Bill aims to stop specialty tier prescription drug costs

From: Carolyn Johnson, ABC7 San Francisco, CA 

Follow the above link for a video or click here.

SAN FRANCISCO (KGO) — There’s a new trend in health insurance to pass along the costs of the highest price medications to patients. Instead of a co-pay, patients are finding expensive drugs for cancer, arthritis and multiple sclerosis can cost them hundreds, even thousands of dollars out of pocket each month, but a Bay Area lawmaker is working to change that.

 

“My neurologist said, ‘You need to let your insurance company know that every day that goes by that you don’t take this drug, they are costing you neurological function,’” said MS patient Melanie Rowen.

That drug Rowen needed to manage her MS cost her nearly $700 a month. Her insurance classified it as a specialty tier drug, also known as Tier 4. That means she pays 30 percent of the cost of the drug rather than a simple co-pay.

When asked how she made it work financially, Rowen said, “I went into credit card debt.”

“What we’re hearing is things such as, ‘What do I do? Do I pay my mortgage?’ or ‘Do I go into debt?’ which is a common thing, people are going into debt or they’re going without some of the essentials of life,” said Stewart Ferry, the public policy director for the National MS Society.

Of the 12 most common Tier 4 drugs, four are used to treat MS.

“They’re just so frustrated because they’re paying their premiums and this runs completely counter to what insurance is supposed to be about, which is equitably spreading the risk. So this is antithetical to the very nature of insurance,” said Ferry.

Specialty tier pricing started under Medicare Part D. Michelle Vogel is executive director of the Alliance for Plasma Therapies and has been tracking the impact.

“Whatever happens with Medicare typically follows in private insurance, so when I was looking at the private plans, and especially in California, you’re seeing the majority of plans have put in Tier 4 plans,” said Vogel.

There’s a wide range of illnesses and diseases impacted by this change: cancer, rheumatoid arthritis, even hemophilia and organ transplantation.

“If you get a transplant, but the anti-rejection drug is too expensive to pay for, then why bother transplanting to begin with? You’ll die without that organ,” said Vogel.

“Sixty-one percent of Americans take some sort of prescription medication a day. So it is alarming when health plans are reclassifying drugs into a new Tier 4 category,” said Assm. Fiona Ma, D-San Francisco.

Ma is proposing legislation in California to prevent health insurers from moving vital medications to Tier 4 status.

“What we’re trying to do is make sure that patients are able to afford the medication they need. So we are going to look at a cap system as well as cost containment for the individuals who are on medication,” said Ma.

“What the cost is of a given drug starts with the manufacturer. We ought to look there and then both the health plan and the individual have roles to play in contributing to the cost of the drug,” said Patrick Johnston, CEO of the California Association of Health Plans.

Johnston is concerned about legislation that prevents cost sharing.

“If we have a drug co-pay that is tiered, then we can control the cost and make it more likely that more people can afford insurance,” said Johnston.

But a growing number of patients like Rowen are finding themselves facing a huge financial burden simply to get the drugs their doctors have prescribed.

“The stakes are high and nobody who has any choice about it is going to choose not to take them. It’s absolutely out of the question,” said Rowen.

Right now, New York is the only state with a law preventing specialty tiers. Ma plans to announce the specifics of her legislation on Thursday. However, state legislation does not impact self-funded health plans which cover about half of all employees with health insurance. Federal legislation is needed to change that.

(Copyright ©2011 KGO-TV/DT. All Rights Reserved.)

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Where did the “Specialty” in specialty Pharmacy go?

The decline of the specialty pharmacy

By Mina Kimes, writerOctober 25, 2010: 12:57 PM ET

FORTUNE — When Elizabeth Purvis’ son Tater was born last year with hemophilia, she had a wide range of pharmacies available to her through her pharmaceutical benefits manager (PBM), Express Scripts. Because the clotting medicine Tater takes to prevent excessive bleeding is rare and difficult to administer, she can’t get it at her local pharmacy; it is only sold at so-called specialty pharmacies, which also offer nursing services. Two months later, Express Scripts dropped the pharmacy she chose, Coram, from its network, and sent her a letter with three choices. The first, “Hemophilia of the Sunshine State,” was an out-of-state pharmacy she had never heard of. She later found out that it was owned by Express Scripts.

“They were pushing for all of us to use Express Scripts,” says Purvis, who lobbied for a local alternative and eventually found a nearby provider that could bill Tricare, the health insurer for military families (her husband is in the Army). “The little branches are able to provide so much more for us,” she explains, adding that she was apprehensive of depending on a large mail order operation based in another part of the country. “I didn’t just want to be another number in Express Scripts’ rolodex,” she says.

Specialty drugs, which treat rare diseases such as hemophilia, cancer, and multiple sclerosis, are one of the fastest-growing–and most lucrative–areas of healthcare. Due to their small patient volume (there are about 20,000 hemophiliacs in the U.S., compared to some 37 million people with high cholesterol) and complex manufacturing requirements, specialty treatments can cost tens of thousands of dollars. According to the 2010 Drug Trend Report put out by Medco, one of the country’s biggest PBMs, specialty drug prices climbed 14.7% last year, while regular brand-name drugs increased 9.2%.

Over the last decade, PBMs, which act as middlemen between retail pharmacies and employers or insurers, have started selling drugs, too; mostly through their massive mail order units, but also via their in-house specialty pharmacies. The big three companies–Express Scripts (ESRX, Fortune 500), CVS (CVS, Fortune 500) Caremark, and Medco (MHS, Fortune 500)–have all expanded their rare drug operations. When speaking about specialty drugs at a conference in June, Express Scripts CEO George Paz said: “This is going to be the growth driver.”

Are PBM’s steering customers away from speciality pharmacies?

Such pronouncements are worrisome to the owners of specialty pharmacies, who accuse the PBM industry of exploiting its position to capture more business. Russell Gay, the chairman of the Independent Specialty Pharmacy Coalition, says it is unfair that pharmaceutical benefits managers, who are supposed to evaluate drug transactions on behalf of payers, are also the ones executing those transactions. “How can you provide a check and balance against your own company?” he asks.

The shift has also affected clinics. Joe Pugliese, the head of the Hemophilia Alliance, a coalition of 83 federally funded, non-profit treatment centers, says the big PBMs have moved in recent months to shut out the centers from selling drugs, which he says they need to do to sustain their operations. “It is increasingly difficult for treatment centers to remain in network,” he says.

Dr. Steven Miller, the chief medical officer at Express Scripts, says that, while it is true that PBMs sometimes direct patients to their own specialty pharmacies, they do so because it’s in the best interests of customers and payers. “We’re looking for pharmacies that have the clinical expertise to support our patients, and also the buying power and systems to keep costs appropriate,” he says. “Many of the local specialty pharmacies can often match the safety factor…but often times they’re still not competitive from a cost standpoint.”

“The best confirmation is the marketplace,” says Mark Merritt, the CEO of the Pharmaceutical Care Management Association, which represents PBMs. Merritt points out that payers are sophisticated buyers who hire consultants to evaluate the plans.

But the savings generated by PBMs can be murky, even to experienced payers, says Terri Bernacchi, an analyst at healthcare research firm IMS who previously directed Wisconsin’s Blue Cross program. “Sometimes when mail order is promoted to a health plan, they don’t understand the implications from a cost perspective,” she says. “It’s like a big algebra equation.”

The new healthcare reform law calls for PBMs that participate in state insurance exchange to disclose detailed information on their pricing mechanisms and savings rates. The clause has become a battle ground issue for community pharmacists, who support it, and representatives of the PBM industry, who say it would hurt competition.

PBMs argue that they can cut costs because their networks are bigger and more efficient. Their specialty pharmacies also offer phone hotlines and contract with nurses who make home visits. But some specialty drug patients say that, given the nature of their illnesses, they need greater choice and personalized attention.

Purvis wasn’t the only Express Scripts member who saw her options whittled down after Tricare altered its agreement with the PBM last year. Hemophiliac patients and parents around the country received similar letters, and many were forced to switch providers. Though Express Scripts later widened the network, some customers, like Tricare member Colleen Pascua, still say their choices are insufficient.

Pascua, whose nine year old son has hemophilia and receives injections through a catheter embedded in his chest, lives in Redding, Calif., a rural town that is about two and a half hours away from Sacramento. When her son outgrows his catheter, she says, she will need the help of a nurse to inject medicine directly into his veins. But the only nurse in her area works for Accredo, which is owned by Express Scripts rival Medco and is not on her list of in-network providers.

Express Scripts says it accepts out-of-network requests, but doing so would require Pascua to pay a steep co-payment on a drug that she says costs some $20,000 a month. A spokesman for Express Scripts wrote in an email: “In the tough economic climate, some of our clients are having to make difficult decisions, including restricting their networks.” Tricare, Pascua’s insurance plan, did not immediately respond to requests for comment.

Pascua is skeptical of the PBM’s motives for changing her options. “They’re funneling all of these specialty patients because they want their business,” she says. “It’s a fox in the henhouse. They want to wipe out their competition.”

From CNNMoney.com

Affordable Care Act

Key Health Law Provisions Begin Sept. 23

By Michelle Andrews
From Kaiser Health News 
Sep 14, 2010

For many years, Ric and Jill Lathrop held their breath when the annual open enrollment period for their health insurance plan rolled around. Their two boys, now 12 and 14, have severe hemophilia, and each needs twice-weekly injections of a blood clotting replacement factor that costs roughly $250,000 per person per year. The couple lived in fear that their health plan would put a lifetime limit on their benefits.

In 2005, that’s what happened. The Oshkosh, Wis., hospital where Ric Lathrop worked as an MRI technician instituted a $2 million lifetime cap on benefits for the entire family. Rather than wait for their benefits to run out, the Lathrop family relocated to Illinois, where Ric Lathrop got a job at a hospital in Peoria; along with the job came insurance without lifetime limits.

If that coverage had changed, the Lathrops might have had to move again . . . and maybe again. But the federal health-care overhaul makes further wandering unnecessary. Starting Sept. 23, the new law requires that when health plans renew their coverage for the coming year, they eliminate lifetime limits on coverage.

“It gives us a lot of reassurance to know our kids can have more freedom,” says Jill Lathrop.

The elimination of lifetime caps on benefits is one of several provisions that will begin to take effect Sept. 23, six months after enactment of the law. Health plans don’t have to implement the provisions until their next annual renewal date; since most plans begin their coverage year on Jan. 1, that’s when many consumers will start to see changes.

As you sign up for coverage this fall, here’s what to look for.

Extension Of Young Adult Coverage

All health plans must permit adult children to remain on their parents’ plans until age 26. It makes no difference if the young adults are married or financially independent. As long as children don’t have an offer of coverage from their own employer, parents can keep them on their plan.

If you want to put an adult child on your plan, you’ll be given an opportunity to do so during a special enrollment period. At most companies that will coincide with open enrollment, say benefits consultants. Even if it doesn’t, insurers and employers are required to notify you of the special enrollment period. Look for that notice.

Under the law, plans can’t charge more for adult children than for dependents younger than 19. But they can increase the cost of family coverage overall, and many will do so, according to an employer survey released last week by the benefits consulting firm Mercer. The survey found that more than half of employers that plan to shift more costs onto employees’ shoulders will do so by disproportionately increasing the cost of family coverage compared with employee-only coverage.

As part of their efforts to rein in costs, employers are also more likely than before to ask employees to verify that dependents are eligible for coverage, say experts. More than 40 percent of ineligible dependents are children younger than 19, says Karen Frost, health and welfare practice leader for human resources consultant Hewitt Associates. Often the eligibility change is part of the fallout from divorce. Children may no longer live with or be financially dependent on the parent whose insurance covered them, for example, potentially making them ineligible under plan rules. “Most of the time, employees are covering ineligible dependents because they don’t know the rules” of their plan, says Frost.

This can also be true for adult children on their parents’ plans.

Prohibition On Coverage Exclusions For Children With Preexisting Conditions

Employer plans can no longer refuse to cover children younger than 19 because they were born with or develop a serious medical condition. The ban on coverage exclusions also applies to new individual policies purchased for a child.

However, even though the new law allows adult children to remain on their parents’ plan until age 26, once they are 19 they could be refused coverage for a preexisting condition, says Tracy Watts, a partner at Mercer.

A similar ban on coverage exclusions for adults goes into effect in 2014.

Restriction On Annual Dollar Coverage Limits

In general, employer plans can’t impose annual coverage limits of less than $750,000 for “essential” health benefits, including hospital services, drugs, emergency services and maternity and newborn care. The maximum limits increase every year and they are eliminated in 2014. These limits apply to new individual policies, too.

Additional provisions take effect on or after Sept. 23 for new plans offered by employers or purchased by individuals since March 23. These include requirements that insurers:

–Cover the full cost of preventive services that have the highest recommendation of the U.S. Preventive Services Task Force.

–Allow women to see an OB-GYN without a referral.

–Do not make plan members pay higher co-payments or coinsurance for out-of-network emergency services.

For more information about the provisions that take effect for plan years beginning on or after Sept. 23, go to healthcare.gov.

Next:

Bringing Down Health Care Premiums

The rebate program will begin January 1, 2011 

To ensure premium dollars are spent primarily on health care, the new law generally requires that at least 85% of all premium dollars collected by insurance companies for large employer plans are spent on health care services and health care quality improvement.  For plans sold to individuals and small employers, at least 80% of the premium must be spent on benefits and quality improvement. If insurance companies do not meet these goals because their administrative costs or profits are too high, they must provide rebates to consumers.

Learn more at: http://www.healthcare.gov/law/timeline/index.html

Getting insured for hemophilia ongoing challenge

Article posted on news-leader.com

It just goes to show us we still have a little ways to go to to improve our healthcare.  It’s is sad that productive members of society have to change jobs to keep insurance.  Think about it – if they only reason you have to change jobs is due to insurance, that’s wrong!  New employees have lower productivity than their seasoned counterparts.  There is a better way – which direction is it?

Any and all comments are accepted.

Martin Addie – December 10, 2008

In a few recent articles the News-Leader has shown a desire to increase awareness of insurance issues faced by Missouri residents. You have asked for readers’ stories of how they have been affected. Here is my story.

I have a genetic blood disease called hemophilia, my blood does not clot on its own without taking antihemophilia factor (blood plasma derived, or the newest recombinant technology made without plasma) when I have a bleeding episode. In a 12-month period I used factor 210 times, medical costs for that period including blood tests and oral medication I have to take for another condition, were approximately $350,000. The costs of antihemophilia factor have risen astronomically since the ’70s.

Maintaining insurance has been a lifelong obstacle. My first job in 1978 had no insurance. I started working for the city of Springfield in July of 1984 (first job with insurance). During the ensuing years the city’s plan covered my expenses, when I reached a $1 million cap, the city changed the cap for all employees to $2 million. The city has a self-insured program, thus they set the rules for the program. When I maxed out the $2 million cap in June of 2002 the city advised me they would not raise the cap again as it would cost too much on the plan, and they had learned I could qualify for the Missouri high-risk plan as maxing out was considered a qualifying event.

I applied and was accepted. I maxed out the $1 million cap on the Missouri high-risk plan in 47 months.

I was accepted on my wife’s insurance plan in July of 2006 with a $1 million cap of which I have used 70-80 percent. Currently I need a knee replacement and elbow and shoulder surgeries that there is not enough insurance to cover. My health has deteriorated to the point that I have applied, and been approved for Social Security disability which will begin payments in May of 2009. Medicare coverage will begin in May of 2011. I may also qualify for retirement disability. Based on current medical costs my insurance will max out in less than a year.

As of this time I have not found any other options for insurance coverage. I have asked my wife’s employer to consider raising the cap (they are also a self-insured plan). The response was that it was not under consideration at this time. If I max out I could appeal at that time. I have again asked the City if there is any way they could help after I max out until I begin getting Medicare and I am waiting an answer on that.

The Missouri high-risk plan will not accept me as I have used the maximum amount, unless it is legislatively changed. I have spoken to a few legislators and there is interest in doing this. The 24-month waiting period from beginning of Social Security disability until Medicare starts can only be waived currently for end stage kidney disease and ALS. There has been legislation introduced to change the waiting period for chronic diseases by Congressman Gene Green of Texas; I think it is in committee. I have written to Congressman Roy Blunt to make him aware of these issues. I don’t believe I can qualify for Missouri Medicaid based on asset and income requirements. There also is a Missouri hemophilia program that is income-based and only pays about $12,000 or so a year.

I have tried to make this short as there are many details that are not addressed here, only the highlights. I don’t know what I will be able to do for medical coverage after I cap again, and before Medicare begins. I may be able to get some assistance through compassionate care plans through the home care provider and-or manufacturers to get my antihemophilia factor and needed prescriptions, but that will not cover blood tests, doctor visits, or if I got sick and needed new medications, an ER visit or a hospital stay.

I am able and willing to pay reasonable premiums. The problem is finding any insurance company that will cover me. The state high-risk plan is the Cobra plan for Missouri so I don’t have that option either. Statistics from the National Hemophilia Foundation indicate that if caps had kept up with other medical costs since the 1970s they would likely be nearly $20 million now. I believe federal legislation is being considered to require insurance companies to raise the caps to $10 million over the next four years. Perhaps that would be a good solution for many people as the cost of medical care has gotten so high that a million dollars doesn’t go far. In the future many others may find themselves in similar situations without options to take care of themselves.

Martin Addie lives in Springfield.

“Insurance Rules” – Make ‘em up

Insurance Rules

1. Rules can change at any time for any reason.

2. You don’t have to be informed of the new rule.

3. IF you break the rule you’re out of the game.

Make sense?  I’d play that game if I could change the rules.  No, it wouldn’t be fair to the people that couldn’t make the rules, but so what?

Here is some information that came my way a few to many times for it not to go unnoticed.

California fines two health plans $13 million

Sept. 11 Triggered a Rush to Insurers

Blue Shield sued for allegedly lying about its coverage

It seems that these fines are small compared to how much these companies make.  I’ve seen stronger fines for professional athletes.  If a company is making a $1 million error it is an inconvenience and a $10 million a rounding error when these companies are making billions.  It’s still to profitable to make these rule changes.  IF they get caught, it’s as painful as a mosquito bit!

And then there is this video I thought wrapped it up with a bit of sad and true comedic flair….

Healthcare for America Now Video

I haven’t dug into the non-profit behind this video yet, but I liked the video.  What do you think?