Demystifying step therapy

By Emily Margosian, assistant editor, March 1, 2021

For many dermatologists, step therapy is an unwelcome and familiar hurdle, often requiring careful navigation of an onerous appeals process while patients fail to thrive in the meantime. “When I first started practicing dermatology 30 years ago, writing a patient’s prescription was a thrill for me. Treatment plans would come together easily after clinical assessment of the patient’s condition, the patient would fill their prescription, and his or her disease or quality of life would start to improve as quickly as possible,” recalled Connecticut dermatologist Howard Rogers, MD, during an October 2020 virtual roundtable with members of Congress. “Fast-forward to how it works today; I can tell you; the thrill is gone. The excitement that my patient is going to get the right medication, right away, has been replaced with trepidation. How many hoops will I, my staff, and the patient have to jump through with the insurer to get the treatment that I’ve prescribed?”

As physicians, patients, and health care organizations continue to lobby for step therapy reform, how can dermatologists navigate existing step therapy protocols to ensure their patients get the treatment they need? This month, DermWorld speaks with policy and practice management experts for insights into the appeals process, state-by-state step therapy laws, and what advocacy efforts may yield in the future.

Crafting an appeal

“Payers are attuned to the bottom line and any time an insurance carrier decides to deny coverage, particularly when it comes to step therapy, it basically includes consideration of cost savings,” explained Louis Terranova, AADA assistant director of practice advocacy. “What physicians need to do is build an argument on not just the quality of care and the effectiveness of the preferred treatment, but also frame it from a cost perspective to the insurer.”

Possible justifications for "skipping a step" can include disease and treatment history (including failure on other regimens), allergies to components of preferred drugs, or patient inability to take or use a preferred therapy (for example, history of adverse reactions, or physical inability to self-administer). Payers may also limit the amount of prescription drugs they cover over a certain period. These quantity limits are generally based on the average patient’s usage as is consistent with standard medical practice. Examples of medically necessary reasons for exceeding quantity limits can include factors such as patient weight or variations in a patient’s biochemistry or genetics, or other factors in how they absorb or metabolize a particular drug.

Once a payer issues a denial of coverage, they should include information on the reason for the denial as well as information about filing an appeal. Generally, a payer’s appeals policy may be found in the patient or physician’s handbook, at the payer’s website, or by calling customer service at the number on the back of the policyholder’s insurance card. However, most payers have similar rules for filing, which require a supporting statement from the prescriber explaining the medical reason for the appeal.

What should you cite in an appeal letter?

1. Demonstrate why the preferred drug is medically necessary. Support with information from the medical record.

“The very first thing the physician needs to document is why the lower cost drug or ‘first step’ is not medically appropriate in this case, and why the preferred prescribed drug is medically necessary by citing information from the patient’s medical record,” said Terranova. “For example, maybe the patient tried this drug three years ago, and it didn’t work. Or the patient has been stable on this drug for five years and now the health plan wants them to switch on the step program. Maybe the patient is allergic to the payer’s preferred treatment. It’s important to use documentation from the medical record to support the claims being made.”

To ensure a strong case for medical necessity, physicians should be prepared to provide documentation for the following (depending on the drug’s indication):

• Previous medications/outcomes (e.g., failed drugs on the plan’s preferred list)

• Diagnosis that is specific for an indication

• Patient allergies or previous adverse reactions

• Comorbidities

• The drug is in a protected class with no therapeutic equivalent

2. Include costs. Prolonged treatment failures due to step therapy may end up costing the system more money.

“Payers look at the dollar, so it’s helpful to include overall costs as well,” advised Terranova. “If a patient is going through step therapy, it may entail repeat office visits, and certainly we know that has an additional cost. That’s important to point out, because the payer may just be looking at their immediate savings; ‘Oh, I can buy a less expensive drug,’ but they’re not always considering the long-term, overall costs. By failing a certain drug and having to try another, you’re delaying care and the patient’s not getting any better. So not only is that resulting in more visits, but there may also be additional medical complications from that delay that can result in higher costs as well.”

What should you do if the insurer won’t honor an exemption?

After the physician and patient have exhausted the appeals process and the patient still has not received coverage for a treatment option, the next step is to file an appeal with their state’s Department of Insurance.

“In most health plans, there’s a first and second level appeal. Once you exhaust the health plan’s appeal process, you can take it to the next level for determination,” said Terranova. “Most states have regulations for addressing disputes, and at that point, you would want to advocate to the state’s Department of Insurance.”

Even by following these guidelines, the appeals process is often perceived as lengthy and frustrating for physicians and their patients. This needs to be accounted for, according to Terranova. “Certainly, this involves a lot of time for the physician and their staff and can be stressful to patients. It can feel like a war of attrition and I think that, to a degree, most plan members may not feel comfortable appealing. Those who do, often give up after the first appeal. But the key is working with the health plan on what is best for the patient.”

During his testimony, Dr. Rogers emphasized the administrative and financial burden step therapy has imposed on his practice. “I’ve had to build an extraordinary internal structure in my small business to handle the dozens of hours spent on paperwork and phone calls involved in the appeal process for these medications,” he said. “It’s disheartening and worrisome for me as a physician, and it can be downright demoralizing and stressful for my patients. More times than I can count, I’ve seen step therapy worsen a patient’s condition, cause additional side effects, or force a patient to abandon needed treatment all together.”

Get to know the step therapy law in your state

While 2020 was a challenging year, it did yield some positive developments concerning step therapy. Of the 28 states with existing step therapy laws, a few have enacted step therapy reform despite the challenges presented to state legislatures due to the ongoing COVID-19 pandemic. “Even with COVID and state legislatures having to adjourn early, we ended the year with three states passing step therapy laws,” said Lisa Albany, JD, AADA director of state policy. “We passed bills in South Dakota, Louisiana, and North Carolina, which actually came as a big surprise because we had been working on that state for a number of years.” Read the latest news on step therapy legislation that has passed at the state level.

At the heart of the AADA’s step therapy reform efforts is a model bill proposed in partnership with the State Access to Innovative Medicines Coalition (SAIM). The model bill proposes the following guidelines for state legislation on step therapy:

1. Step therapy protocols are based on recognized evidence-based and peer-reviewed clinical review criteria.

2. The exceptions process for step therapy is transparent and accessible to patients and health care providers.

3. A response from a patient’s health plan is required within 72 hours for a non-emergency and 24 hours for emergency situations. (Currently there is no requirement for when an insurer must respond to an exception request.)

4. An established basic framework of five exceptions for when it is medically appropriate to exempt patients from step therapy:

   1. The health plan’s preferred drug is contraindicated, likely to cause an adverse reaction, or result in physical or mental harm to the patient.

   2. The preferred drug is expected to be ineffective based on the known clinical characteristics of the patient and the known characteristics of the prescription drug regimen.

   3. The patient has already tried and failed the health plan’s preferred drug.

   4. The patient is already stable on a prescription drug for the medical condition under consideration.

   5. The preferred drug is not in the best interest of the patient based on medical necessity.

“We want to have some transparency in the process of how they develop the protocols. In our bill language, we call for a multidisciplinary panel of experts. We would love step therapy protocols founded on consensus-based clinical practice guidelines that are developed by nationally recognized medical societies,” said Albany. “We also want to make sure the exceptions process is transparent. Often, we hear from physicians that it’s hard to figure out the process for step therapy; it’s not easily accessible on a website. Doctors often don’t even know what information is required to demonstrate that a patient should be exempted from step therapy protocol.”

According to Albany, the AADA is working to introduce the model bill in a number of states this year. “We have about 10 target states for 2021,” she said. Dermatologists interested in spearheading step therapy reform in their states should get in touch, recommended Albany. “It would be great if they contacted our office, because there are often coalitions that have already formed, and we can put them in touch with their state step-therapy coalition,” she advised. “We also recommend dermatologists work closely with their state medical society to get their support. We have template resolutions to introduce to state medical society House of Delegates so that it becomes the policy of the state medical society to support step therapy reform. Those are two easy ways to get involved.”

What’s happening with step therapy on the federal level?

In a long-divided Congress, step therapy reform has garnered bipartisan support in recent years. “The bill we’re working on in both the House and Senate are called the Safe Step Act, which requires insurers to implement a process for patients or physicians to request an exception to step therapy protocol,” explained Christine O’Connor, AADA associate director of congressional policy.

Based on the state model bill, the Safe Step Act outlines similar patient protections around insurance-mandated step therapy in employer-sponsored plans. “We’re working with a couple dozen physician organizations and patient advocacy groups to lobby Capitol Hill on this issue, and have been pretty successful in getting co-sponsors,” said O’Connor.

“Obviously, we had an election, so this bill is going to have to be reintroduced in both chambers of the next Congress, and we’ll have to work to get some of the newly elected members on board. Fortunately, there is bipartisan recognition among legislators that step therapy causes a lot of headaches, so we are optimistic.”

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