Members-only Site   |   Print Page   |   Contact Us   |   Sign In   |   Register
Capitol Connections Article [Insurance Letters Information] [09.11.13]
Share |

Member Alert: Some Insurers Plan to Halt Coverage of Compounded Medications

 
IACP Members: What your prescribers and patients should know…
 
Key Points:
 
  • Some health plans intend to discontinue coverage for compounded medications.
  • The International Academy of Compounding Pharmacists strongly believes that the question of FDA approval of compounded drugs is not a concern.
  • Tricare, Harvard Pilgrim Health Care and Anthem, which runs Blue Cross Blue Shield plans, have all announced an intended change.
  • Many insurers for years have routinely paid for scores of drugs that are not FDA approved, including any drugs developed before the federal Food, Drug, and Cosmetic Act of 1938. No full rationale has been stated for why coverage of these medicines is being discontinued at this time.
  • There have been multiple challenges to these insurers’ actions, including civil actions in court and actions by state agencies in Massachusetts (in the case of Harvard Pilgrim); and appeals to Congress (Tricare), which resulted in the Plan’s agreement to delay implementation of the policy change for 90 days).
  • If patients find that their compounded medicines, previously covered by insurance, are no longer paid or partially paid for, they should be advised to contact their health plans to complain. Until this complicated issue is resolved, prescriptions will have to be purchased out of pocket in many cases.
 
Background:
 
The landscape of compounding pharmacy, including the policies of the federal Food and Drug Administration (FDA) and of insurers, continue to change in the wake of the tragic injury and loss of life that followed the problems that were uncovered in fall of 2012 at the New England Compounding Center in Framingham, MA (which is no longer in business).
 
There was no intent in the law that created the FDA in 1938 to place all compounded medicines in use under FDA scrutiny.
 
Harvard Pilgrim Health Care
 
Harvard Pilgrim Health Care’s elimination of such coverage for patients 18 and over, announced in June, was scheduled to take effect on Aug. 7, 2013. There was an immediate outcry, and a group of three independently owned Massachusetts pharmacies filed suit in Norfolk Superior Court alleging that the decision violated Massachusetts law and the insurer’s contracts. A separate civil complaint was filed in U.S. District Court in Boston on behalf of a Harvard Pilgrim member, also seeking an injunction and claiming class-action status on behalf of other patients. The pharmacist suit was dismissed and the class-action suit was put on hold as both the state’s Division of Insurance and Attorney General both forced Harvard Pilgrim to revise their letter terminating coverage and to provide for a medical necessity review. Click here to view Harvard Pilgrim Letter - Side 1.  Click here to view Harvard Pilgram Letter - Side 2.
 
Tricare
 
Recently Tricare, which is a health insurer to the military and military families, has tried to eliminate coverage of compounded medicines, but it has delayed the change in policy for 90 days, following pressure from Congress and groups including IACP. Tricare sent letters to plan participants telling them that as of July 24, 2013, any compounded medicines prepared with active pharmaceutical ingredients (APIs) – or bulk ingredients – would no longer be covered, claiming the plan does not cover “non-FDA-approved drugs.” TriCare and its contracted pharmacy benefit management company, Express Scripts, have been reimbursing such compounded medications for a decade. Click here to view Tricare letter.
 
Anthem
 
Anthem Blue Cross Blue Shield, which is part of Wellpoint, one of the nation’s largest insurers, decided to end reimbursement as of Nov. 1, 2013, for compounded medications that are made from bulk ingredients. An Anthem newsletter stated that the reason is “the recent enhancement of the HIPAA (Health Insurance Portability and Accountability Act) standard for electronic submission of prescription drug claims….” It said that for a compounded medicine to be covered it must contain at least one ingredient that requires a prescription and that ingredient must be approved by the FDA.
 
Many insurers for years have routinely paid for scores of drugs that are not FDA approved, including any drugs developed before the federal Food, Drug, and Cosmetic Act of 1938. These included such popular drugs as Thyroxin, one of the more commonly prescribed medications. So the question that needs to be answered is: Why did they just now determine that this is not a covered benefit? Is this simply an excuse to save money, under the cover of the cause of safety, an opportunistic reaction to the confusion over what is the appropriate remedy for what happened at NECC? Click here to view Anthem letter.
 
Blue Cross Blue Shield of Michigan
 
Blue Cross Blue Shield of Michigan (BCBSM) announced that they will no longer cover compounded hormone products as of November 1, 2013. BCBSM will no longer cover compounded hormone prescriptions that contain any of the following ingredients: estradiol; estrone; hydroxyprogesterone caproate; methyltestosterone; progesterone; and testosterone. Please click here to view the BCBSM letter.
 
What Can You Do?
 
If your patients find that suddenly their compounded medicines, previously covered by insurance, are no longer paid or partially paid for, they should be advised to contact their health plans to complain. For those in plans other than Tricare, they should also complain to the employers who purchase these plans for their employees, such as through a contact in Human Resources. For those who have employer-based coverage, open enrollment provides the opportunity to switch to other plans that cover compounded medications, if such plans are offered. Until this complicated issue is resolved, prescriptions will have to be purchased out of pocket in many cases.
 
Any patient whose insurance company is planning to stop paying for compounded medications should immediately call their employer's Human Resources department and explain how this will impact their health, well-being and productivity.
 
IACP needs to know if you've received a letter or information from a third-party payor we don't have on our list. Please scan and e-mail it to iacpinfo@iacprx.org.                                                                    
 

 

 

Association Management Software Powered by YourMembership  ::  Legal