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Step Edits: Insurance-Dictated Choices Put Some MS Patients at Risk

This issue of InforMS describes the serious efforts of expert physicians to identify the best strategies to treat people with multiple sclerosis. Unfortunately, however, there is another critical decision maker that has been injected into the process: health insurance companies. As many people with MS know, the drug that a doctor and a patient agree upon may not be one that your insurer will cover. Th e health insurance company may have determined that it will only pay for a different drug, at least at first. Given the extraordinary expenses involved, the drug that your insurance company has determined that it will pay for will very likely trump all other considerations. In effect, many people are treated according to their health insurer’s preference rather than according to the decision that they arrive at jointly with their physicians.


One of the most common ways that insurance companies have to compel the use of particular medication is through a mechanism known as a “step edit.” Step edits, sometimes referred to as “fail-fi rst policies,” require patients to try drugs in a particular order. For example, assume that a patient and her physician determine that Drug A would be the best choice of medication to prevent disability. Nevertheless, her insurance company may decline to pay for Drug A pursuant to its step edit policy. Th e step edit policy may require that she try Drug B fi rst. And only if the patient “fails” this therapy—usually meaning that she loses function, has new damage to her brain as seen on MRI, or has side effects — will the insurance company pay for the drug that she wanted to use in the fi rst place. Worse, some step edit policies have multiple steps. A two-step edit policy may require that she try a Drug C prior to agreeing to pay for Drug A. In this example, only if using Drug C also results in her losing function, having new lesions on MRI, or having side effects, would the insurance company’s step edit policy cover Drug A, that the physician ordered in the first place.

A real-life example of a triple step-edit policy relating to Tysabri is above. It is an Aetna policy that applies to people covered by a non-Medicare prescription drug plan (but not necessarily to self-insured policies).

Step edits are a mechanism designed by health insurers to control cost. Usually, but not always, this means that patients are expected to try cheaper drugs before trying more expensive drugs.
In some cases, especially with generic medications, this is perfectly reasonable. Health care costs in the Unites States have been rapidly escalating for years and medications costs, especially, are very expensive. Accordingly, insurance company initiatives to rein in health care costs are understandable, even necessary.


But the retail price of the medications is not the only factor. Oft en, insurance companies hire pharmacy benefi ts managers (PBMs) to negotiate with pharmaceutical companies for lower drug prices. Th is is a highly opaque process whereby PBMs seek “rebates” (or kickbacks) from pharmaceutical companies, some of which may be passed on to insurance company as a cost savings. In other words, pharmaceutical companies sometimes pay PBMs to make their medications more widely available to patients pursuant to a step edit policy.  Accordingly, health insurers sometimes require the more expensive medication (based on retail price) to be tried prior to less expensive medications.  Other medications may continue to be available, but only through a highly constrained step edit process.

The number of insurance plans that use step edits is growing rapidly. In 2010, nearly 60 percent of commercial insurers were using step therapy. As of 2014, 75 percent of large employers reported offering employees plans that use step therapy. Three large PBMs — ExpreessScripts, CVSCaremark, and OptumRx — control about 80 percent of the market.


Step edits can cause serious harm when applied to patients with MS. Ms. Smith (not her real name), a patient at the Rocky Mountain MS Center, has first-hand experience with the harm that step-edit policies can cause. She had been doing well on Gilenya, which, due to a lack of insurance, was provided free by the maker of the drug, Novartis. But she then qualified for Medicaid, so she was no longer able to get the medication free of charge. Like private insurers, Medicaid had a step edit policy. According to the step edit policy at the time, she was expected to use an injectable first.

However, because of her fear of needles, she could not use the products preferred by Medicaid. In addition, due to the severity of her MS, which included lesions in her spine, her physician wanted her to be taking Gilenya.  Based on clinical trial data, her neurologist was convinced that Gilenya was more likely to prevent relapses that could lead to disability.  While Medicaid was considering allowing her to bypass their step edit requirements, she remained untreated.

During this four or five-month period without treatment, Ms. Smith experienced a relapse requiring hospitalization. Although she had been fully ambulatory prior to the relapse, she was discharged from the hospital needing bilateral support. She now needs at least a cane to walk. But for the combination of step edit policies and cumbersome appeals, her disability was almost certainly preventable.


Step edit policies have not entirely escaped legislative scrutiny. Both federal and state laws establish review mechanisms for insurance coverage denials. For example, Medicare allows physicians to avoid step edit’s by submitting a statement “that the preferred drug(s) would not be as eff ective as the requested drug for treating the enrollee’s condition, the preferred drug(s) would have adverse effects for the enrollee, or both” along with a statement of rationale.

Very few people appeal an insurance company’s denial of benefi ts beyond the insurance company’s internal review process. However, those whose prescription coverage requests are denied have right a clear right to appeal, a process called external review; insurance companies must provide information about how to start an external review. According to a federal government report, which was prepared in 2011, only 0.5 percent of all denials are further appealed. Th e reason for this is unclear. According to one commentator (Hoffman, see references below), “While some may not have been upset by adverse decisions, it is likely that many others did not know that appealing was an option or did not have the mental ability or energy to initiate appeals.” Th e external review process is an underused mechanism for obtaining needed coverage. As a last resort, patients with private employer provided insurance benefits can sue in federal court.


As of 2017, 13 states had passed legislation addressing step therapy, but no state has prohibited step legislation. Laws in other states provide other protections, such as requiring that duration of fail first policies be no more than thirty days (this would be of no help to MS patients), or requiring that appeals be considered expeditiously, such as within 72 hours.

In 2017, for example, Colorado passed a law restricting step edits in a very specific situation. To summarize, if a patient had been stable on a particular medication and then changed her health insurance, then the new insurer could not require step edits that would result in discontinuing the medication she had been on.  The Colorado law is typical and sensible as far as it goes but leaves many patients and all newly diagnosed patients unprotected.

The Colorado bill, as originally introduced, prohibited step edits for patients with terminal conditions.  This was a good idea but did not go far enough. A better bill would have protected patients with terminal conditions, such as cancer, as well as patients with conditions that are progressive and disabling, such as multiple sclerosis.  And better still, such a law would be enacted at the federal level.


There is very little data available regarding the negative impact on care that step edit policies have among people with MS. But the practice is fundamentally concerning because it is the antithesis of individualized medicine.  Individualized medicine is what happens when expertly trained physicians use science to tailor treatments to their patient’s specific clinical characteristics and values. Step edits interfere with this process.

The Rocky Mountain MS Center would like to begin collecting this kind of data. If you think you have been harmed by step edit policies, please contact the Rocky Mountain MS Center by sending an email to publishing@mscenter.org. Also, if you have a claim that you would like to appeal after a final insurance company denial, we may be able to help. We would like to hear your story!


“Step Therapy Legislation.” American Academy of Dermatology, https://tinyurl.com/InforMS-Summer18-1.

United States, Congress, Government Accountability Office, and John E. Dicken. “Private Health Insurance Data on Application and Coverage Denials.” Government Accountability Offi ce, 16 Mar. 2011. https://tinyurl.com/InforMS-Summer18-2.

“External Review.” HealthCare.gov, https://tinyurl.com/InforMS-Summer18-3.

Hoffman, Sharona. “Step Th erapy: Legal and Ethical Implications of a Cost-Cutting Measure.” Scholarly Commons, Case Western Reserve University, 2018, https://tinyurl.com/InforMS-Summer18-4. Accessed 31 May 2018.

“External Appeals.” Centers for Medicare & Medicaid Services, Th e Center for Consumer Information & Insurance Oversight, 21 Mar. 2016, https://tinyurl.com/InforMS-Summer18-5.


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