By Stacey Worthy
June 10, 2016 at 5:00 am ET
Many consumers may not have heard of the Institute for Clinical and Economic Review (ICER), but it regularly makes decisions that could impact the healthcare that you and your loved ones receive.
ICER is a nonprofit that that publishes research on the cost-effectiveness of drugs to help payers determine drug coverage decision. The group uses a measurement known as Quality Adjusted Life Year (QALY) – the hotly debated method used to assess the financial value of medical interventions that led to a bitter debate when Congress was considering the Affordable Care Act. A healthy person is worth one QALY, but having a disease or illness will reduce that to a fraction. An individual with a disability or disease is “worth” less than other people.
Using this metric to place a numeric value on lives based on health can lead to rationed healthcare as a result of cost cutting measures. Recently, national pharmacy benefit managers Express Scripts and CVS Health said they would reject most applications for new groundbreaking cholesterol reduction drugs following an October 2015 ICER report. Wisely, the Affordable Care Act prohibits the federal government from using QALYs to “determine coverage, reimbursement, or incentive programs” for Medicare beneficiaries.
Health insurers love the QALY, as it allows them to exclude expensive drugs from their formularies. Given that the “independent” ICER receives a large percentage of its funding from health insurance companies and its Board of Directors and governing board are primarily comprised of members from these very same companies, it is no surprise ICER loves it too.
So what’s the concern? The Obama administration is revamping Medicare Part B to change how the program pays for certain medications to encourage the use of cheaper options. As part of the new rule, the Centers for Medicare and Medicaid Services (CMS) announced it would use ICER’s research, which account for QALYs when assessing drugs and when deciding how to price medications. Revamping Medicare Part B is understandable – using measurements prohibited in legislation passed by our government is irresponsible if not downright illegal.
This type of practice stretches far beyond Medicare members. ICER has issued several reports that use “value-based” rationing formulas to recommend price caps for medications that treat rare, chronic, and life-threatening conditions. Insurers can use the price cap recommendation to demand lower prices or refuse to cover the treatment altogether.
Health insurers are also using ICER’s recommendations to justify burdensome cost saving measures that restrict access to lifesaving treatments, such as step therapy, or “fail first policies.” Under these policies, the insurer requires the patient to try and fail on a less expensive medication before he or she can access the more effective treatment prescribed by his or her doctor. For many patients, these policies not only result in a delay in appropriate treatment that they cannot afford, but they may also suffer adverse events in the process.
This game of Russian roulette is played every day. Consumers can find their health at risk because their insurance companies wanted to boost profit margins until they are sure patients are sick enough for the medications prescribed by their doctor – the only person who has personally evaluated the medical condition.
In addition to delays in care and restrictions on access to life-saving medications, ICER’s rationing formulas lead to treatment that is inconsistent with medical standards of care. Insurers may impose overly restrictive medical necessity requirements on more costly treatments, such as with Hepatitis C. While we know newer Hepatitis C medications cure 90 percent of patients who take them, insurers are actually requiring patients to wait until their disease progresses to the point where they need a liver transplant before receiving the more expensive treatment. These extra requirements are inconsistent not only with FDA approval but also with medical standards and clinical recommendations.
These policies resulting from ICER’s determinations require patients to go through seemingly endless hoops to have treatments deemed most appropriate for their individual needs authorized for coverage. You or someone you care about may need to get sicker before they can access the medication they need. If it looks and sounds unethical – it is.
Stacey Worthy is director of public policy for the Alliance for the Adoption of Innovations in Medicine (Aimed Alliance). The Alliance for the Adoption of Innovations in Medicine (Aimed Alliance) is a tax-exempt, not-for-profit organization that promotes the improvement of health care in the United States by supporting the development of and access to safe and novel, evidence-based treatments and technologies.