The Impact of Utilization Management on Patients and Practices: A Conversation with Dr. Jeffery Ward

The Impact of Utilization Management on Patients and Practices: A Conversation with Dr. Jeffery Ward

Clifford A. Hudis, MD, FACP, FASCO

May 20, 2019

Editor’s note: Dr. Hudis hosts the ASCO in Action Podcast, which focuses on policy and practice issues affecting providers and patients. An excerpt of a recent episode is shared below; it has been edited for length and clarity. Listen to the full podcast online or through iTunes or Google Play.

I am delighted to have as my guest Dr. Jeffery Ward. He's the chair of ASCO's Government Relations Committee, and a longtime active member in that area. In addition to his important contributions to ASCO over the years, Dr. Ward is a medical oncologist and a hematologist at the Swedish Cancer Institute in Edmonds, Washington.

Our conversation today will focus on utilization management in cancer care, or the policies that public and private insurers use to control the use of anticancer drug therapies, such as prior authorization requirements, restrictive formularies, step therapy, or fail first requirements, and specialty specific tiers. These are all new and complex topics for some listeners. For others, there's great familiarity. And we're going to explore all of them in the coming discussion.

In September 2017, ASCO published in the Journal of Oncology Practice a policy statement on the impact of utilization management practices specifically directed at cancer drug therapies. In that statement, ASCO outlined its opposition to payer-imposed utilization management policies that restrict patient access to high-quality, high-value cancer care. The statement also points to high-quality clinical pathways as the best first option for ensuring the appropriate utilization of anticancer drugs and the delivery of the highest quality cancer care. With that as introduction, Dr. Ward, I'm delighted to welcome you to the podcast, and really looking forward to hearing your thoughts on utilization management.

CH: To get the conversation started, can you define first exactly what we mean by the phrase utilization management?

JW: Utilization management is classically when insurers or payers put controls over what care a patient may receive. And in our case, that usually means control of the drug therapies that they're going to get. I think that utilization management more strictly could also include when providers themselves use practices that try to strive for the highest quality care at the best price.

CH: So that already raises the possibility that there are a number of utilization management policies that payers could employ focusing, for example, on the use of specific prescription medications or other interventions. What are some of the more common utilization management practices that are being used specifically in cancer care?

JW: The one that we run into every day is specialty care pricing. I was talking to the MedPAC folks at Congress just a couple of months ago and began telling them the contortions we go through in a practice. In my practice, we have seven docs. We have two full-time people whose whole job is to get authorization for drugs, and then to figure out how the people are going to pay for their co-pays, which can sometimes be several thousand dollars a month. It's a restriction that I suspect the drug companies actually utilize to try and market their drug by providing co-pay support.

At the same time, I think payers build it into the pricing of their insurance, so it's become a big part of what happens. It's almost a dance between practices and payers. But it takes a tremendous amount of time and effort, and I'm not sure that it accomplishes a whole lot.

CH: Wow. There's a lot that we could unpack there. For some of our listeners, it would help to frame this in even more realistic terms. We shouldn't use specific drugs or drug names. But I'm curious if you could provide a more concrete example of what exactly would happen to Mr. Smith in your office when you make a recommendation for a treatment, and what then ensues in terms of this specialty tier pricing?

JW: Sure. So, Mr. Smith has prostate cancer, and he is appropriately treated with a very expensive oral medication along with his castrate therapy. In doing so, I write a prescription. I send that prescription to a specialty pharmacy. They then begin doing a preauthorization process, or that preauthorization process may be done from the doctor's own office. They get preauthorization for the drug, but they find out that the patient has a 20% co-pay. This drug may cost $12,000 a year, and so the patient is now responsible for the other 20% of that cost.

If it is a commercial payer, then the specialty pharmacy will go to the drug company, and the drug company will provide co-pay support. That often requires the patient to give them a copy of their last tax return, and there will be some other requirements to show that they don't have the ability to easily pay for that co-pay. If that kind of process wasn't in place, the patient would probably in many circumstances deny the treatment and not get the best care that they deserve.

If it's a patient with Medicare, then the drug company directly providing co-pay support is called fraud. In that circumstance, the pharmacy or the practice will turn to foundations that help provide co-pay support, and try and get the patient foundation support. You're better apt to do that in January or early in the year than you are in November or December, because foundations tend to run out of money. So, you run around scrounging up foundation support for your patient until you're able to do it. That creates delays that can sometimes last weeks before you can initiate a treatment.

CH: And not to put too fine a point on it, but in this example, you recommended a specific therapy, and ultimately the patient getting it, the delay is really in scrounging up or managing the co-pay through these various channels. Is that a fair assessment of what you've described? 

JW: That's exactly right and the patient will almost always get the drug, but there can be considerable delays.

CH: That answers, in a sense, the next question, that the concern about the overall impact of this kind of approach on individual patients is a delay in terms of needed therapies. And sometimes that might be a critically important one, but other times it might be honestly less critical. It's also a lot of work, and there's a lot of expense on the side of the practice in navigating this. Is that also a fair assessment?

JW: Yes. And none of that is, of course, reimbursed. It's become an expected part of practice, but it is a burden on practices.

CH: Just out of curiosity, what do you think the alternative would be? Since all of this seems to boil down to the fact that there is a co-pay, and there are multiple ways of mitigating the impact of the co-pay on the actual individual patient. What would the alternative to this actually be?

JW: Well, I think in a perfect world, the alternative would be that the patient would not have the co-pay, and the drug companies would admit that they're actually lowering their price significantly when they provide co-pay support, and patients would pay less. We wouldn't have to go through the dance now. That seems, at this point in time, unrealistic. But I think that right now, the payers really have this locked into their cost of their insurance, so, it is a dance that's expected. If there was a way to get rid of that, that would be great. One suggestion that has been made is that part D drugs that are cancer drugs actually get moved to part B, and that they get paid for that way for Medicare patients. And then the co-pay issue with part D drugs goes away for the Medicare patients.

CH: And then maybe some policy might follow on the commercial side. Maybe not, right?

JW: That may follow. But the commercial side is a little bit easier, because on the commercial side, you can get direct support from the pharmaceutical company for their co-pay, and you can't do that for Medicare patients.

CH: OK. So, let's (forgive the pun) take the next step and talk about step therapy. As I understand it right now, the White House and Congress, along with ASCO and other stakeholders, we are all working in a fairly collaborative way to try to talk about and start to address the high cost of prescription drugs here in the U.S. One part of these efforts from CMS has been to propose expanded use of step therapy. Can you describe what step therapy would look like for a patient with cancer?

JW: Sure. I think that some of us prefer the phrase "fail first" to "step therapy," because that's more descriptive of what it is. Step therapy is the idea that before you can get drug B, you have to use and fail drug A. Most step therapy is based on price of the drug. And we don't think that that applies very well to patients with cancer.

For most of our patients, there is a best drug for them. To have to use inferior drugs to get to the best drug is problematic, not just in time and delays, but we know that disease evolves over time. If you use an inferior drug first, the superior drug may not work nearly so well as a second-line therapy.

In an ideal situation, hypothetically, were there two drugs that on average offered the same response rate, progression-free survival, overall survival, and similar toxicities where one costs less than the other, this approach might make sense, assuming there weren't mitigating factors at the individual patient level. It's fair to point out, I think, that in other domains outside of oncology, classically blood pressure management, step therapy has been accepted and is reasonably successful.

Listen to the full podcast online or through iTunes or Google Play, and find the latest news on health policy and ASCO’s advocacy efforts at ASCO in Action.


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