New Step Therapy Requirement Coming to Medicare Advantage

August 14, 2018

The federal government has given Medicare plans a new tool to negotiate lower prescription drug prices.  But it could have the unintended consequence of limiting patients’ access to some medications.

The new guidance applies to Medicare Advantage plans, which are privately managed plans available to Medicare beneficiaries.  In an effort to drive down pharmacy costs, officials have now cleared Medicare Advantage plans to use step therapy starting in 2019.

Also known as “fail first,” step therapy requires patients to try and fail on an insurer-preferred drug before getting access to the medication their doctor prescribed.  The tactic will now be applicable to Part B drugs – physician-administered injections and infusions like vaccines, specialty drugs and innovative biologics.

Other Medicare plans are already permitted to use step therapy for Part D drugs, which patients can pick up at the pharmacy counter.  And private insurers have a long history of using step therapy and other utilization management practices in an attempt to save money.  If their record is any indication, Medicare Advantage beneficiaries have a right to be concerned about getting their Part B drugs.

Working through barriers like step therapy block timely access to the medication doctors’ prescribe based on the individual treatment needs of each patient.  It can also force patients to retry, and fail again, on medications they’ve previously taken without success. The new guidance interjects a cost-saving policy into the physician-patient relationship of nearly 19 million Medicare Advantage beneficiaries across the country.

Looking ahead, insurers are required to pass half the new savings generated to patients.  That’s little consolation, however, to those who suffer health complications or end up hospitalized because an insurer-preferred medication didn’t work.

President Donald Trump’s administration continues to demonstrate its focus on lowering drug prices.  But opting to subject seniors to step therapy proves an important point:  good intentions don’t always make for good policy.

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