When treating patients with complex health care needs, particularly those living with cancer, time is of the essence. So, too, is access to personalized medicine.
Clinical decisions regarding the specific treatments, therapies, and medications used in the course of oncological care should be patient centered, physician driven, and evidence based. That is why community oncology practices, in partnership with The US Oncology Network and the National Comprehensive Cancer Network, developed a set of evidence-based, physician-led Value Pathways to improve the quality of cancer care and significantly reduce costs.1
Unfortunately, not everyone shares these values. Cost-containing measures and profit-driven decisions made by health insurers, as well as their affiliated pharmacy benefit managers (PBMs) and specialty pharmacies, often dictate the care patients receive. Utilization management policies put in place by insurers and PBMs come at the expense of timely access to high-quality care for some of our nation’s most vulnerable, at-risk patient groups.
This problem will only get worse if major insurance companies continue to consolidate, leaving America’s patients with fewer choices and control over their care.
Over the years, policy decisions have accelerated the vertical integration between major health care insurers, PBMs, and specialty pharmacies, creating a distorted marketplace that is less driven by patient outcomes than it is by profit margins.2 With many insurers maintaining vertical business relationships with their own PBMs and specialty pharmacies, it is not surprising that internal policies would favor their affiliated businesses, but that doesn’t make it any less of a conflict of interest—or a threat to patient care.
Purported to drive cost efficiencies, insurer utilization management practices are increasingly putting the lives of Americans with cancer and other chronic, debilitating illnesses at risk. By delaying access to personalized, timely care and evidence-based treatments, these policies worsen patient outcomes and contribute to disease progression.
Federal action sadly has been limited. Fortunately, states are taking it upon themselves to rein in some of the most egregious insurer and PBM practices to protect patients and preserve access to personalized care through a variety of legislative reform efforts.
In Texas, state legislators passed the country’s first “gold carding” legislation to address the longstanding problem of prior authorization, which requires physicians to seek insurers’ approval before performing a service or prescribing a treatment the patient needs.3 Designed to help health plans control costs, prior authorization has become an overused, convoluted, and costly process that delays patient access to physician-prescribed care.
Seeing the problems this process has created for patients and providers alike, 2 Republican Texas legislators who also are physicians—state Representative Greg Bonnen, MD, and state Senator Dawn Buckingham, MD—came together to advance House Bill 3459 to minimize the impact of prior authorization in the state.4 Under the law, physicians who maintain a 90% prior authorization approval rating over a 6-month period for a given service or treatment are able to earn a gold card, which exempts them from future prior authorization requirements for those services.
The Texas law has inspired other states to consider similar legislation, including Arkansas, Connecticut, Kentucky, Mississippi, and New York.5 A milestone in the nationwide effort to reform this outdated, inefficient process, Texas House Bill 3459 has given new hope to state-based medical associations working on similar prior authorization reform efforts.
Similarly, in Pennsylvania, state legislators recently passed a prior authorization reform bill (Senate Bill 225)6 that will “require insurers to provide timely approval for both non-urgent and emergency healthcare services to physicians before services and treatment plans are rendered,” according to the bill’s sponsor, Republican state Senator Kristin Phillips-Hill.7
The new law also creates a timely, well-defined process for appeals determinations and calls for a peer-review process by physicians in the same or similar specialty if an insurer questions the necessity of a given service or treatment. To help prevent potentially dangerous delays in care, prior authorization decisions must now be communicated to the requesting provider within 2 business days of issuing the request.
At the federal level, Congress has introduced gold card legislation,8 and the House of Representatives unanimously passed the Improving Seniors’ Timely Access to Care Act,9 which would create important safeguards and streamline the prior authorization process under Medicare Advantage.
Though these were ultimately not included in the end-of-year legislative package and are likely to be reintroduced in the 118th US Congress, the Biden administration released 2 proposed rules in December that, if finalized, will facilitate greater information sharing and speed up the prior authorization process.10
Senate Bill 225 in Pennsylvania also addresses another utilization management policy that threatens patient care: step therapy.7 Often referred to as “fail first” policies, step therapy is a process in which insurers require patients to try using their preferred prescription drug or therapy to manage a condition before being allowed to try the physician-recommended drug—even if a physician believes the insurer-preferred treatment would lead to less successful outcomes. Although it can improve insurer profitability, step therapy also can delay care for patients. The new law streamlines step therapy protocols and establishes options for patients and physicians to obtain exceptions to these arcane guidelines in order to deliver the best, most effective care possible.
As of September 2022, nearly two-thirds of states had passed patient-protection legislation providing override exceptions to step therapy.11 These measures take into consideration patients’ medical history as well as their experience with previous drug therapies while also establishing a transparent timeline to hold insurers accountable for responding to step therapy exception requests in a timely manner.
Congress also has been working on bipartisan solutions to address step therapy. The bipartisan Safe Step Act, for example, would require group health plans to grant exceptions to step therapy under certain circumstances and require exemption requests to be processed within 72 hours unless a patient’s life is at risk, in which case the deadline is 24 hours.12
The third example of a utilization management policy insurers use to increase profits at the expense of patient care is mandatory vendor imposition, otherwise known as “white bagging.”13 Similar to the “brown bagging” practice of dispensing a specialty drug directly to the patient who then transports the drug to their physician’s office, white bagging is an arrangement through which a health insurer requires a prescribed drug, therapy, or treatment to be purchased from and prepared by their own specialty pharmacy, which then ships the drug to the physician’s office to be administered to the patient.
Although this system may improve profitability for insurance companies, it does not automatically translate to lower prices for patients. In fact, white bagging can actually increase costs both for patients and providers while leading to lengthy delays in care, drug waste, and the possibility of a number of treatment errors. This is particularly true in the case of patients with cancer, who require highly personalized treatments that can and often do change rapidly.
Oncologists complete a pretreatment evaluation for patients with cancer prior to every treatment because many patients’ chemotherapy dosages must be changed during their course of treatments—their dosage may be adjusted higher or lower depending on that individual’s health, expected adverse effects, or disease progression. However, under a white- bagging policy, physicians are unable to make these adjustments, even if they have plenty of the needed medication in stock at their practice.
That is because white-bagging policies require community oncologists to place a new, updated order with the insurer. Consequently, patients must find another time to come back for their treatments. This can create delays in treatment of days or even weeks depending on how long the new order takes and the availability of appointments. It also means the white-bagged medication originally ordered must be thrown away because it was prepared for a specific patient. This leads to massive amounts of drug waste.
Fortunately, many state legislatures are working to address this issue by prohibiting insurers and PBMs from mandating white-bagging policies.
Louisiana, Arkansas, and Virginia have passed legislation so providers cannot be denied payment for physician-administered drugs and services that are covered by a patient’s insurance.14-16 These policies help ensure patients with cancer—and others who rely on infusion treatments, including patients with multiple sclerosis or some rheumatologic conditions—are able to receive the highly personalized care they need from the physicians who know their health history and can make those last-minute, day-of-treatment updates to their dosage when necessary. Multiple states have filed similar legislation to address white bagging as part of a larger, nationwide effort to reform PBM practices.17
These state-level bills are important because they offer Congress a framework from which to craft federal legislation to address white bagging.
Additionally, in 2022, Texas legislators passed House Bill 1919, a bill that protects patient choice by preventing insurers and PBMs from engaging in “steering,”18 a similar practice in which insurers and PBMs steer patients toward using their affiliated pharmacies and providers, regardless of whether they are the most convenient or best value option for patients. The bill also prohibits insurers from sharing a patient’s prescription or pharmacy information with their affiliated pharmacy for commercial purposes such as advertising or marketing.
Much of the progress states are making to reform and regulate PBMs is due to the 2020 US Supreme Court decision in Rutledge, Attorney General of Arkansas v Pharmaceutical Care Management Association (PCMA), which granted states more jurisdictional flexibility to govern certain PBM activities.19 Specifically, Rutledge resulted from a 2015 Arkansas law that required PBMs to reimburse pharmacies at a price equal to or higher than the pharmacy’s wholesale cost, among other provisions. This law applied to all transactions between PBMs and pharmacies, including transactions where the PBM was acting on behalf of a self-insured Employee Retirement Income Security Act (ERISA) plan. Under US Supreme Court precedent, a state law is preempted if it has a “reference to” or an “impermissible connection with” the ERISA plans. In that case, the ideologically divided court ruled unanimously that ERISA does not preempt an Arkansas state law regulating PBMs. As a result, the ruling affirmed that states have the authority to enact legislative reform efforts addressing the high cost of prescription drugs by targeting insurers and PBMs. Importantly, the Texas Department of Insurance indicated that the state’s new law against steering applies to “all health plans” with only certain exceptions—essentially taking the position that it is enforceable against ERISA, just like the Arkansas law in Rutledge v PCMA.
At the federal level, the Federal Trade Commission launched an investigation into PBM practices in June 2022.20 Government oversight of PBMs’ steering practices—and other policies that harm patient access and drive up costs—is likely to be a focus of the 118th Congress as several lawmakers have indicated they plan to prioritize drug pricing policies in the year ahead.
Patients and Providers Are Energized to Go Further
All of these important patient protections are the result of energized advocates who believe health care decisions are best made in a doctor’s office, not a board room. Perhaps recognizing this, Federal Trade Commission Chair Lina M. Khan has commented on the need to stop anticompetitive behavior from insurance companies and PBMs “through the democratic process.”21
We agree, and we are heartened by the patients and physicians who continue pushing for reforms at both the federal and state levels. By working hand in hand with lawmakers and policy makers, advocates can help shape policies that ensure more patients across the country can access the personalized care and treatments they need when they need them. Recent reforms to prior authorization, step therapy, white-bagging, and pharmacy steering are just the beginning. In 2023 and beyond, we will continue to work for policies that put timely health care decision-making back into the hands of patients and their doctors.
Angela Storseth-Cooper is director of government relations for The US Oncology Network; Lalan Wilfong, MD, is a medical oncologist and vice president of payer solutions and practice transformation, The US Oncology Network.
1. Value Pathways powered by NCCN—Oncology Clinical Pathways. McKesson. Accessed January 3, 2023. https://www.mckesson.com/Specialty/Oncology-Pathways/
2. Fein AJ. Mapping the vertical integration of insurers, PBMs, specialty pharmacies, and providers: a 2022 update. Drug Channels. October 13, 2022. Accessed January 3, 2023. https://www.drugchannels.net/2022/10/mapping-vertical-integration-of.html
3. Freer E. What’s next for prior authorization: Texas’ ‘Gold Card’ law winds through rulemaking. Texas Medical Association. Updated June 29, 2022. Accessed January 15, 2023. https://www.texmed.org/Template.aspx?id=59701
4. Texas House Bill 3459. 87th Legislature, 2021-2022. Accessed January 15, 2023. https://capitol.texas.gov/tlodocs/87R/billtext/html/HB03459F.htm.
5. Berlin J. The new gold rush: Texas’ prior authorization law sets a precedent for other states. Texas Medical Association. Updated June 29, 2022. Accessed January 15, 2023. https://www.texmed.org/GoldRush/
6. Wenner D. Patients won’t have to wait so long for insurance company approval under new law in Pa. PennLive. October 27, 2022. Accessed January 15, 2023. http://bit.ly/3GOvWlk
7. Senate approves significant health care overhaul on prior authorization, step therapy. Senator Kristin Phillips-Hill. June 29, 2022. Accessed January 16, 2023. http://bit.ly/3ISlOuH
8. ICYMI: Burgess oped: ‘Gold card’ approach streamlines burdensome prior authorization. Congressman Michael C. Burgess, MD. September 20, 2022. Accessed January 16, 2023. http://bit.ly/3CT2wBl
9. House unanimously passes bill to improve care for 28M seniors, cut red tape. US Congresswoman Suzan DelBene. September 14, 2022. Accessed January 16, 2023. http://bit.ly/3iINnMi
10. CMS proposes rule to expand access to health information and improve prior authorization process. News release. CMS. December 6, 2022. Accessed January 16, 2023. http://bit.ly/3kqcV0U
11. National Psoriasis Foundation. Step therapy legislation by state. Updated January 2023. Accessed January 16, 2023. https://www.steptherapy.com/step-therapy-legislation-by-state/
12. Ruiz, bipartisan doctors in Congress introduce Safe Step Act to require insurance companies to put patients’ health first. News release. Congressman Dr Raul Ruiz. March 26, 2021. Accessed January 16, 2023. http://bit.ly/3w5V9D5
13. Caffrey M. Why white-bagging is a symptom of high drug costs, and what states are doing. The American Journal of Managed Care®. April 3, 2022. Accessed January 16, 2023. https://www.ajmc.com/view/why-white-bagging-is-a-symptom-of-high-drug-costs-and-what-states-are-doing
14. RS 22:1020.53. Louisiana State Legislature. June 1, 2021. Accessed January 16, 2023. http://legis.la.gov/legis/Law.aspx?d=1240068
15. Arkansas House Bill 1907. 93rd General Assembly. April 22, 2021. Accessed January 16, 2023. https://bit.ly/3CTRFHz
16. Code of Virginia. § 38.2-3407.7. Pharmacies; freedom of choice. Accessed January 16, 2023. https://law.lis.virginia.gov/vacode/title38.2/chapter34/section38.2-3407.7/
17. Pharmacy benefit manager reform. National Conference of State Legislatures. Updated June 1, 2022. Accessed January 16, 2023. https://www.ncsl.org/health/pharmacy-benefit-manager-reform
18. House Bill 1919. 87th Texas Legislature, 2021-2022. Accessed January 16, 2023. https://capitol.texas.gov/tlodocs/87R/billtext/html/HB01919F.HTM
19. Fuse Brown EC, McCuskey EY. The implications of Rutledge v. PCMA for state health care cost regulation. Health Affairs. December 17, 2020. Accessed January 16, 2023. https://www.healthaffairs.org/do/10.1377/forefront.20201216.909942
20. FTC launches inquiry into prescription drug middlemen industry. Federal Trade Commission. June 7, 2022. Accessed January 16, 2023. https://www.ftc.gov/news-events/news/press-releases/2022/06/ftc-launches-inquiry-prescription-drug-middlemen-industry
21. Remarks of Chair Lina M. Khan at the American Economic Liberties Project and the National Community Pharmacists Association. How Pharmacy Benefit Managers Impact Drug Prices, Communities, and Patients. Federal Trade Commission. June 22, 2022. Accessed January 16, 2023. http://bit.ly/3WenJN1