Report Cites 15 New York State HMOs For Setting Consumer Restrictions On Prescription Drugs To Boost Profits

Main Category: Health Insurance / Medical Insurance
Also Included In: Pharmacy / Pharmacist
Article Date: 21 May 2008 - 10:00 PDT

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Some HMOs in New York state are restricting patients' access to so-called single-source drugs, brand-name medications for specific ailments that do not have lower-cost generic versions, according to a report released on Sunday, the New York Daily News reports. The report, released by state Sen. Jeffrey Klein (D), involved a survey of the 15 HMOs with drug plans in the state -- including Aetna, Oxford Health Plans, Cigna, Health Insurance Plan of New York, Group Health Associates and HealthNet of New York. Klein surveyed the HMOs to determine how and whether the companies restrict prescriptions to 20 common single-source drugs.

The survey found several restrictions had been placed on consumers, such as a "medical exception," meaning that a patient and physician had to obtain prior permission from the insurer for coverage of a drug, which could be granted at the discretion of the company. Other insurers set quantity limits on certain drugs or implemented a "step therapy" rule, under which patients had to try one or more other medications before seeking approval for a prescribed drug.

Klein said, "It's a dangerous situation. Clearly when a doctor prescribes a specific medication for a patient, and they know that drugs works for a patient, they shouldn't be forced to use a generic drug or cheaper alternative that may not work."

The New York Health Plan Association, which represents almost all the HMOs cited in the report, dismissed the research as "simplistic and broad-brushed hyperbole that demonizes the HMO industry." Leslie Moran, a spokesperson for the trade group, said, "It is somewhat hypocritical of [Klein] to criticize HMOs for efforts to control rising drug costs when Sen. Klein himself has voted for similar measures that would control drug costs overall in the Medicaid and other state-sponsored programs," adding, "HMO plans' policies on prescriptions are aimed at making sure that drug coverage is affordable and therefore accessible to HMO purchasers -- employers and consumers."

Moran said, "If there weren't control mechanisms, we wouldn't have prescription coverage offered, and people would be paying far more -- full cost -- instead of a" copayment (Sherman, New York Daily News, 5/18).

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© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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