Innovations in Oncology Management – Part 2
Oral Chemotherapy Access Legislation: Impact on Oncology Practices and Their Patients
In the past decade, there has been an explosion in the number of available oral therapies for patients with cancer. In contrast to conventional intravenous (IV) chemotherapies, many of the new oral oncology drugs target specific biologic processes in cancer cells and block cancer cell growth.1 In addition to their specificity, which may translate into reduced toxicity and side effects, oral agents are convenient, especially for patients who travel long distances to reach their treatment facility.1 This trend toward oral anticancer therapies is accelerating; 25% to 30% of the drugs in manufacturers’ oncology pipelines are now oral medications. In recent years, oral anticancer drugs have become the standard of care for several types of cancer, including metastatic melanoma, non–small-cell lung cancer, and renal cell carcinoma.2
The Need for Oral Chemotherapy Access Legislation
US payers have been slow to adjust to this increase in oral anticancer therapies.1 Traditional IV chemotherapy agents, administered in the outpatient setting, are usually covered under health insurers’ medical benefit, and patients often pay a flat copayment that covers the drug as well as the cost of administration. Patients’ annual out-of-pocket (OOP) costs for these IV medications are often capped under their medical benefit.1
Conversely, oral chemotherapy medications are acquired from a pharmacy and are self-administered. As a result, they are usually covered under the health insurer’s pharmacy benefit.3 Many payers have placed oral oncology drugs on the specialty tiers of their drug formularies. For specialty drugs, patients must often pay a percentage of the drug cost, referred to as coinsurance, rather than a flat amount per prescription.4
Coinsurance percentages vary from one benefit design to another, and the same health plan may offer multiple coverage options. Regardless of the design, however, the patient’s cost burden can be substantial—up to 50% of the drug cost in some cases. Furthermore, some benefit designs do not have an annual OOP limit, adding to the patient’s cost burden.1
Because many of these oral oncology drugs cost $100,000 or more annually, patients may be responsible for large coinsurance payments.5 As a result of these factors, many state legislatures have enacted oral chemotherapy access—or oral parity—legislation.
States Adopting Oral Chemotherapy Access Legislation
Many states have passed laws within the last 6 years requiring health insurers to provide coverage for oral anticancer drugs that is equivalent to the coverage provided for traditional IV chemotherapy agents under medical benefit plans (Figure).6 In recent years, a steady stream of states has ratified oral chemotherapy access legislation, beginning with Oregon in 2008 (Table 1).6
Of the 7 states that have passed oral chemotherapy access legislation in 2014 (Table 1), the Maine, Wisconsin, and Georgia statutes have all taken effect, but apply to policies, plans, and contracts that will be continued, renewed, or executed on or after January 1, 2015. The Arizona statute, which became law on April 30, 2014, applies to policies, plans, and contracts issued, delivered, or renewed on or after January 1, 2016.7
The Missouri oral chemotherapy access law, which becomes effective on January 1, 2015, caps monthly OOP costs at $75. In addition, the Kentucky law, which was signed in mid-April 2014, will take effect on January 1, 2015.7 In Ohio, the most recent state to approve oral chemotherapy access, legislation passed on September 17, 2014, and will take effect on January 1, 2015.8
Oral chemotherapy access legislation is currently pending in several other states, including North Carolina, New Hampshire, and Pennsylvania.6,7 In North Carolina, legislation passed in the House of Representatives and is pending in the Senate Health Care Committee. However, the current bill has a cap of $300 monthly on each oral anticancer medication, and efforts are under way to amend the existing legislation to provide for an OOP cap of $100 per medication.9 In Pennsylvania, legislation passed in the House of Representatives on October 7, 2014, and was referred to the Senate Banking and Insurance Committee, where it is currently pending action.10
Variance in State Oral Chemotherapy Access Legislation
Oral chemotherapy access laws vary from state to state, and practice administrators should familiarize themselves with specific coverage stipulations in the state in which their practice is based. Most but not all states have a stipulation that prevents health insurers from raising patient cost-sharing for IV chemotherapy agents to achieve parity with oral drugs.6 Although the specific language may vary to some degree, the intent of these clauses is the same. For example, Texas Stat §1369.204 states that “a health benefit plan insurer may not reclassify anticancer medications or increase a coinsurance, copayment, deductible, or other out-of pocket expense imposed on anticancer medications to achieve compliance….”11
Ten states have instituted caps on the maximum copayment amount that insured patients are required to pay per prescription. In keeping with the legislation, these caps apply equally to orally and intravenously administered chemotherapy agents. The OOP caps vary from state to state, and range from $50 to $200. Table 2 shows the OOP patient spending caps for the 10 states with this requirement in their oral chemotherapy access legislation.6
Pending Federal Legislation
Oral chemotherapy access laws pertain only to state-regulated, private, individual, or group insurance plans that cover chemotherapy agents. These laws do not apply to Medicare beneficiaries or patients covered by self-insured plans in which the employer assumes the financial risk for providing healthcare benefits to its employees. Both of these are exempt from state law by the federal Employee Retirement Income Security Act of 1974 (ERISA).12 The federal government, rather than individual states, has jurisdiction over insurance regulation for the approximately 131 million Americans covered under Medicare and self-insured plans.13
Efforts are under way to implement oral chemotherapy access legislation at the national level to protect individuals who are covered by Medicare and self-insured plans. On April 26, 2013, Rep Brian Higgins (D, New York) introduced H.R. 1801, the Cancer Drug Coverage Parity Act, which had 64 bipartisan cosponsors at the time this article was written. Similar to existing state oral chemotherapy access laws, the legislation seeks to amend ERISA, the Public Health Service Act, and the Internal Revenue Code of 1986 to require group and individual health insurance coverage and group health plans (including self-insured entities) to provide for coverage of oral anticancer drugs on terms no less favorable than the coverage provided for anticancer medications administered by a healthcare provider.14
Furthermore, health insurers covered under the law would not be able to increase the patient OOP costs for IV medications in order to comply with the law. The pending H.R. 1801 legislation, however, does not mandate patient OOP spending caps, but states that deductibles, copayments, and coinsurance of oral anticancer therapies should not exceed deductibles, copayments, and coinsurance of chemotherapy agents that are administered by healthcare providers. In addition, the law would not restrict insurers’ ability to require prior authorization or other utilization controls before approving coverage for chemotherapy drugs.14
Similarly, Sen Al Franken (D, Minnesota) introduced the Cancer Treatment Parity Act (S. 1879) to the Senate on December 19, 2013. The language of S. 1879 is very similar to that of H.R. 1801.15
The majority of first-line anticancer chemotherapy agents have historically been administered intravenously to patients in the physician’s office. In recent years, however, pharmaceutical manufacturers have developed a number of oral chemotherapy agents that can be taken at home. Today, oral chemotherapy drugs comprise more than 25% of the medications in the oncology development pipeline, indicating a growing role of oral chemotherapy agents for the treatment of patients with cancer.2
Medications that are administered intravenously are typically covered under a health plan’s medical benefit. Orally administered chemotherapy agents, however, are typically covered under a health plan’s pharmacy benefit, often resulting in higher OOP costs for patients. About two thirds of states have enacted legislation restricting the OOP cost disparity between IV and oral chemotherapy agents, including 7 thus far in 2014. Although specific state laws vary, all seek to equalize patient sharing for intravenously and orally administered anticancer drugs. Efforts are under way in the House and the Senate to enact similar federal legislation.
Because the OOP burden of paying for cancer treatment can be substantial for patients with cancer, oncology practice administrators, financial counselors, and others are advised to keep abreast of state and federal legislation that may affect their patients’ ability to pay for their medications.
- Andrews M. Some states mandate better coverage of oral cancer drugs. Kaiser Health News. www.kaiserhealthnews.org/Features/Insuring-Your-Health/2012/cancer-drugs-by-pill-instead-of-IV-Michelle-Andrews-051512.aspx?p=1. Published May 14, 2012. Accessed November 7, 2014.
- Ness S. Current oncology pipeline trends. Specialty Pharmacy Times. www.specialtypharmacytimes.com/publications/specialty-pharmacy-times/2013/May_June-2013/Current-Oncology-Pipeline-Trends. Published May 29, 2013. Accessed November 7, 2014.
- Council for Affordable Health Insurance. Policy trends: a closer look at the oral chemotherapy parity mandate. www.cahi.org/cahi_contents/resources/pdf/PolicyTrendsOralChemoOct2012.pdf. Published October 2012. Accessed November 7, 2014.>
- Fitch KV, Iwasaki K, Pyenson BS. Parity for oral and intravenous/injected cancer drugs. Milliman. www.milliman.com/uploadedFiles/insight/research/health-rr/parity-oral-intravenous-injected.pdf. Published January 25, 2012. Accessed September 9, 2014.
- Experts in Chronic Myeloid Leukemia. The price of drugs for chronic myeloid leukemia (CML) is a reflection of the unsustainable prices of cancer drugs: from the perspective of a large group of CML experts. Blood.2013;121:4439-4442.
- International Myeloma Foundation. Oral chemotherapy legislative landscape – September 2014. http://myeloma.org/ArticlePage.action?articleId=3708. Accessed November 7, 2014.
- Stephan GM. Update on parity laws for chemotherapy. Insurance Compliance Corner. www.insurancecompliancecorner.com/update-on-parity-laws-for-chemotherapy-2. Published May 6, 2014. Accessed September 9, 2014.
- Legiscan. Ohio Senate Bill 99. http://legiscan.com/OH/drafts/SB99/2013. Accessed September 9, 2014.
- American Cancer Society Cancer Action Network. North Carolina action center: oral chemotherapy parity. http://acscan.org/action/nc/campaigns/oral_chemotherapy_parity/. Accessed September 9, 2014.
- Pennsylvania General Assembly. Bill information. www.legis.state.pa.us/cfdocs/billInfo/billInfo.cfm?sYear=2013&sInd=0&body=H&type=B&bn=2471. Accessed November 4, 2014.
- International Myeloma Foundation. Texas’s oral anticancer treatment access law: what clinicians need to know. http://myeloma.org/pdfs/StateFactSheets/IMF/TX_Oral_Anticancer_Treatment_Law_Fact_Sheet.pdf. Accessed September 9, 2014.
- Self-Insured Institute of America. Self-insured group health plans. www.siia.org/i4a/pages/Index.cfm?pageID=4546. Accessed September 9, 2014.
- Alliance for Health Reform. ERISA regulation of health plans: fact sheet. www.allhealth.org/briefingmaterials/erisaregulationofhealthplans-114.pdf. Updated March 6, 2003. Accessed November 7, 2014.
- H.R.1801.IH. Cancer Drug Coverage Parity Act of 2013. http://thomas.loc.gov/cgi-bin/query/z?c113:H.R.1801:. Accessed November 7, 2014.
- S.1879. Cancer Treatment Parity Act of 2013. https://beta.congress.gov/bill/113th-congress/senate-bill/1879. Accessed September 9, 2014.