Varied Use of Step Therapy Among Medicare Advantage Plans

ABSTRACT

Objectives: First, to examine 7 large Medicare Advantage (MA) plans’ use of step therapy. Second, to compare step therapy that health plans imposed in their MA and commercial (employer) drug coverage policies.

Study Design: Database analysis.

Methods: Using data from the Tufts Medical Center Specialty Drug Evidence and Coverage Database, we evaluated 7 large MA plans’ use of step therapy in their Part B drug coverage policies. First, we determined the frequency with which different MA plans applied step therapy. Second, we determined the frequency with which plans imposed step therapy protocols across International Classification of Diseases, Tenth Revision, Clinical Modification categories. Third, we compared each step therapy protocol against each drug’s corresponding FDA label indication. Fourth, we examined the consistency of step therapy protocols between the same insurer’s MA and commercial lines of business.

Results: The frequency with which the included MA plans imposed step therapy ranged from 26.1% to 63.7%. Step therapy was most common for dermatology conditions (90.2%) and least common for oncology conditions (28.6%). On average, MA plans’ step therapy requirements were consistent with the drug’s FDA label indication 29.0% of the time. MA plans’ and commercial plans’ use of step therapy differed for the same drug-indication pairs 46.1% of the time.

Conclusions: MA plans vary in the frequency with which they impose step therapy protocols in their Part B drug coverage policies. Moreover, insurers often impose different step therapy protocols in their MA plan and commercial plan offerings. Differences in plans’ step therapy requirements may result in variability in patients’ access to care within MA.

Am J Manag Care. 2023;29(9):464-468. https://doi.org/10.37765/ajmc.2023.89426

Takeaway Points

• We found that 7 large Medicare Advantage plans applied step therapy protocols in their Part B drug coverage policies with different frequencies, ranging from 26.1% to 63.7% of policies.
• For Part B drugs, we compared the step therapy protocols in the same insurer’s Medicare Advantage and commercial lines of business and found that they differed in approximately 25% of instances.
• Differences in Medicare Advantage plans’ application of step therapy protocols may result in important differences in patients’ access to care.

Health plans’ step therapy (“fail first”) protocols require patients to first try and fail on an alternative therapy before receiving a particular drug. Their intent is to guide patients to drugs with better efficacy, safety, and cost-effectiveness profiles.¹ To help reduce physician-administered drug costs, CMS authorized Medicare Advantage (MA) plans to use step therapy protocols for physician-administered (Part B) drugs starting January 1, 2020.² Prior to this change, CMS permitted MA plans to include utilization tools other than step therapy in their drug coverage policies (eg, prior authorization requirements).

Research has found that commercial health plans vary in terms of how frequently they apply step therapy protocols and in terms of specific step requirements (eg, how many prior treatments a patient must first fail).³ Step therapy reduces drug utilization.^4-7 Among 4 MA plans, research found that at least 1 of the plans imposed step therapy protocols on 10 of the 20 physician-administered drugs with the greatest total expenditures.⁸ However, how frequently MA plans impose step therapy requirements on other Part B drugs is unclear.

This article makes the following contributions. First, we use a database of MA coverage policies describing patient access criteria for a particular drug and disease to determine how frequently 7 large MA plans impose step therapy protocols on a sizable set of Part B drugs. Second, we determine how frequently plans imposed step therapy protocols across International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) diagnostic categories. Third, we compare each drug’s step therapy protocol with its FDA label indication. Finally, we explore how consistently insurers apply step therapy protocols across their MA and commercial business lines.

STUDY DATA AND METHODS

Data came from the Tufts Medical Center Specialty Drug Evidence and Coverage (SPEC) Database, which contains coverage information on MA and commercial plans for the largest US private insurers.⁹ The database includes 1789 Part B drug coverage policies issued by 7 of the largest MA plans in terms of covered lives (plans listed in the eAppendix [available at ajmc.com]). MA plans in the SPEC Database represent approximately 70% of MA patients in terms of covered lives.¹⁰ The database includes 1714 MA coverage polices for which it also includes the corresponding commercial (employer) policy.

SPEC Database content derives from publicly available coverage policy documents. For drugs that the FDA approves for multiple indications, the database documents each indication separately. For example, because the FDA approved natalizumab (Tysabri) for multiple sclerosis and for Crohn disease, the database represents the 2 drug-indication pairs separately. The SPEC Database documents MA plan coverage for 164 drugs, corresponding to 384 drug-indication pairs. At the time of this analysis, the database was current through August 2021.

For step therapy protocols, the SPEC Database includes information on the number of alternative treatments that patients must step through to access the covered drug. The database also benchmarks each step therapy protocol against the drug’s FDA-approved indication. For instance, the FDA approved tocilizumab (Actemra) for the treatment of rheumatoid arthritis for patients who had previously failed 1 or more disease-modifying antirheumatic drug (DMARD). If a plan’s coverage policy likewise requires a patient to previously not respond to only a DMARD, we designated the step therapy protocol consistent with the FDA label indication. Alternatively, we would designate a policy as inconsistent with the FDA label indication if it requires a patient to not respond to both a DMARD and infliximab (Remicade).

Analyses

This article describes 2 sets of analyses. For the first, the unit of analysis is the plan-drug-indication triplet. These analyses restrict attention to MA coverage policies. For each observation (eg, the coverage policy issued by plan 1 for drug A to treat condition X), we recorded 3 outcomes: (1) whether the policy imposed a step therapy protocol (yes/no), (2) the number of therapies that patients must step through before accessing the covered drug (1-6), and (3) whether the step therapy is consistent with the FDA label for that drug-indication pair (“yes” if the policy restricts access to the population specified by the FDA label and “no” otherwise). We report distributions for all 3 outcomes for the entire sample and stratified by health plan (designated anonymously as plans 1-7). We also report distributions for the number of therapies that patients must step through, stratified by drug-indication pair and by ICD-10-CM diagnostic category.

The second set of analyses restricts attention to plan-drug-indication triplets for which plans have issued both MA policies and corresponding commercial policies. Hence, the unit of analysis is this matched pair of MA and commercial coverage policies. The outcome is the pair’s classification into 1 of 7 categories (first column of Table 1). For example, if neither policy in a pair imposes a step therapy protocol, we designate that pair as “no steps in either.” We report the category distributions across the sample and by ICD-10-CM diagnostic category.

RESULTS

Analysis 1: Step Therapy Protocol Descriptive Statistics Across MA Plans

Of the 1789 coverage policies, MA plans provided some level of drug coverage in 1776. Across all MA plans, 45.7% (811 of 1776) of policies included a step therapy protocol (Table 2). Of these policies with a step therapy protocol, most covered the drug as second-line (requiring patients to first try and fail on a single treatment) or third-line therapy. Overall, 29.0% (235 of 811) of step therapy protocols were consistent with the drug’s FDA label indication. However, these percentages varied across plans.

As Table 2 shows, the proportion of policies imposing step therapy protocols varied across MA plans, ranging from 26.1% to 63.7%. Table 2 also indicates that among policies that impose step therapy requirements, the distribution of the number of steps varied modestly across plans. Finally, Table 2 shows that the proportion of policies imposing step therapy requirements consistent with the corresponding FDA label ranged from 5.1% to 75.9%.

Among the 384 drug indication pairs in our sample, step therapy protocols differed across plans for 36.7% (141 of 384 pairs), with some imposing a step therapy protocol when others did not. For another 37.0% (142 of 384) of the drug-indication pairs, no health plan imposed a step therapy protocol. For the remaining 26.3% (101 of 384) of these drug-indication pairs, all plans imposed a step therapy protocol.

Looking across ICD-10-CM diagnostic categories, the proportion of coverage policies imposing step therapy protocols ranged from 90.2% for dermatology conditions (83 of 92 coverage policies) and 88.5% for respiratory conditions (23 of 26 policies) at the high end, down to 32.2% for endocrinology conditions (38 of 118 policies) and 28.6% for oncology conditions (212 of 740 policies) at the low end (eAppendix Figure).

Analysis 2: Comparison of MA and Commercial Drug Policies

We identified 1714 instances in which plans issued both MA and commercial drug coverage policies for the same drug and indication. As detailed in the first column of Table 1, for 50.2% (860 of 1714) of pairs, neither the MA nor the commercial coverage policy imposed any step therapy protocol. Commercial coverage policies imposed step therapy protocols more often than their corresponding MA policies, and commercial policies included more steps on average. When both the MA policy and the corresponding commercial policy included a step therapy protocol, step requirements were the same in 71.1% of cases (460 of 647).

The remaining columns of Table 1 detail coverage consistency by disease area. MA coverage policies were more likely than corresponding commercial policies to include step protocols for hematology, endocrinology, ophthalmology, and respiratory indications, whereas commercial plans were more likely to include step protocols for oncology, rheumatology, and gastroenterology indications. When both the MA policy and the corresponding commercial policy issued by a plan included a step therapy protocol for a drug-indication pair, step requirements were most often identical for ophthalmology diseases (21 of 21 protocols; 100%) and least often identical for dermatology diseases (36 of 76 protocols; 47.4%).

DISCUSSION

MA patients’ access to specialty drugs varies across health plans for reasons that are unclear but likely due in part to contractual differences across health plans. MA plans tend to impose more step therapy requirements on treatments for some diseases than on others. This tendency may reflect opportunities to impose restrictions when more alternative therapies are available. For example, our data set included 9 drugs indicated for rheumatoid arthritis and 7 indicated for psoriatic arthritis. In contrast, there are typically fewer alternative therapies for cancer. Our results show that step therapy protocols are more frequently imposed on rheumatology treatments than on cancer treatments and that the protocols for rheumatology treatments impose more steps (eAppendix Figure).

Step therapy protocols included in MA policies often differ from the corresponding commercial policies issued by the same health plans. One reason for these differences is that CMS permits MA plans to require that an enrollee first not respond to no more than 1 alternative Part B drug as part of a step therapy protocol, which is not a requirement imposed on commercial plans.¹¹ Another possible reason for the observed differences is that some plans manage their MA and commercial lines of business separately. Alternatively, plans may tailor coverage policies to the needs of their MA and commercial populations. For example, clinical findings indicating that a drug is more effective for older patients may result in more generous MA policies.

By permitting MA plans to impose step therapy protocols, CMS introduced competition and negotiation into the market for Part B drugs.¹² In 2017, spending on physician-administered drugs totaled approximately $32 billion.¹³ As CMS guidance explains, from 2020 to 2029, step therapy protocols are anticipated to save Medicare an estimated $1.9 billion.² However, although they can reduce costs, their imposition can adversely delay delivery of effective treatment.¹⁴ Alternatively, if used appropriately, step therapy protocols can improve care by promoting the use of more effective, safer, and more cost-effective drugs.¹ CMS guidance notes that to improve care quality, plans should implement step therapy protocols along with care coordination and drug adherence programs.²

Step therapy can burden patients and providers, and differences in step therapy protocols across MA plans raise questions about the clinical optimality of these protocols. Although many physicians believe that step therapy can improve medication affordability and clinical appropriateness, they consider protocols inefficient and inflexible.¹ Commercial health plan step therapy protocols appear to be more stringent than corresponding clinical guidelines in more than half of all cases.³ Future research should examine MA plans’ use of step therapy relative to other utilization management tools (eg, prior authorization) and the impact of step therapy on drug utilization and health outcomes. Additional research that evaluates other characteristics of MA plans’ step therapy protocols (eg, the number of drugs that a protocol includes as first-line treatment options) would be valuable. Research that examines the consistency of MA plans’ step therapy protocols with available clinical evidence and clinical guidelines would help plan enrollees understand how step therapy protocols are formulated.

Legislation in most US states protects patients from potentially harmful step therapy protocols. Although laws vary, they tend to require an exceptions process.¹⁵ Meanwhile, the US Congress is deliberating over the Safe Step Act (S 2546 and HR 2279). This legislation has 3 broad aims¹⁶: (1) to create a clear and transparent step therapy exemption process, (2) to outline circumstances in which patients would be exempt from step therapy protocols (eg, when previous health records show that a required treatment is ineffective in the covered patient), and (3) to ensure the processing of exemptions in a timely manner.

Limitations

Our study has limitations. First, our findings may not generalize to other health care payers. Second, some MA and commercial health plans issued no coverage policy for some drug-indication pairs, making their coverage position unclear in those cases. Third, our analysis included coverage policies for each plan’s standard MA book of business. Some plans, however, have custom or alternative coverage policies that they apply in particular regions or circumstances. Finally, we did not account for the appeals process available to patients when the plans deny coverage.

CONCLUSIONS

How frequently MA plans impose step therapy protocols in their Part B drug coverage policies varies substantially by drug, indication, and plan. Moreover, these step therapy protocols vary across MA plans and can differ from corresponding commercial policies. These differences suggest that drug access differs not only between MA- and commercially insured patients, but also across MA beneficiaries covered by different health plans.

Author Affiliations: Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts Medical Center (NBJ, DEE, JDC), Boston, MA; Genentech (DEN), South San Francisco, CA.

Source of Funding: This research was funded by Genentech.

Author Disclosures: Dr Nichols is employed by and owns stock in Genentech, a biotech firm whose products are subject to step therapy protocols. The remaining authors report no relationship or financial interest with any entity that would pose a conflict of interest with the subject matter of this article.

Authorship Information: Concept and design (DEN, JDC); acquisition of data (NBJ, DEE, JDC); analysis and interpretation of data (NBJ, DEE, JDC); drafting of the manuscript (NBJ, JDC); critical revision of the manuscript for important intellectual content (NBJ, DEN, DEE, JDC); obtaining funding (JDC); and supervision (DEN).

Address Correspondence to: James D. Chambers, PhD, Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts Medical Center, 800 Washington St, Boston, MA 02111-1845. Email: JChambers@tuftsmedicalcenter.org.

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