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Prescription: Washington

HHS Alters Formulary Exception Policy for 2015

QHPs Must Respond Within 24 Hours to “Expedited” Requests
Stephen Barlas

Qualified health plans (QHPs) sold on federal and state health insurance marketplaces have new drug formulary rules to comply with in calendar 2015. Those rules describe what kind of documentation patients or their physicians must submit to a health plan in order to possibly receive an off-formulary drug. The Department of Health and Human Services (HHS) does not go so far as to require QHPs to provide off-formulary drugs, although there is a whiff of a mandate in the final rule the HHS issued on May 27, 2014.1

The Centers for Medicare and Medicaid Services (CMS), the HHS unit that published the final rule, established minimum essential health benefits (EHBs) in 10 categories for 2015. Pharmaceuticals is one of the 10. In adjusting the formulary exception policy within the pharmaceuticals category, the CMS had to walk a narrow line between insurers and some drugstore companies, on the one hand, who said there is no problem accessing off-formulary drugs, and drug companies and their patients, on the other hand, who complained particularly about access to combination products, where two drugs are necessary to treat a condition and one may be off-formulary.

In arguing against any change, the Blue Cross and Blue Shield Association (BCBSA) noted most commercial plans already have exception processes in place that have been used for years and have been developed and vetted by P&T committees that include providers, pharmacists, and other clinical experts. The BCBSA argued it is in the best interest of insurers to provide off-formulary drugs to control the health care costs of patients. Moreover, the BCBSA said, average turnaround times for urgent exception requests are within six hours.

The drug manufacturers wanted the feds to issue a new regulation, which would have sturdier legal standing, establishing minimum standards for exception processes. GlaxoSmithKline (GSK) “is concerned that insurers may implement countless exception protocols that are both confusing to navigate through the appeals process and cause unnecessary delay in a patient starting an appropriate medication,” states Donna E. Altenpohl, Vice President for Public Policy at GSK.

The HHS does require QHPs to have an “exception process” for determining whether a plan member should be given an off-formulary drug. But that is the extent of the requirement: Have an exception process. QHPs have apparently developed numerous, different kinds of exception processes, some of them apparently quite good, others less so. The HHS said in its final rule, as a reason for adding new, albeit limited specificity in calendar 2015: “We have heard from several stakeholders about enrollee difficulty in accessing, understanding, and using issuers’ exception processes ... since there is currently no requirement for uniformity across plans.”

So in the May 27 final rule, the HHS provides new guidelines. It adds language to the prescription drug category within the EHB mandate that allows an enrollee, an enrollee’s designee, or the enrollee’s prescribing physician to request an expedited exception process based on exigent circumstances, which are defined as when an enrollee is suffering from a health condition that may seriously jeopardize the enrollee’s life, health, or ability to regain maximum function or when an enrollee is undergoing a current course of treatment using a nonformulary drug. The QHP must respond within 24 hours.

The new policy describes what kind of documentation a physician must provide. That is either an oral or written statement that: 1) an exigency exists and the basis for the exigency (that is, the harm that could reasonably result to the enrollee if the requested drug were not provided within the timeframes specified by the issuer’s standard drug exception process); and 2) a justification supporting the need for the nonformulary drug to treat the enrollee’s condition, including a statement that all covered formulary drugs on any tier will be or have been ineffective, would not be as effective as the nonformulary drug, or would have adverse effects.

The policy, though, does not dictate when a QHP must make a favorable decision to an exception request. It just says that if the decision is favorable, the patient has to get the drug “without unreasonable delay.” And in that regard, the plan needs to communicate “rapidly” with the patient’s pharmacy or pharmacy benefit manager.

The new policy appears to apply only to expedited requests, which must meet the standards mentioned above. What about nonexpedited requests, where a patient has tried all the drugs on a QHP formulary and none works well, though their failure isn’t likely to lead to a health emergency? Or where an enrollee transfers from QHP A to QHP B, and a drug he or she has been taking on A’s formulary—a drug that has been working perfectly—is not on B’s formulary? Some groups wanted the HHS to address this “transition fill” issue and require new QHP B to provide an off-formulary drug, exigent situation notwithstanding, for a certain period. The HHS ignored that issue in its final rule.

The HHS apparently has very little data on the volume of off-formulary requests, in exigent or normal circumstances, including how many are granted and in what time frame. Neither does the Pharmaceutical Research and Manufacturers of America, a chief complainant about the shortcomings of off-formulary practices of QHPs. This seems like important data. Maybe someone should start assembling it.

  • Centers for Medicare and Medicaid Services, Department of Health and Human Services. Patient Protection and Affordable Care Act; exchange and insurance market standards for 2015 and beyond; final rule. Federal Register 2014;79;(101):30240–30353.Available at: Accessed June 24, 2014.