Governor Andrew Cuomo signed a bill, earlier this month, that will limit health-insurance companies’ freedom to impose “step-therapy” protocols on their insured patients. The new law will also give doctors a clearer and faster path to appealing those protocols when they are applied.

In step therapy, also known as “fail-first,” an insurer will require patients to try lower-cost drugs or services first, before it will agree to cover more expensive options.

Insurance companies say that this is necessary to control overall costs and be able to continue to offer appropriate coverage to all.

Some health-care providers, and organizations including the American Cancer Society and the National Multiple Sclerosis Society, have spoken out against step therapy, saying that providers, patients, and families know best, and that health-insurance companies that know nothing about a particular patient should not step in between provider and patient to make critical treatment decisions.

The new law does not ban step therapy. It clarifies the steps health-care providers can take to appeal a step-therapy decision, and sets a 72-hour deadline for health insurers to provide answers to appeals.

A doctor’s perspective

“I can prescribe what’s best for you,” says Dr. Charles Argoff, a neurologist at Albany Medical Center, “but then the insurance company can say, ‘You need to fail these three steps first.’”

Argoff, who is a professor of neurology at Albany Medical College and the director of Albany Medical Center’s Comprehensive Pain Program, continued, “The reason insurance companies do that is to reduce costs and maximize profits. It doesn’t have anything to do with what’s best for the patient.”

What step therapy does, Argoff charges, is set aside the doctor or other health-care provider’s judgment, experience, and knowledge of a particular patient in favor of considering only cost.

In his own experience, Argoff says, a major insurance company not long ago denied authorization for a prescription he wrote to treat a case of chronic migraine, which he describes as a severe headache disorder. The treatment he prescribed was Botox, which is, Argoff says, the only FDA-approved treatment for chronic migraine.

In a letter, the insurer explained that it was denying his request because the use of Botox for this condition was experimental, he says; the company wrote that the patient must try three different treatments, for 60 days each, before it would approve Botox. He wrote back that those three treatments were, in fact, experimental for the condition, whereas the one he prescribed was not.

“I never had a problem with [that insurer] again, and the patient got treated,” he said. The insurance companies are betting, he said, on the idea that 90 percent of providers will not have the “foundation of knowledge” they would need in order to fight a decision.

Thoughts from the NYS Health Plan Association

“Step therapy is just one tool that plans can use in their pharmacy benefit design, and essentially it seeks to help lower overall cost for drug coverage by utilizing lower cost but equally effective drugs for various conditions before going to an off-formulary or top-tier — most expensive — drug,” said Leslie Moran, senior vice president with the New York Health Plan Association.

This association, Moran said, is a trade organization that represents “not all, but the majority of,” health insurers across the state, advocating on insurance companies’ behalf before the legislature and regulatory agencies and acting as a spokesperson, or “conduit of information for the public.”

Moran said, “While it is not the driving factor, we can’t forget about cost.”

She noted that the New York State Health Plan Association does not call the therapy “fail-first,” but “therapeutic substitution.”

She has, she said, seen press releases by and interviews with representatives of well-known, well-respected advocacy groups such as the American Cancer Society or the National Multiple Sclerosis Society, talking about how difficult it is for patients to access a particular drug. “But I’ve seen very little actual data that shows that people are not getting access to the drugs that they need,” she added.

“To say that everyone is being negatively impacted by a policy, without hard demonstrable data supporting that, is unfair. Unfortunately we have a tendency in New York State, and in health care, of making policy decisions based on anecdote rather than evidence-based science,” Moran said.

Every insurer has a “pharmaceutical and therapeutic committee” that meets regularly to review all the new drugs, as well as older drugs, available to treat various conditions, looking at peer-reviewed empirical evidence, said Moran, giving them a wider perspective that individual health-care providers may lack.

“Individual doctors are less able to follow every single new study that comes out,” Moran said, “but that’s what the plan’s P&T committee is charged with doing.”

The pharmaceutical and therapeutic committee constantly adjusts its drug formularies on the basis of this research, Moran said, “in a way that is designed to benefit the total patient population.”

Summing up

“The new law is going to be a step in the right direction, which is to ‘get it right the first time.’ But more needs to be done to ensure that insurance companies play no role in making health-care decisions,” Argoff said.

The bill was sponsored by Assemblyman Matthew Titone (D-61) and Senator Catharine Young (R, C, IP-57).

Titone, from Staten Island, said Wednesday that he had started to work on the issue after “some amazing advocates” came to his office six or seven years ago to talk to him about the issue, which he had not been aware of, although, he said, he knew that insurance companies had a great deal of sway over the way that treatment is paid for. He was drawn in by hearing “horror stories of real live people in front of me” and realized that it was a “huge problem that needed to be corrected.”

Asked about the idea that insurers need to control costs of individual patients’ treatment so that they can cover treatment for all, Titone said, “It’s a flat-out fib.”

He said that for years he has asked insurers to provide any data to back up the idea that that kind of control is necessary to provide treatment to all members, and has never received any. He said, “I don’t buy it” and asserted that neither does any member of the New York State Assembly or the New York State Senate, or the governor.

Asked if more legislation is needed, Titone said that this law is the next-best thing to an outright ban on step therapy. He said a ban was “something that will not happen any time soon.”

The new law corrects a problem, he said, particularly for people who have complex physical makeups and illnesses, or sometimes more than one illness. The 72-hour timeframe, during which an insurer must respond to an appeal, is especially welcome, he said, since patients no longer have to take medications for an indefinite period until the insurance company deems them to have failed on it.

One compelling argument for the law, Titone said, is that, on rare occasions, a prescriber may make a mistake, and that, under this law, the insurance company serves as a “second pair of eyes” to catch such mistakes. Under an all-out ban, he said, there would be no second pair of eyes.

Moran said, “The law sets a new definition, saying that providers, or doctors, are able to prescribe something that is ‘in the best interest of the patient,’ but does not define what that ‘best interest’ is.”

The association is concerned about the “vagueness” of that wording, she said. “We are concerned that doctors will have carte blanche in prescribing, without any checks or balances.”

Cuomo responded through Richard Loconte, a spokesman for the Department of Financial Services, which regulates health insurers: “This bill strikes the necessary balance between the benefits of step therapy policies, the need to ensure that clinical criteria provide adequate protection for patients’ medical conditions, and that associated costs are controlled.”