Haris Ashley
Step therapy is a process that insurance companies use to control costs and prevent unnecessary medication use. This means that patients are required to try a lower-cost prescription drug that treats a given condition before stepping up to a similar but more expensive drug. This can be detrimental to patients if the lower-cost drug does not work for them, as they will have to endure the ineffective treatment for a certain amount of time. Step therapy also limits the doctor's decision-making ability and undermines the patient/doctor relationship.
| Characteristics | Values |
|---|---|
| Definition | Step therapy is a type of prior authorization and utilization management tool. |
| Objective | To control costs and avoid unnecessary medication use. |
| Process | Patients must try the most cost-effective medication before moving on to more costly options. |
| Classification | Medications are classified into three "step levels" by insurance companies. |
| Requirements | Patients must try the least expensive option (Step 1) before moving on to Step 2 or Step 3. |
| Exception | A doctor may request an exception from the insurance company if a lower-cost medication is not suitable. |
| Appeal | If coverage is denied, patients can appeal the decision and request an exception. |
| Drawbacks | Step therapy may delay access to necessary medication and disrupt treatment plans. |
| Impact | It can affect the doctor-patient relationship and limit the doctor's decision-making ability. |
| Incentives | Health insurers may offer financial incentives to patients to switch treatments. |
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What You'll Learn
- Step therapy: patients must try cheaper drugs before stepping up to more expensive ones
- Pharmacy Benefit Managers (PBMs): companies that determine which medicines are covered by insurance plans
- Doctors' decision-making: step therapy limits doctors' ability to decide on treatments
- Patient/doctor relationship: step therapy undermines the relationship between patients and doctors
- Patient complications: step therapy can cause preventable health complications
Step therapy: patients must try cheaper drugs before stepping up to more expensive ones
Step therapy, also known as the "fail-first policy", is a cost-control strategy employed by insurance companies. It requires patients to try less expensive, generic, or preferred medications before “stepping up" to more costly non-preferred drugs. This process can be detrimental to patients if the lower-cost drug is ineffective or if they switch insurance plans, requiring them to restart the process.
When a doctor prescribes medication, patients can check their insurance plan's formulary, or list of covered drugs, to see if step therapy is required. If so, the pharmacy will review the patient's drug history to determine if they have tried the step 1 therapy within a given time frame. If not, the pharmacist will work with the doctor to find an alternative prescription or request coverage for the original prescription.
While insurance companies view step therapy as a necessary cost-control measure, it has been criticised for prioritising profits over patients' needs and limiting access to the best treatment options. Pharmacy Benefit Managers (PBMs), who act as middlemen in the drug supply chain, have been accused of steering patients towards more profitable medications that may not be in their best interests.
To navigate the step therapy process, patients can ask their doctors for samples or manufacturer coupons to help with medication costs. They can also check with pharmaceutical companies, as some offer discounts or drug assistance programs for individuals who cannot afford their medications. Additionally, prescription savings programs like FamilyWize or GoodRx can provide significant discounts on out-of-pocket expenses.
In some cases, healthcare providers can request exceptions from insurance companies if the preferred medication is not suitable for the patient. However, even after completing step therapy, insurance companies may still deny coverage, requiring patients to appeal the decision. While step therapy can help control costs, it is important that patients and doctors have a say in the decision-making process to ensure timely access to the most appropriate medications.
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Pharmacy Benefit Managers (PBMs): companies that determine which medicines are covered by insurance plans
Step therapy is a process where a health insurance company requires patients to try a lower-cost prescription drug that treats a given condition before "stepping up" to a similar but more expensive drug. In the US, health plans used step therapy in about 40% of drug coverage policies.
Pharmacy Benefit Managers (PBMs) are third-party companies that act as intermediaries between insurance providers and pharmaceutical manufacturers. They negotiate rebates with manufacturers, process claims, create pharmacy networks, review drug utilization, and manage mail-order specialty pharmacies. PBMs also determine which medications are covered by insurance plans and how much patients pay for their prescription drugs.
PBMs are among Fortune's top 25 companies in the US, with the three largest controlling approximately 89% of the market and serving about 270 million Americans. These large PBMs are owned by health insurers and control 77% of all claims. Due to their market power, PBMs can manipulate costs and limit competition, which affects value, savings, and access for patients. They can also steer patients towards medications that are more profitable for the PBM but not necessarily in the patient's best interest. This undermines the patient/doctor relationship in determining the best treatments.
There is a lack of transparency in the pricing insurers are contracted to pay pharmacies, and the reimbursement pharmacies receive. This lack of transparency, along with PBMs engaging in spread pricing, can result in higher premiums and cost-sharing for patients.
To address these issues, the National Association of Insurance Commissioners (NAIC) created the Pharmacy Benefit Manager Regulatory Issues (B) Subgroup in 2018 to establish a licensing or registration process for PBMs and improve transparency and oversight.
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Doctors' decision-making: step therapy limits doctors' ability to decide on treatments
Step therapy is a process where insurance companies require patients to try lower-cost prescription drugs before covering more expensive medications. This process can be detrimental to patients if the lower-cost drug is ineffective or if they switch insurance plans, requiring them to restart the step therapy process. While step therapy is intended to control costs and prevent unnecessary medication use, it can disrupt the doctor-patient relationship and limit doctors' decision-making ability.
Doctors play a crucial role in navigating the step therapy process for their patients. They can prescribe alternative medications that do not require step therapy or work with insurance companies to obtain coverage for the originally prescribed drug. Additionally, doctors can help patients appeal insurance company decisions and provide input on necessary prescriptions.
However, the use of step therapy by insurance companies has been criticised for prioritising cost control over patient care. Pharmacy Benefit Managers (PBMs), who are middlemen in the drug supply chain, have been accused of steering patients towards more profitable medications rather than those prescribed by doctors. This undermines the doctor-patient relationship and limits patients' access to the best treatments.
To address these concerns, some have called for reforms to step therapy practices. The "Safe Step Act", a bipartisan bill introduced in 2021, aims to address issues with step therapy and prior authorisation processes. While decision-making in healthcare involves multiple stakeholders, including patients, physicians, pharmacists, and payers, it is essential to strike a balance between cost control and ensuring patients receive the most appropriate treatments.
In conclusion, while step therapy can help control costs, it limits doctors' ability to decide on treatments for their patients. This can lead to delays in accessing the right medication and potentially impact patient health. Reforming step therapy practices and prioritising patient care over financial incentives are crucial steps towards improving the healthcare system.
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Patient/doctor relationship: step therapy undermines the relationship between patients and doctors
Step therapy, also known as "fail first", is a cost-control strategy that requires patients to try a lower-cost prescription drug before "stepping up" to a similar but more expensive drug. This process can be detrimental to patients if the lower-cost drug does not work for them, as they will have to endure the ineffective treatment for a certain period. It can also be disruptive when a patient switches insurance providers, as they may have to restart the step therapy process.
Step therapy undermines the patient/doctor relationship by taking the decision-making power away from doctors and giving it to insurance companies. Doctors are required to get approval from insurance companies for specific medications, and patients are forced to try drugs that may not be the best choice for their symptoms. This can delay necessary treatment and lead to adverse reactions, compromising patient care.
In some cases, insurance companies offer financial incentives to patients to switch from one drug to another preferred drug, even if it was not prescribed by their doctor. This non-medical advice paired with financial incentives undermines the patient/doctor relationship and can negatively impact patient health and recovery.
To address this issue, it is crucial to put patients first and preserve the patient/doctor relationship. State lawmakers and health insurers should work together to ensure that step therapy protocols are based on medical criteria and clinical guidelines developed by independent experts. A simple and accessible exception process should be established, allowing providers and patients to challenge the use of step therapy.
While step therapy can help control costs and prevent patients from taking unnecessary risks with more expensive medications, it is important to strike a balance and ensure that patient care is not compromised. The decision-making process should be collaborative between doctors, patients, and insurance companies, taking into account individual medical histories and treatment needs.
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Patient complications: step therapy can cause preventable health complications
Step therapy is a program that requires patients to try a lower-cost prescription drug before "stepping up" to a similar but more expensive drug. It is a cost-control strategy that saves money for both patients and health plans. However, step therapy can cause preventable health complications for patients.
When a patient's prescribed medication requires step therapy, their pharmacist will receive a message from the insurance company when they submit a claim. The pharmacist will then work with the patient's healthcare provider to find a solution. This often involves trying a medication that is in step one first. If it doesn't work, a medication in the next step is more likely to be covered. However, if none of the medications in step one are suitable, the patient may be forced to endure a delay in receiving their optimal treatment.
Research has shown that this delay in receiving optimal treatment can cause irreversible damage in some cases. For example, in the treatment of inflammatory bowel disease (IBD), prolonged use of ineffective agents can cause irreversible structural bowel damage. Similarly, delays in delivering biologics for the treatment of rheumatoid arthritis can lead to permanent joint deformities, and delays in breast cancer treatment result in lower survival rates.
In some cases, patients may be offered financial incentives to switch to a different medication, even if it is not the one prescribed by their doctor. This undermines the patient/doctor relationship and can negatively impact the patient's health and recovery. For example, a prominent health insurer offered patients a $500 debit card to switch from one drug to another, even though it was not prescribed by a physician.
Furthermore, step therapy can be disruptive when a patient switches insurance plans. They may have to start over with different step 1 and step 2 medications, even if the previous treatment was working well. This can cause unnecessary delays and complications in their care.
While step therapy can help control costs, it is important to ensure that it does not compromise patient care or cause preventable health complications. Patient advocacy groups and clinicians have joined forces to call for reforms that protect patients and ensure timely and appropriate care.
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Frequently asked questions
Step therapy, also known as "fail first", is a process that requires patients to try less expensive drugs before moving on to pricier ones. This is done to control costs and is required by many insurance plans.
You can check your insurance plan's summary plan description or certificate of coverage. You can also look up your insurance plan's formulary, which is a list of prescription drugs that your insurance plan covers. If the medication requires step therapy, it will usually have an ST next to its name.
If your insurance denies coverage, you can appeal the decision, ask your doctor for samples, get help from the drug manufacturer, or use a prescription savings program.
