Every day, providers and patients struggle with health plan, pharmacy benefit manager (PBM), specialty pharmacy, and other intermediary coverage and reimbursement policies that adversely affect individuals with cancer. These challenges may include coverage delays, step edits, prior authorizations, nonmedical switching, high out-of-pocket costs, and/or the intrusion of intermediaries into care or the drug chain, leaving patients confused, frustrated, and reeling from financial, physical, and emotional distress. Practices and patient-focused organizations that support these patients are equally frustrated. Why can’t something be done?
Fortunately, it appears that help is on the horizon—and from the government of all places. Years ago, retirement benefits were in a similar state of chaos. There was little common or fiscal sense in sight. The handling of employee retirement funds was masked behind multiple layers of administration, and the fees charged for the management of retirement accounts were out of control. Now, the federal government has turned its attention to the high costs associated with health benefits, which have skyrocketed for both employers (their second largest expense after salaries) and employees (the average family premiums exceeded $22,000 per year in 2021).1
ERISA Fundamentally Changed the Retirement Benefit Industry
The goal of Title 1 of the Employee Retirement Income Security Act of 1974 (ERISA) legislation was to protect the interests of participants and their beneficiaries in employee benefit plans. Among other things, ERISA required that sponsors of private employee benefit plans provide participants with adequate information about their plans. In addition, ERISA assigned certain standards of conduct to all fiduciaries, and requirements for reporting and disclosure of the management of the plans to the government and participants, with civil enforcement provisions to ensure that plan funds were protected and that participants who qualified received their benefits.
Further protections for employees were added in later years for health benefits continuation (Consolidated Omnibus Budget Reconciliation Act of 1985 [COBRA]), healthcare coverage and security (Health Insurance Portability and Accountability Act of 1996 [HIPAA]), and widespread healthcare reform through the Affordable Care Act (ACA) in 2010, in addition to protections for mothers and newborns, mental health parity, genetic information nondiscrimination, women’s health and cancer rights, and children’s health insurance protection. We all know the incredible impact that each of these federal protections for employees has had on the general health marketplace.2
These changes took place over the course of 2 decades and there were numerous challenges. Noncompliant employers, as well as service providers, were subjected to class-action lawsuits, and US Department of Labor penalties were levied on employers. Complacency leading to noncompliance was costly.1
Enter the CAA in 2021 for New Health Benefit Protections for Employees
The Consolidated Appropriations Act, 2021 (CAA) established healthcare benefit protections for consumers including surprise billing and transparency for insured consumers. Data collection requirements for drug pricing require health plans’ self-funded employers to report to the government information about prescription drug and healthcare spending. Gag clauses are prohibited, and compliance reporting to the government is required for certain plans and insurers. States are required to submit letters to the Centers for Medicare & Medicaid Services regarding their enforcement efforts related to the CAA.3
The CAA changes have ushered in a new era where employers are now being held accountable for the choices they make and the vendors they choose for employee health benefits. Employers need to request data from vendors and are accountable for disclosure to the government and their employees of both fees and compensation to those vendors and whether they are “reasonable” for the services being delivered. Employers will need to create governance procedures to manage their liabilities and seek guidance and partners to help them understand the implications of health benefit coverage and design under this new fiduciary responsibility.1
The CAA changes have ushered in a new era where employers are now being held accountable for the choices they make and the vendors they choose for employee health benefits.
Class-action lawsuits are already underway related to the CAA fiduciary responsibility and transparency laws. A December 2022 class-action lawsuit accused UnitedHealthcare Group of systematically underpaying benefits for care received from out-of-network healthcare providers.4
One noted retirement plan litigator, a St. Louis, MO–based law firm called Schlichter & Bogard, has been advertising via its LinkedIn page to find potential employee plaintiffs covered by healthcare plans funded by Target, State Farm, and PetSmart. One of its posts reads, “Are you a current State Farm employee who has participated in the company’s healthcare plan? You may have a legal claim–and we’d like to speak to you.”5
The rules of CAA will affect both health plan sponsors and service providers.
Employers Are Becoming Important Contacts for Providers and Patients
Employers may now become an integral part of the cancer care process. If health plans, PBMs, specialty pharmacies, alternative funding programs, or any of a host of intermediaries are now exercising documentable delays and restrictions in access to standard-of-care treatments for patients, there is a new accountability. Employees have a new empowerment to go to their employers and say, “This is not right.” We have the ability and obligation to help our patients understand when their health plan or benefit structure does not make sense. We need to be aware of the CAA and its implications for both patients and employers.
Employers have traditionally relied on health plans, PBMs, brokers, alternate funding program vendors, and others to guide them in making decisions related to benefit structure, provider networks, contracting, cost mitigation, and utilization management programs. Under the CAA, the healthcare system itself has a new opportunity to advise and critique such decision-making for employers that are new to being responsible fiduciaries for their employees’ health benefits.
Patients Are Now in the Driver’s Seat
When healthcare benefit design leaves patients frustrated, feeling as though they are: 1) paying high premiums but experiencing delays due to prior authorizations; 2) being denied access to standard-of-care drugs; 3) enduring step edits that leave them predictably sick; and 4) facing hurdles such as high co-pays, restrictive formularies, and interference from intermediaries, they are likely to take advantage of their newly acquired power to demand reasonable and timely access to quality care. This empowered patient population and the CAA requirements will drive changes among self-insured and even fully insured employers, and cascade to changes in employer contracts with third parties for healthcare benefits and administration.
As healthcare benefits shift focus from price management to total cost of care and awareness of the adverse effects on patients, there will be increased opportunities for health plans, brokers, employers, providers, and patient advocacy groups to more tightly align covered health services and benefit design with evidence-based care. These new alignments are likely to include timely access to standard-of-care treatment options, while preserving the sanctity of the physician–patient relationship and medical decision-making.
Poor Benefit Design and Coverage Policies Are Evident
We know from routinely helping patients with cancer what creates barriers to effective care and raises total overall costs. We see both good and bad benefit design, utilization management, self-referral between external corporate entities, formulary decisions, and alternate funding programs. We see policies and intermediaries leave patients frustrated and confused. We ache when we watch patients decide that they cannot afford (or learn that they are not allowed) to receive standard-of-care drugs, or when we see them go without access to treatments because of delayed decision-making, drug delivery, or intermediary intervention.
Every day, patients with cancer are adversely affected by health benefit or coverage policies that lead to:
- Lower patient compliance and adherence to mandated oral drugs instead of standard-of-care medically administered drugs.
- Nonmedical switching from a prescribed drug to another drug for financial profit by external intermediaries, even when there is a medical justification for the original prescription.
- Disruption of patient care and the physician–patient relationship when alternate drug delivery or site-of-care restrictions arise.
- Corporate medical decision-making regarding denial of prescribed treatments without knowledge of patients or their disease, quality of life, and work or family needs.
- Delays in care authorization and restricted access to treatment, which leave patients vulnerable to disease progression and diminished quality of life.
- Financial toxicity when patients are required to pay for unjustified step edit treatments before (if ever) being allowed access to standard-of-care treatments.
- Unexplained standard-of-care treatment denials by entities without medical or direct knowledge of the individual patient.
- Targeted reduced coverage or noncoverage of essential medical care.
What Can Practices Do?
Physicians and practices are already very aware of which health plans, PBMs, and specialty pharmacies or benefit designs for each patient’s insurance are problematic. Less frequently, they know which of these patterns exist for employers, and whether they are self-insured or fully insured. We now need to connect the dots. When we see patients paying good money for premiums that are not delivering sufficient value, we need to track, aggregate, and engage. We may use this information to approach employers with problematic coverage and reach out to them, offering support and guidance as to what might be amiss or a red flag for them in their benefit design and risk under the CAA. You do not need to reveal any information about specific patients but share your experience regarding different challenges with local health plans and policies for patients in your area. The approach to employers should be collaborative and informative, acknowledging their needs and role in the healthcare continuum.
When patients are constrained by benefit design, utilization management, or intermediary disruption, we as a medical community can help them by crafting talking points about good benefit design and policy. Many employers may not yet be aware of the implications of the CAA on the issues that their employees face in seeking cancer care. Most insurance plans or intermediary vendors do not dig down to the level of details about how different coverage policies affect patients in the real world.
Resources to Share With Employers in Your Area
In addition to direct advocacy for patients based on observations, there are other useful resources that oncology practices can reference. The National Comprehensive Care Network® (NCCN®) has developed an employer toolkit for benefit design that promotes high-quality cancer care.6 The NCCN Employer Advisory Board encourages employers to recognize and embrace 6 “Guiding Principles” and provides additional resources.6
Oral drugs are being used with greater frequency in cancer care, and much of the tightest utilization management controls center around the approval, denial, authorization, and step edits of these types of drugs. In 2021, CancerCare published a resource for employers called, “Best Practices for Prescription Drug Benefit Design,” which explains some of the common utilization management practices and their unintended consequences.7
This guide offers a template for a Request for Proposal for those seeking to contract for pharmacy benefits for their employees and those intending to bid for pharmacy benefits for covered lives. This detailed guide covers recommendations for pharmacy benefit plans related to reform of these utilization management tools, including “Questions to Ask” on the details of the following:
- Formulary design
- Step therapy
- Specialty pharmacy programs
- Cost sharing
- High-deductible health plans.
We are on the cusp of a dramatic transformation in health benefits, and patients and providers already understand what employers with new fiduciary responsibilities need to know. Before long, we will start to see, and engage with, employees speaking up about senseless delays in care, barriers to access for standard-of-care treatments, and costly utilization management tools that do not recognize them as individuals with unique needs. There is hope on the horizon.
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- Greenleaf J. CAA raises the bar on fiduciary governance for health plans. Employee Benefit News. May 2, 2022. Accessed September 25, 2023. www.benefitnews.com/advisers/opinion/caa-raises-the-bar-on-fiduciary-governance-for-health-plans
- History of EBSA and ERISA. U.S. Department of Labor Employee Benefits Security Administration. Accessed September 25, 2023. www.dol.gov/agencies/ebsa/about-ebsa/about-us/history-of-ebsa-and-erisa
- Consolidated Appropriations Act, 2021 (CAA). Centers for Medicare & Medicaid Services. Updated September 6, 2023. Accessed September 25, 2023. www.cms.gov/marketplace/about/oversight/other-insurance-protections/consolidated-appropriations-act-2021-caa
- Greenleaf J. Health plan fiduciary breaches persist under CAA. Employee Benefit News. January 25, 2023. Accessed September 25, 2023. www.benefitnews.com/advisers/opinion/health-plan-fiduciary-breaches-persist-under-caa
- Ortolani A. Plan sponsors prepare: health care regs going the way of 401(k)s. PlanSponsor. June 12, 2023. Accessed September 25, 2023. www.plansponsor.com/plan-sponsors-prepare-health-care-regs-going-the-way-of-401ks/
- Employer toolkit: guiding principles for promoting high quality cancer care. National Comprehensive Cancer Network. Accessed September 22, 2023. www.nccn.org/business-policy/business/employer-resources/employer-toolkit
- Employers' prescription for employee protection toolkit: best practices for prescription drug benefit design. CancerCare 2021. Accessed September 25, 2023. https://media.cancercare.org/publications/original/447-CancerCare-EmployeeProtection-Toolkit-digital-new.pdf