The complaint filed with the U.S. Department of Health and Human Services’ Office of Civil Rights by the National Health Law Program and the AIDS Institute against four Florida insurers is a welcome opening salvo in the enforcement of the Affordable Care Act’s (ACA) prohibitions against discriminatory practices by Qualified Health Plans (QHPs) that have plagued the health insurance world for decades. While the complaint mentions other statutes as its basis, it is clear that the ACA’s provisions provide the strongest impetus.
The complaint is based on an analysis that compared the pharmacy benefit structures of the 36 silver level QHPs offered on the Federally Facilitated Marketplace to Florida residents. The analysis, conducted by the AIDS Institute, revealed that the four insurers (Coventry One, Cigna, Humana, and Preferred Medical) have configured their pharmacy benefits in a manner that would discourage enrollment by persons with “significant health needs, including those living with HIV and AIDS.”
The complaint states that enrollment of persons living with HIV and AIDS is discouraged because, in their silver level QHPs, the named insurers assigned drugs involved with anti-retroviral therapy (ART) — the recommended treatment for those with early HIV infection and those living with HIV and AIDS — to high “specialty drug” tiers that require large deductibles, sometimes combined with large copayments, high levels of coinsurance, and burdensome prior authorization requirements. The complaint noted that, for those who need ART drugs, even a brief interruption can weaken the drugs’ preventive effects. High levels of cost sharing and prior authorization requirements can serve as roadblocks to access and are often the cause of such treatment interruptions.
The regulation implementing the health insurance issuer standards under the ACA prohibits discrimination against individuals seeking or securing coverage on the basis of race, color, national origin, disability, age, sex, gender identity, or sexual orientation. The same regulation prohibits health insurers from employing marketing practices or benefit designs that will have the effect of discouraging the enrollment in QHPs of individuals with significant health needs.
There are several reasons why this complaint should be welcomed by the regulatory and advocacy communities. In the past 18 months, my colleagues and I conducted form review and consumer services workshops in seven states through the Robert Wood Johnson State Health Reform Assistance Network. During those workshops, a common conclusion resulted from discussions of the ACA’s anti-discrimination provisions. The general consensus among regulators was that discriminatory benefit designs might be difficult to spot on the “front end” when policies are being reviewed for compliance with state and federal requirements. That’s because insurers have the resources and experience to develop – if they were so inclined — discriminatory benefit designs in ways that are not easily detected during a routine regulatory form review.
The Centers for Medicaid and Medicare Services (CMS) in recent guidance to issuers stated that it would perform outlier analyses of QHP cost sharing and promised to review plans that require prior approval or step therapy for unusually large numbers of drugs of the same class. Yet, as stated in the complaint, because this discrimination “is often based on long standing and pervasive benefit design customs in the insurance industry ,“ outlier analysis is not likely to be successful in uncovering discriminatory designs.
My colleagues Katie Keith, Kevin Lucia, and Christine Monahan, in a 2013 report drew similar conclusions. They found that states need more federal guidance and more new tools and resources to identify discriminatory benefit design on the “front end,” before the policy is offered to consumers. They also cited multiple challenges that regulators face while attempting to identify prohibited designs, like insufficient resources for comprehensive reviews and limited clinical expertise among form reviewers.
The general agreement among the regulators we have worked with, that it will be difficult to detect discriminatory designs created by savvy insurance company policy developers during the form review stage, will result in the reliance on “back end” regulation – complaints, complaint trends, and information uncovered through market conduct examinations — to identify discriminatory benefit designs. However, it’s doubtful that many expected this “back end enforcement” to begin so soon after the first QHPs became effective on January 1, 2014. And, while the Florida complaint was not filed by regulators and is not exclusively based on the ACA’s prohibitions against discriminatory benefit designs, it is welcomed as an initial attempt to test enforcement of the prohibitions.
Another reason to celebrate the complaint is that it targets a benefit design practice that has been the subject of much controversy. Pharmacy benefit designs that assign drugs to different tiers with escalating levels of cost sharing have been part of health insurance benefit designs for decades. And, specialty drug tiers – the assignment of certain drugs that may or may not be more expensive than most to tiers with very high levels of cost sharing and other burdensome requirements — while a more recent development, were creeping into benefit designs before the passage of the ACA. Specialty tiers have been the bane of consumers who live with expensive and chronic illnesses and the advocates who represent them. That’s because the drugs that are most effective in treating serious chronic illnesses, like cancer, hemophilia, or HIV and AIDS, are often placed in specialty tiers, thus creating the worst barriers to access for those who are most vitally in need of these drugs.
The practice is so pervasive that at least five states have bills pending that limit cost sharing for specialty drugs, and Maryland recently enacted a law that limits cost sharing for specialty drugs to $150 in a 30-day period. There is even a bill pending in Congress, H.R. 460, that would require insurers to charge no more for a specialty tier drug than it does for any other drug in a preferred drug tier, but it has not moved forward. And, advocacy groups have created resources to assist their members in advocating for specialty tier cost sharing limits, like the Hemophilia Federation of America’s specialty tiers tool kit.
The Florida complaint has the potential to make groundbreaking changes in the health insurance regulatory and advocacy worlds. So, it’s likely that those communities were cheering last week when news of the complaint was released. In addition to addressing one of the worst benefit design abuses in recent years, the complaint and its eventual resolution will, hopefully, inspire and embolden regulators to find ways to rigorously enforce the ACA’s anti-discrimination provisions.