Transcript Coverage Decision

Value & Coverage
Issue Brief Slides
A Closer Look at Health Plan Coverage
Policies and Approaches
Health Plan Coverage Policies and Approaches
“Medically Necessary”
Medical necessity is the basis for most coverage policy in the United States
but there is no single, consensus--based, definition of medical necessity.
Transparency of Coverage Decisions
There is little public information available about how health plans and
government programs develop coverage policies.
Coverage Policy Processes
In addition to clinical evidence, insurers report using other
inputs to make their coverage decision.
Considerations and Influences
Validation Studies
Medicare
Coverage
Decisions
Specialty Society
Recommendations
Coverage
Decision
Pharmacy Coverage Decisions
Pharmacy & Therapeutics Committees’ Considerations
Information Sources/Considerations
Drug
Manufacturer
Third-Party
Studies
Burden of
Illness
Existing
Treatment
Options
Coverage
Decision
Pharmacy Benefit Managers (PBMs)
• PBMs contract with payers, with their own recommended
formulary
• Design co-pays to drive utilization towards lower cost
drugs
• PBMs contract with pharmacies to establish drug
reimbursement and professional fee levels
Specialty Drugs: Major Concern for Payers
Specialty drugs are high-cost drugs used to treat complex or rare conditions,
such as multiple sclerosis, rheumatoid arthritis, hepatitis C, and hemophilia.
Source: CVS Caremark 2014 Insights
Affordable Care Act Impact
Old business
model:
ACA
reorganized
marketplace:
• Charge premiums related to one’s health,
and/or
• Avoid unhealthy people altogether, and/or
• Limit services covered to discourage
enrollment of individuals who might need those
services
•
•
•
•
Limits premium rates for older individuals,
Requires people to be insured,
Prohibit insurers from turning people away,
Outline of services that must be covered with
• limits on consumer out-of-pocket costs, and
• services that must be offered free of cost
Utilization Management Tools
Prior Authorization
•
Health plan pre-approval of a health care item or service
Step Therapy
•
Requires the utilization of less costly, less invasive treatment alternatives
Linked Services
•
Coverage of one service contingent on utilization of another service
• Tools: case management, disease management, health education,
or comprehensive care plan
Provider Networks
Exclusive provider networks
•
Plans contract with limited number of providers, charge 100% patient
copays to “out-of-network” providers
•
Plans may be limiting patient choices in providers
•
“Network adequacy” is now being closely monitored by federal oversight
Benefit Design
Cost Sharing
•
Instead of raising premiums, plans increase copays and coinsurance
•
“yes but” coverage
Tiered Benefit
•
Out-of-pocket costs increase based on “tier” of drug
•
Drive patients to certain treatments over others
ACA Exchange Plan Benefits
Source: PhRMA: An Analysis of Exchange Plan Benefits for Certain Medicines: June 2014
Additional
Resources
• A Closer Look at Health Plan Coverage Policies and
Approaches | Download the Full PDF
• Visit FasterCures Value & Coverage Reports and Briefs
Website as the Issue Brief series continues
• Learn more | FasterCures Value & Coverage Program