One of the greatest concerns regarding coverage and reimbursement of novel medical interventions is that commercial payers throughout the U.S. operate largely with opaque business practices.

They are part of decision-making hierarchies that eschew clinical dialogue with key stakeholders, and ultimately limit patient access to medical care. While the Coverage & Analysis Group at the Centers for Medicare and Medicaid Services (CMS) has worked in recent years to improve the transparency, accountability, consistency, and reasonableness of its National Coverage Determinations, the opposite trend characterizes engagement with commercial payers.

The increasing lag between regulatory clearance and coverage/payment by commercial payers is currently depriving many U.S. patients access to some of the most innovative, safe and effective medical technologies. Acuity is greatest for smaller companies trying to bring a single product to patients—lag in establishing reimbursement denies them the critical resources needed to operate, and in some cases, can threaten their continued operations.

In fact, the challenges to obtaining coverage and reimbursement from commercial payers have reached a tipping point for patients and providers; medical technology innovators, specialty medical societies, and investors.

On November 8, 2017, a group of these interested stakeholders gathered in Washington, D.C. to identify and discuss these challenges, and to begin developing solutions to improve the process for all interested parties at the Patient Access Summit. It was hosted by the Medical Device Manufacturers Association (MDMA), AdvaMed and the Medical Imaging and Technology alliance (MITA).

The challenges are complex and involve multi-factorial components, especially when taking into account the numbers of private and public payers. They each require varying degrees of clinical and other evidence, and they have their own proprietary processes for making coverage determinations.

This problem is compounded even further when payers often give little or no guidance to their decision-making process either before or after they set coverage, and there is little or no sense of collaboration with patients and other stakeholders during the process.

Four key challenges

The stakeholders identified four key challenges:

• Accountability to Stakeholders—Frustration that the lack of response by payers to requests for dialogue with physicians and patients, as well as medical technology innovators, during a coverage development process results in clinically inaccurate or inappropriate policies that do not reflect patients’ needs.
• Consistency and Predictability of the Coverage Development Process—Stakeholder frustration over the variability and changing evidence requirements that exist within both public and private payers. There is a general sense that “value” has become a moving target for meeting coverage criteria. Methodologies are inconsistent between payers, and even the rationale provided by the payer may be inconsistent among two or more procedures/products in the same therapeutic category. This is often after medical societies have issued statements indicating a certain treatment or therapy is in the best interest of patients. There is a real concern that the clinical guidelines developed by specialty societies are increasingly ignored by private payers.
• Reasonableness and Objectivity of Decision-Making Methodology—Private payers lack a reasonable, consistent or objective mechanism to incorporate “patient perspective” into coverage decisions. Stakeholders are increasingly concerned about lack of flexibility from private payers when evaluating newer technologies for coverage decisions (this is in contrast with the FDA’s risk-based approach). Further, unreasonable policies are in place to preempt coverage to many new treatments, thereby disrupting the physician-patient relationship, in which a physician might recommend newer treatment if the physician believes it to be best for the patient.
• Transparency of the Overall Process—Unlike CMS, private payers are not required to make public their business processes or decision-making methodologies for coverage determinations. However the lack of transparency about these processes creates some insurmountable barriers to patient access. Attempts to increase collaboration and transparency with health technology assessment (HTA) organizations (which payers reference for evidence reviews) have failed. Many of these bodies are not transparent in their own processes and methodologies.

Now begins the work of developing solutions to these challenges, and through this stakeholder coalition, pursue multiple paths of public outreach to effect change among commercial payers. Several proposals are being developed and studied, including:

• A “Best Practices” document for collecting appropriate clinical evidence for the purposes of coverage, with a public “scorecard”
• Oversight letters from Congress to private insurers that could integrate points about how payers are now second-guessing the Food and Drug Administration
• Starting a patient access caucus on Capitol Hill to organize patients
• Having patients share examples of when they were denied access and harmed, and who gained access and benefited
• Having physicians share their frustrations about how the current environment impedes their ability to provide patients wider treatment options

Coverage decisions

Health plans decide whether (and how) to provide coverage for specific health care items and services based on whether the item or service is “medically necessary.” But there is no single, consensus-based definition of medical necessity. Whether a treatment is “medically necessary” is often at the heart of coverage disputes between patients and insurers, and it causes delays to treatment for qualified patients.

Thus, patient advocates and physicians must be aware of how coverage decisions are made, and how nuanced coverage policies affect access to clinical care. As new treatments are developed, advocates will need to understand the processes and environment in order to influence outcomes and advocate for the most appropriate access to advances in medical care and treatments.

Coverage decisions are made by medical professionals who are employed by individual health plans, typically medical directors or chief medical officers.

An important consideration is that it can be difficult for a commercial health plan to outright decline to cover a service, even if it views the evidence as indicating only a modest clinical/health benefit. While binary “yes” or “no” decisions are sometimes made, it is more common for health plans to come to a “yes, and” or “yes, but…” decision.

In this scenario, an item or service meets the threshold for being covered, but the terms of coverage may limit the circumstances under which it is covered, or create a disincentive for doctors to prescribe it. Thus, the initial coverage decision may not be predicated on costs, but rather clinical evidence, patient/consumer benefit and risks, and provider practice among other considerations. However the terms of coverage can and do consider costs.

After an affirmative coverage decision, there can be a separate, hybrid, medical/business policy process to decide if there is a need for coverage parameters that limit access, limit utilization, or drive down price in some way. Those parameters typically involve utilization management, benefit design, or provider networks. Health plans view these parameters as medically-appropriate, while clinicians, patients or others sometimes disagree about the appropriateness.

One of the greatest complaints leveled against commercial payers is the lack of transparency of their coverage decisions. There is little public information available about how health plans develop coverage policies. One reason may be that want to protect their competitively important business strategy, and thus such information remains confidential. In other instances, the process itself is quite variable and not easily described in ways that address all situations.

However another reason for the lack of transparency may be that health plans set a wide range for the level of evidence required for coverage. While all plans state a need for evidence of the clinical effect on the patient’s disease state, most reports inconsistently rely on various other evidence inputs—independent validation studies, Medicare coverage decisions, and medical society recommendations.

The latter is especially important to clinicians. Societies of medical specialists, such as cardiologists, endocrinologists, and radiologists have processes in place to develop clinical treatment guidelines in their specific disease areas.

Crafting coverage policies

Plans will often adopt those guidelines as their coverage policies, or use guidelines as a basis for their own coverage even if they differ slightly. This practice is being challenged as well by payers.

In fact, it is unclear how health plans keep up with evolving medical society guidance about specific treatments. So that coverage policy lags behind the science, creating difficulties and/or conflicts for treating physicians.

In the absence of published evidence, health plans also consider the extent of provider and patient demand, and/or regulatory review among other influences and sources of evidence.

Cost is not part of the consideration at the level of “yes or no” coverage. However once a health plan has an affirmative decision, then they may apply constraints that seek to address the cost issues.

This is often referred to as nuanced coverage policy, when a health plan has the option to institute medically-appropriate utilization management (UM) as a business consideration rather than simply as a medical imperative.

However as noted earlier, this can sometimes become the source of debate, with health plans viewing the constraint as clinically-appropriate and consistent with clinical evidence, while some clinicians and patients may view them as barriers to medically-necessary care.

Once they reach a positive coverage decision, payers make decisions about the need for utilization controls to manage patient access. They do this in consideration of medically-specific reasons related to patient risks, or if there are many therapeutically-similar competitors, coverage may depend on costs.

As with many matters surrounding coverage decisions, there can be differences of opinion about what should be considered therapeutically similar and if any clinically important differences have been fully taken into account.

Utilization Managment Strategies for Patient Access

Utilization management strategies typically include prior authorization, step therapy, or linked services.

Prior Authorization

Prior authorization is a system of health plan pre-approval of a health care item or service. Hospitalization or surgeries might require pre-approval where the health plan might review the necessity of the hospitalization relative to other less costly alternatives, or to review the treatment history and diagnosis. Health plans view prior authorization within the context of medically-appropriate business decisions as a way to ensure that less costly or risky interventions have been tried and to ensure that that the surgical intervention is the most appropriate option at a point in time.

Step Therapy

Step therapy may be a result of prior authorization. A health plan may require that a patient exhaust what it has determined to be less costly, less invasive, less risky alternatives prior to receiving whatever therapy the health plan has put at the top of the staircase. Clinicians and patients may view step therapy as a barrier to clearly indicated care.

Linked Services

Health plans may make coverage of one service contingent on utilization of another service, such as case management, disease management, health education, or development of a comprehensive care plan that captures the full scope of care. The linked service is designed to improve the effectiveness of the underlying service so the two services are only covered in tandem.

Narrowing Provider Networks

As of early 2014, health plans in some regions of the country have become more aggressive in their developing exclusive provider networks. In this process, health plans choose to contract with a limited number of providers geographically, leaving providers without contracts as “out-­of­network.”

In the past, using an out-of-network provider meant that the patient had higher copays. Today, it can mean that the service is simply not covered—which obliges the patient to cover 100 percent of the cost for treatment, which does not count toward a deductible or out-of-pocket protective maximum.

Health plans have to use metrics such as costs to select providers for their network. Contracting providers may reduce fees considerably in exchange for more patient volume. Strict provider network rules are new to consumers, which again limits their access to care. It may come as a surprise that otherwise well­known and well-regarded facilities are not included in the networks of major insurers.

Benefit Design

Premiums are essentially shared costs between consumers and employers, or consumers and the government. So payers save money when health care costs move to the consumer’s out-of­pocket expense at the point of service, where the burden is heaviest on consumers who use more health services.

An example of benefit design is to limit treatment of venous insufficiency to a one-time per-leg, per lifetime approach that requires patients to pay 100 percent of costs if any follow-up treatment is required.

Tiering

This is used predominantly for the drug benefit (where the patient pays out-of­pocket costs in relation to the “tier” where the drug is placed) and is a common benefit design. Tiering moves cost to consumers, and may steer them toward one treatment and away from another.

Higher-level tiers equal higher patient costs. In addition to moving costs between plans and consumers and steering treatment choices, copay amounts may also affect the likelihood of initiating and remaining in treatment.

However, tiering is now beginning to extend beyond the pharmacy benefit to the medical benefit in commercial health coverage. Patients pay less to see preferred providers than non­preferred providers (on a higher tier). Some plans have multiple levels of provider tiers, in contrast to just in-network and out-of-network coverage.

Conclusion

Health plan coverage decisions and processes are extremely complex. There are many factors that impact coverage decisions, including the type of health care item or service and the type of payer making the decision. Not only is the topic complex, but coverage policy and processes are changing rapidly against a backdrop of rising health costs and additional market rules put in place by the Affordable Care Act (ACA). The tension between cost containment, consumer satisfaction, and provider satisfaction will continue and grow.

Utilization management programs will continue to create issues relative to coverage and access to care if health plans are not alert. We are likely to continue to see “yes, but” coverage with increasingly complex coverage rules that combine benefit design features, provider network rules, and linked services in new and innovative ways that will have implications for individual consumers or consumer groups.

By design, health plans have been put on the front line of cost containment in the U.S. By design, cost containment will become an unavoidable issue, and coverage policy will be at the heart of the discussion about the issue.

Thus, patient advocates and consumers need to be aware of how coverage decisions are made and how coverage policy affects access to clinical care. As new treatments are developed, advocates will need to understand the processes and environment in order to influence the outcomes and advocate for the most appropriate access to advances in medical care and treatments.

No doubt, your practice has experienced the frustrations of coverage denials and the need for administrative support to manage claims and appeals. Now you have an opportunity to get involved in a national coalition to accelerate patient access to care for treatments you value most for your patients.

Join your peers, your medical societies, along with medical device industry trade groups, investors, and patients to engage in this important public policy initiative.

If interested, contact me at adirenbaum [at] anrconsulting [dot] net.