UnitedHealthcare and AMA clash over Medicare's step therapy changes

UnitedHealthcare
UnitedHealthcare's Mike Anderson says CMS' step therapy guidance could grow the biosimilars market and generate significant savings for members. (UnitedHealth Group)

A recent policy change that would allow Medicare Advantage plans to use step therapy for Medicare Part B drugs is creating yet another dividing line between insurers and providers.

UnitedHealthcare—the nation’s largest Medicare Advantage carrier, with a prominent voice in the ears of federal officials—says new regulations around step therapy will give payers the flexibility to bring down drug costs for Medicare Part B beneficiaries by nurturing a burgeoning biosimilars market.

Meanwhile, the American Medical Association (AMA) is worried the new policy—which serves as a type of prior authorization requiring patients to try a less-expensive option before graduating to a higher cost brand name drug—will lead to “unnecessary red tape” and that patients will see more denials as a result of the new policy.

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The change, announced by the Centers for Medicare & Medicaid Services (CMS) last month, comes after an extended dialogue between UnitedHealthcare and CMS where the insurance giant pointed to its success using step therapy in Part D plans to advocate for more leeway in Part B, UnitedHealthcare’s Chief Pharmacy Officer Mike Anderson told FierceHealthcare. Part D covers the majority of prescription drugs, while Part B covers drugs administered in a doctor's office or outpatient setting. 

“This could be an opportunity for biosimilars to potentially grow their market share as innovator products are potentially step through biosimilar competitions,” Anderson said.

RELATED: CMS allows Medicare Advantage plans to negotiate Part B drug prices, implement step therapy

Historically, Part D plans have used step therapy to manage high-cost conditions like diabetes, blood pressure and high cholesterol. Anderson said the emphasis in Part D plans has been on replacing expensive brand-name medications with first line generics where appropriate.

But he also sees step therapy one of several potential steps CMS may be considering, including site of service optimization to ensure infused drugs are administered in the lowest-cost setting and shifting national and local coverage determinations to reflect evidence-based prescribing practices, especially in specialties like oncology.

"I can't forecast what CMS might do," Anderson said. "I would think there are other management tools they might be considering in the future and this might be the first type of management we'll be able to deploy in Part B."

In that regard, he said UnitedHealth is taking an active role in steering CMS toward additional flexibility within the program.

“As the largest Medicare Advantage sponsor, we have a lot of ideas and CMS is open to them,” Anderson said. “Where we have questions we’re also posing recommendations for how we think CMS should resolve those questions.”

Can ‘flawless’ execution outweigh ‘unnecessary red tape’?

AMA is far less supportive of an approach that federal officials expect could save as much as $2.4 billion per year in Part B drug costs. Often referred to by critics as “fail first,” step therapy can create administrative barriers for patients and providers required to try a less expensive drug before a preferred brand medication.

In a statement to FierceHealthcare, AMA President Barbara McAneny, M.D., said she has “serious concerns” about the new guidance, adding that step therapy requirements “frequently get in the way of effective treatment.”

“Physicians have no easy access to patient benefit and formulary information at the point of prescribing, so they will not be able to readily determine which drugs are preferred by their patients’ MA plans,” she said. “This results in treatment delays and unnecessary red tape for physicians and patients.”

RELATED: Physician groups say CMS’ change to drug formularies shifts decisions from doctors to insurers

Other provider groups were more measured in their criticism. American Academy of Family Physicians (AAFP) President Michael Munger, M.D., supported a carve-out in the guidance that limited step therapy to new prescriptions. But he cautioned against preauthorization policies that “potentially put patients’ health at risk.”

“Clinical experience has shown that step protocols used in prior authorization programs can delay access to treatment and hinder adherence,” he said in a statement to FierceHealthcare.

But UnitedHealth’s Anderson contends that “any type of pharmacy management has the potential to be disruptive.” He added that CMS’ approach is defined in a way that promotes lower cost, clinically equivalent products. The guidance also requires to insurers to pass 50% of step therapy savings to beneficiaries, which could be a significant boost for the nearly 40% of Medicare Advantage members with annual incomes below $20,000.

“It comes down to operational execution and communication,” he said, emphasizing the importance of initial screening. “We intend to execute this flawlessly and to overcommunicate to anyone who is impacted, whether it’s prescribers or the members.”