Oncology Community Raising Concerns About Utilization Management, PBMs

Meg Barbor, MPH

October 2018, Vol 8, No 10 - Practice Management


Utilization management strategies allow payers to manage the cost of healthcare benefits, but according to Ray D. Page, DO, PhD, FACOI, President, the Center for Cancer and Blood Disorders, Weatherford, TX, this practice often leads to burdensome requirements on oncologists and an increased administrative workload.

“Critics will argue that if we’re focusing on cutting cost and the insurers are using utilization management criteria for themselves, it could potentially lead to an overzealous denial of care, as well as retrospective denials of payment, delays in care, or unexpected financial risk for our patients,” said Dr Page at the 2018 Best of ASCO meeting in Chicago. “And in oncology, because the costs of care are so high, it’s an important component of care delivery to ensure appropriate usage of services, treatment, and care management.”

Utilization Management

In an effort to quell the continuing rising healthcare costs, payers are using a variety of mechanisms to steer patients toward less costly therapies.

Step therapies, or “fail first” policies, restrict coverage of more expensive therapies until patients have failed treatment with a lower-cost alternative. However, Dr Page warned of one caveat with this particular mechanism: the definition of “failure” with a drug is often loosely defined.

Payers also place drugs into tiers for insurance coverage purposes. And because of the high cost of oncology drugs, they tend to be placed in higher tiers, which usually carry higher costs, for specialties under higher scrutiny. “And often this translates into much higher copays and out-of-pocket costs for our patients,” he added.

Prior authorizations—for drugs as well as for diagnostic imaging and molecular diagnostics—as well as restrictive drug formularies and clinical pathways are other common utilization management tools used by payers.

“If these are not designed and implemented properly, they can adversely impact not only our practices, but also our patients,” said Dr Page. “So it really takes a lot of wisdom and knowledge on all our behalf, particularly as we move into alternative payment models, to make sure that we’re focusing on patient-centered care as we’re looking at ways to control cost.”

ASCO Utilization Management Principles

In response to the growing use of utilization management strategies in cancer care, the American Society of Clinical Oncology (ASCO) developed some basic utilization management principles.

These principles state that individuals with cancer should have full access to the anticancer therapies that are most appropriate for their disease when used in accordance with current clinical and scientific evidence. Cost should not be the primary driver of utilization management policies, and these policies should be evidence-based and reflect the most current science and understanding of cancer treatment.

Utilization management processes should result in timely and clear determinations that are consistent with health insurance coverage and other policies. Finally, payer cost-containment strategies and decision-making processes should be transparent, without any conflicts of interest, and the payer should implement utilization management strategies in a way that minimizes the administrative burden on practices.

Oncology Community’s Concerns About PBMs

Another issue in the oncology community currently regards pharmacy benefit managers (PBMs). According to Dr Page, as the “middlemen,” PBMs currently control the cancer drug market.

PBMs were designed to manage prescription drug benefits on behalf of insurers by designing the drug formulary, negotiating discounts with drug manufacturers, and setting the reimbursement design for dispensing pharmacies and physicians. But, Dr Page warned, often the details of these arrangements are confidential, so the full scope of the actions of PBMs is not known.

The significant market consoli­dation of PBMs over the past several years is “concerning,” he said. Currently, more than 66% of the drug prescriptions in the United States are dispensed and managed by just 3 PBMs—CVS Health, ­OptumRx, and Express Scripts.

“Of potential further concern is the vertical integration that we’re seeing with the convergence of healthcare benefits and pharmacy benefits as insurance companies start proposing mergers with PBMs,” Dr Page added. “This creates significant concerns in the oncology market.”

The ASCO State Affiliate Council has identified PBMs as its highest policy priority in 2018, and other major organizations have also expressed their apprehension. A study done by the American Cancer Society showed that PBMs regularly place cancer drugs on the highest tier of their formularies.

The Community Oncology Alliance found that PBMs have been pushing the dispensing of drugs away from physicians, and a survey conducted by the American Medical Association showed a critical need to help patients have better access to safe, timely, and affordable care, with fewer administrative burdens, such as excessive time spent doing preauthorizations.

“We’ve identified these at ASCO as issues that we definitely need to address and tackle,” said Dr Page. “These are very strongly on our radar.”