalition for State Rheumatology Organization’s Action Center.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is President of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.

As 2021 winds down, I reflect on the achievements the rheumatology community has had in the realm of advocacy throughout the year. And there were many: Seven states signed accumulator program bans into law, five states reformed the use of step therapy protocols, Texas passed an innovative “gold carding” law to reduce the burden of prior authorization, and West Virginia passed a rebate pass-through law to directly assist patients with high out-of-pocket costs – the first of its kind in the nation.

Of course, the close of another year also means gearing up for the year ahead. The majority of state legislatures are getting ready to open legislative sessions in the New Year. This means a year of new opportunities and new challenges. As a community, there are some key areas rheumatology will need to focus on during the course of the upcoming year as policy makers return to the business of policy making.

Many in the rheumatology community are aware that the buy and bill acquisition system has come under threat in recent years, mainly from payer mandates to use the alternative white bagging model. In some cases, payers have gone as far as to mandate the practice of “brown bagging,” or home infusion. These practices can endanger patient safety and overall quality of care. A study led by Matthew Baker, MD, of Stanford (Calif.) University found that biologic infusions administered at home, compared with those administered at a facility, were associated with increased adverse events requiring escalation of care; specifically, home infusions were associated with 25% increased odds of ED or hospital admission on the same or next day after infusion, compared with facility infusions, and 28% increased odds of permanent discontinuation of the biologic after emergency department or hospital admission. Additionally, site-of-care research by Paul Fronstin, PhD, at Employee Benefit Research Institute clearly shows that in-office infusion with physician supervision is far more cost effective than hospital and, in some cases, home infusion as well.

Further, the metastasis of these payer mandates is likely to severely limit availability of and access to care. It is unclear whether outpatient infusion, especially in private rheumatology practices, will prove sustainable in a world of white bagging. The net result of an expansion of the white-bagging requirements may well be broad access challenges that inconvenience patients deeply and irresponsibly.

The expansion of these mandates has not come without pushback, and rheumatologists should be prepared to advocate for policy that prohibits payers from mandating the use of white bagging, brown bagging, and home infusion. It is abundantly clear that arguments of safety and cost effectiveness are sufficient grounds for policy makers to curtail the mandatory use of these practices.

Similar to white bagging, another key issue in the year ahead is formulary construction based on the rebate system and proposed policies to address its attendant problems. Propagated by pharmacy benefit managers (PBMs), the rebate-based, or kickback, system of formulary construction often rewards higher-priced drugs with preferred placement regardless of whether they are the best and most affordable medications for our patients. A few states are beginning to address the affordability issue by mandating that the rebate/kickback acquired by the PBM be passed back to the patient at the point of sale. West Virginia passed a first-of-its-kind law to ensure that patients who generate drug rebates benefit from them by requiring that their cost shares are reduced by an amount equivalent to the rebate received by a health plan. This policy does not get at the root of the formulary construction problem, but if it is adopted more broadly across the country, it will deliver direct relief to patients who are struggling with out-of-pocket costs associated with prescription drugs. I anticipate that this will be a prominent issue nationwide during the upcoming year with opportunity for rheumatologists to lend their voices.

Many of the rheumatology community’s longstanding issues persist, and while progress has been made, more work remains to be done. Whether it’s accumulator programs, prior authorization, nonmedical switching, or step therapy, there will be opportunities in almost every state to engage in improving our ability to provide excellent care to our patients.

We tend to be motivated into action when one of these individual issues appear in our own state’s legislature; however, consistency of engagement is also important. While it is important to talk to your legislators when you need them to vote a certain way on a certain bill, scheduling a meeting with them or sending them a message detailing some of the issues that the rheumatology community faces before legislatures return in full swing is equally important to establish the relationship.

By making “rheum for action” now, you’ll have more impact when legislation relevant to our daily work does appear in the state legislatures. You can find your state representatives at the Coalition for State Rheumatology Organization’s Action Center.

Dr. Feldman is a rheumatologist in private practice with The Rheumatology Group in New Orleans. She is President of the CSRO, past chair of the Alliance for Safe Biologic Medicines, and a past member of the American College of Rheumatology insurance subcommittee. You can reach her at rhnews@mdedge.com.