ACLU Sues Colorado Medicaid Over Limits on Hepatitis C Treatment

The American Civil Liberties Union (ACLU) of Colorado has filed a federal class action lawsuit over the state’s failure to extend Medicaid coverage to all low-income beneficiaries with hepatitis C virus (HCV), regardless of how far the disease has progressed.

“Federal law requires state Medicaid agencies to pay for medically necessary treatment, but Colorado Medicaid illegally denies a cure for hepatitis C for reasons that are not medically justified,” Mark Silverstein, legal director for ACLU of Colorado, said in a statement. “We are challenging a policy that forces Coloradans who cannot afford private insurance to live with the serious negative health effects of hepatitis C and to wait for a cure, possibly for years, until they have suffered measureable and potentially irreversible liver damage.”

Hepatitis C is a deadly, communicable disease that can cause joint pain, arthritis, nerve damage, liver damage, and cancer. Up to 3 million Americans have it, with most of them in the baby boomer generation, who contracted it before screening for it in the blood supply was routine. The US Preventive Services Task Force now recommends that all Americans in this age group be screened at least once for HCV; if followed, this would lead to a rise in diagnoses.

The Colorado action is the latest in a series of standoffs between advocates for HCV patients and payers, including state Medicaid officials, who have been grappling with the cost of the class of HCV therapy called direct-acting antivirals. Earlier this year, New York State officials used the threat of legal action to compel 7 major commercial payers to provide therapy.

Led by Gilead’s Sovaldi, with list price of $84,000 for a 12-week course of treatment, the therapy upended budgets while also offering the prospect for long-term medical savings if patients avoided costly treatments like liver transplants. Many states restricted therapy to only the sickest patients when Sovaldi reached the market in late 2014.

However, federal law requires that Medicaid provide medically necessary treatments, and in November 2015, CMS issued a guidance advising states to offer access without unreasonable barriers.

These issues were examined in May, in a special issue of The American Journal of Managed Care dedicated to policy questions on HCV. As discussed in a letter by special guest editor Jay Bhattacharya, MD, PhD, of Stanford University School of Medicine, “Although the medical prospects facing patients with hepatitis C virus have never been better, the prospect of gaining access to a cure is another matter for many patients.”

According to a statement from ACLU Colorado, Medicaid officials previously would only treat patients who scored at least an F3 on the fibrosis scale of F0 to F4, which measures scarring on the liver.

ACLU had threatened to sue Colorado Medicaid back in August and followed through Monday, after rejecting the state’s compromise to offer treatment to additional HCV patients, as well as women who planned to get pregnant. The state’s plan, the ACLU said, would give women incentives to either rush into pregnancies or lie to their doctors.

The revised plan called for treating patients with a score of F2 or higher, as well as all women of childbearing age “who inform Medcaid that they plan to get pregnant in the following year,” according to ACLU’s statement.

“The latest policy change is a half-step that falls short of what the law requires, which is full access to medically necessary treatment for all patients with hepatitis C,” said Sara Neel, ACLU Colorado staff attorney.

State officials estimate there are 14,400 residents in Medicaid with HCV, including 70% with stage 2 or higher. Spokesman Marc Williams told the Denver Post that the updated policy was “reasonable,” based on clinical data that show many with HCV never advance beyond stage 1.