In the December 2022 and February 2023 issues of Oncology Practice Management, I identified external vendors (called specialty drug carve-out or alternate funding programs [AFPs]) that are charging self-insured employers a fee to find “specialty funding” or other resources so that employers and employees can pay sharply reduced prices, or nothing at all, for expensive drugs.1,2 However, these specialty carve-out vendors do not disclose the sources for this alternative funding or the drugs themselves, hiding the true impact of this practice on patient care and charity. Fortunately, practices and patients are now coming forward to explain how these programs have put individuals, patient assistance programs (PAPs), foundations, and other patient support systems at risk. We need to continue this momentum so that we can expose these AFPs and their practices to customers, regulators, and patients.
AFPs Prey on Patients and Employers for Profit
Brokers receive a fee for suggesting “cost-cutting” programs to employers. These programs are marketed to self-insured employers, business coalitions, and unions by AFPs to obtain costly specialty pharmacy drugs, whether domestic or imported, for employers at little to no cost, and for employees at zero copay, for a fee from employers based on the retail value “savings” for the drugs. Many of these AFPs appear to have open or masked organizational ties to specialty pharmacies, pharmacy benefit managers (PBMs), or even health plans, thus ensuring that one way or another, a networked organization can receive a fee (or several fees) from employers at multiple touch points.
A symbiotic relationship seems to exist between the AFPs and specific PBM partners. The PBM sends an alert when a claim appears for an AFP-excluded drug for a specific employer/union client and routes patients into the AFP process. The AFP then chases manufacturer drug support programs or PAPs, often mandating profitable white bagging of drugs from that PBM, and instructing patients whose physician may balk at the white-bagged drug delivery to seek another physician who will be more compliant.
AFPs Market Heavily to Unions, Employers, and Brokers, With Little Transparency
Self-insured employers are extremely worried about the rising costs of healthcare, including specialty drugs, and are vulnerable to the AFPs’ promises of reduced costs. However, they often proceed without an understanding of the true fraudulent nature of these programs or the potential risks to employers and their patients.
The AFPs market themselves to unions, employers, and brokers in a variety of ways, including as prescription advocates, advocacy services, and specialty drug advocates. These terms make it sound as though they are working on the side of patients.
In reality, they deny (at least on paper) the coverage that patients had before the AFP contracted with the employer, threaten patients with extreme costs and penalties for not allowing the AFP to represent them in finding drugs, and then claim fees for savings “generated” by enrolling patients in PAPs intended for truly uninsured patients. If the AFPs are unsuccessful, patients are dumped back into their original insurance coverage and are left to fend for themselves. Of course, AFPs do not market this as a feature of their programs.
Self-insured employers and brokers are listening with growing interest. A survey of 114 employers indicated that in 2021, only 6% were currently using an AFP and 28% were exploring the use of AFPs. However, for the 2022 plan year, the percentage of employers currently using an AFP jumped to 14%, with another 14% exploring the use of AFPs.3 The sample size was small, so this may be more of an indication of growth in use and interest in general, rather than a representation of the whole market.
Patients and Their Employers are Being Treated LIKE Pawns
Physicians have always been able to help their patients access PAPs, including free drugs and other financial assistance, and they have provided this help at no charge. Patients who qualify, whether they are underinsured or not insured, benefit from timely access to their needed medications, which are provided directly from their treating physicians.
The AFP model replaces that free physician assistance and then charges employers fees ranging from 25% to 35% of the retail price of the drug for a minimal effort. If the misrepresentation of patient insurance status fails to gain access to funds and drugs set aside for needy patients, AFPs dump patients back into their old insurance without regard for the negative impact of delays in treatment, loss of necessary assistance for patients because of their interference, and risk to employers caused by the violation of their responsibility to their employees for stewardship of employee benefit dollars.
AFPs Are Being Exposed But Are Trying to Deflect Responsibility
Johnson & Johnson filed a lawsuit against SaveOnSP, an AFP vendor, in May 2022.4 The lawsuit alleges that SaveOnSP illegally pilfered copayment coupons and manufacturer assistance programs offered by the drug manufacturer, circumvented patient drug cost essential health benefit protections established by the Affordable Care Act, and inflated patient co-pay rates to appropriate funds intended for patients for the financial gain of the AFP. SaveOnSP has not been successful in seeking dismissal of the lawsuit, which is proceeding.
AbbVie filed a lawsuit against Payer Matrix, an AFP vendor, in May 2023.5 The lawsuit alleges that Payer Matrix operates a fraudulent and deceptive scheme to enrich itself by exploiting AbbVie’s PAP through the enrollment of insured patients into a charitable program not intended for them; deceiving employers, physicians, PAPs, and patients; and causing harm to patients through deception, confusion, delays in care, and reduced access to essential medical treatment.
Payer Matrix’s response to this lawsuit was to issue a press release headlined “Leading Patient Advocate Slams AbbVie’s Moves to Deny Vital Drugs to Needy Patients.”6 The irony of an AFP calling itself a leading patient advocate that provides much needed financial assistance to the patients it serves is almost sad. Payer Matrix insinuates that without its intervention, patients would be harmed, never mentioning that profit is the reason for its intervention into what has historically been a free and easily accessible process between patients, providers, and PAPs, without the “help” of an AFP.
Identifying an AFP Is Not Easy, But help IS Available
AbbVie and other organizations have narrowed their patient assistance parameters to exclude insured patients represented by AFPs, such as Payer Matrix, but it is still difficult to detect the intrusion of these vendors. Identification of AFPs is essential, however, for quantifying their harm to patients and employers.
The National Oncology State Network (NOSN), along with other national charitable and specialty organizations, is developing talking points for practices and patients to use with self-insured employers. These include the understanding that treating physicians already refer qualified patients to assistance programs at no charge, the dangers of wholesale drug importation, the high-cost impact of white-bagged and brown-bagged drugs, as well as the adverse consequences of using these vendors for employers, patients, and the fragile healthcare safety net infrastructure. NOSN currently serves 44 states through its volunteer oncology leader membership; check www.nosn.info to determine whether you are in one of the member states or to find out how to get involved for your state.
Tips for Identifying the INTRUSION of an AFP for a Patient
These warning signs could indicate the intrusion of an AFP for a given patient:
- Patients are told that their drug is completely excluded from their health plan coverage (statement often issued from a PBM).
- Patients are told that because their drug is excluded from their health plan coverage, they must sign up with "named AFP" (but not referred to as an AFP to patients) or they will be responsible for increased costs up to the full cost of their medication.
- Patients are told that to enroll with the “named AFP,” they must provide authorization for these vendors to collect their financial, insurance, and medical information. This often includes copies of the patient's identification cards, which can then be used to misrepresent an AFP staff member as the patient during a PAP application, to contact PAPs on the patient’s behalf, to disclose and use protected health and financial information about the patient, and to track the patient’s medication prescriptions and dispenses (so that the AFP can then bill the employer its fee on patient treatments, which is not disclosed to the patient).
- Physicians or PAPs may notice an “alternate contact” for a patient or a “care coordinator” handling the patient’s financial information relative to specific drugs, who is not related to the patient. Observant offices may notice the same “contact” name and number for multiple patients. These are likely AFP staff whose involvement is necessary for the vendor to claim credit for the drug assistance and collect its fees.
- The physician’s office may be given forms to complete and send on to the PAP. The AFP may knowingly use older PAP forms (that do not reflect current policies that exclude patient representation by any AFP) or may use the transmission from the physician’s office to mask its involvement and deceive the PAP.
- Patients may be told that their drug must only be provided by a specific specialty pharmacy and shipped to them or to their physician’s office. If the physician’s office does not accept such shipped (white-bagged or brown-bagged) drugs, the patient may be told to find another physician that will accept these drugs, thus disrupting their care journey.
- Ultimately, patients may return to their physician’s office saying that they are now back in their employer’s insurance program, having been denied assistance or drug access with the AFP. If the AFP cannot generate a charge to an employer for obtaining discounted drugs, they have no further use for these patients, and dump them back into their regular health insurance plan package. Most patients may now qualify for PAPs as underinsured patients, since they are no longer represented by an AFP, but it will be up to the physician and the patient to work through that with the PAP.
Key Steps to Take if You Suspect AFP Interference
- Track the drugs and employers involved. Use NOSN talking points to alert employers to the risks of such programs for their vulnerable employees and their own fiduciary responsibility to their employees.
- Warn patients about the dangers of disclosing personal financial and medical information and giving permission—even powers of attorney—to strangers for medical care or drugs. You can provide those services directly for your patients related to PAPs. Intervening with the patient before the AFP gets involved might block it out completely.
- Work with your local specialty association and NOSN to share stories of the negative impact of these models on patients.
- Document adverse consequences for patients under these models, including substitutions, medication sources, drug importation plans/activities, delays in care, frequency of dumping patients back into previous coverage, white-bagging, brown-bagging, and communications sent to physicians and patients.
- If your patients have been denied by a PAP due to the intrusion of an AFP and has been dumped back under their regular health plan coverage, try to resubmit to the PAP since they are now underinsured rather than uninsured, as inappropriately claimed by the AFP.
- Let employers and patients know that appropriate qualified patient assistance is handled at no charge in treating provider offices so they can avoid AFP vendor charges.
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- Holcombe D. Specialty carve-outs: what are the implications for patients and practices? Oncology Practice Management. 2022;12:1,11-14.
- Holcombe D. Specialty carve-out models cost patients and employers more than they disclose. Oncology Practice Management. 2023;2:1,6-7.
- Fein AJ. Employers expand use of alternative funding programs—but sustainability in doubt as loopholes close. May 17, 2023. www.drugchannels.net/2023/05/employers-expand-use-of-alternative.html. Accessed May 27, 2023.
- Loftus P. J&J sues drug-benefit middleman over use of drug-cost assistance program. May 4, 2022. www.wsj.com/articles/j-j-sues-drug-benefit-middleman-over-use-of-drug-cost-assistance-program-11651698029. Accessed May 30, 2023.
- Silverman E. AbbVie sues a behind-the-scenes company for exploiting its patient assistance program. May 11, 2023. www.statnews.com/pharmalot/2023/05/11/abbvie-lawsuit-patients-jnj-pfizer-bristol-payers-insurance/. Accessed May 30, 2023.
- Payer Matrix. Leading patient advocate slams AbbVie’s moves to deny vital drugs to needy patients. May 23, 2023. www.prnewswire.com/news-releases/leading-patient-advocate-slams-abbvies-moves-to-deny-vital-drugs-to-needy-patients-301831464.html. Accessed May 30, 2023.