The drug formularies of some small group health plans in two states don't meet essential health benefit benchmarks, a new study has found, leaving researchers pointing to a solution that may be as complex as benefit mandates.
In an analysis of the three largest small group plans in California and Massachusetts, including the plans used as the baseline for benefit tiers, Tufts University researchers found that several, though approved by regulators, don't meet benchmark formularies in a number of drug categories.
All of the plans met the requirements for full coverage of HIV/AIDS drugs, but all of them fall short of covering every drug in 10 required categories, and some "are not fully compliant with state and federal regulations," wrote drug policy researcher Joshua Cohen and colleagues in the American Journal of Managed Care.
In Massachusetts, the benchmark Blue Cross and Blue Shield plan covers 100 percent of available drugs in the classes of anti-convulsants, anti-depressants, anti-psychotics, anti-retrovirals, oral contraceptives and smoking cessation, and 96 percent of anti-cancer drugs, 94 percent of immunosuppressants, 85 percent of diabetics and 80 percent of calcium regulators.
Tufts Health Plan covers 100 percent of the drugs in just three classes -- anti-retrovirals, oral contraceptives and calcium regulators -- while including 86 percent of anti-convulsants, 92 percent of anti-depressants, 92 percent of anti-cancer drugs, 79 percent of anti-psychotics, 97 percent of immunosuppressants, 91 percent of antidiabetics and no smoking cessation products. The insurer's small group policy missed the benchmark plan's formulary in seven classes, meeting or exceeding the Blue Cross plan in only immunosuppressants, anti-diabetics and calcium regulators.
Harvard Pilgrim, meanwhile, has 100 percent of the benchmark drugs in all but two categories, covering 95 percent of anti-depressants and 93 percent of anti-cancer drugs -- missing the benchmark by 5 percent and 3 percent respectively.
In California, the benchmark Kaiser Foundation HMO covers 100 percent of drugs in nine classes, 94 percent of those in the anti-cancer class.
CalPERS Net Value HMO includes 100 percent of drugs in five categories, while covering 98 percent of anti-depressants, 96 percent of anti-cancer drugs, 84 percent of immunosuppressants, 86 percent of anti-diabetics and 92 percent of oral contraceptives -- missing the benchmark in four categories, but exceeding it slightly with anti-cancer drugs.
The other California plan studied, Anthem Blue Cross, covers 100 percent of drugs in seven classes, with 94 percent of anti-cancers, 95 percent of anti-psychotics and just 75 percent of oral contraceptives, failing to meet the baseline for oral contraceptives and anti-psychotics.
In addition to exclusions of certain drugs across plans and therapeutic classes, Cohen and the researchers also found "significant variation" in cost sharing, with a range of at least two tiers between plans with the lowest and highest median cost-sharing in all classes except anticonvulsants, antidepressants and smoking cessation products.
Drug access is one important dimension of insurance. But Cohen, a researcher at Tufts' Center for the Study of Drug Development, said the findings also raise the question of the value basis used to design drug formularies and associated cost-sharing.
"In some cases, high patient cost sharing and use of restrictions such as prior authorization may be justified--for example, when the drug in question provides little or no additional value when compared with other drugs in its class, or if there is a legitimate safety concern," Cohen wrote, "By contrast, in cases of high-value pharmaceuticals, low patient cost sharing may be warranted and few, if any, restrictions such as prior authorization, step edits, and quantity limits, would be imposed."
That type of value-based insurance design -- an area of continued investigation, with mixed findings of late -- could "mitigate the possible adverse health effects of high out-of-pocket costs," Cohen argued.
At the same time, Cohen and colleagues wrote, "for the same drugs and classes of drugs, we observed significant variance across plans in the use of cost sharing as well as conditions of reimbursement, which would suggest that plans are not adopting a coherent strategy to designing formularies." There are also "discrepancies" in therapeutic classification, "which can make it harder to for patients, providers, and policy makers to meaningfully compare coverage between plans."