Battling the HMO Formulary
Your health plan may not cover the drugs you want.
WebMD Feature If your case is average, your managed care plan spends about $117 on you each year for prescription medicines. The typical managed care plan spends a considerable chunk of its budget -- an average of 11% -- on prescription drug costs, according to the SMG Marketing Group in Chicago, which gathers this data each year.
So from a business point of view it's understandable why managed care organizations want to cut costs on prescription drugs as much as they can.
Thus was born the formulary -- the list of drugs that doctors may prescribe under the plan. Typically, a managed care plan relies on a committee made up of physicians and others to decide which drugs will appear on its formulary. The committee evaluates the safety and effectiveness of each drug, and if they judge that two drugs are equally effective, they generally opt for the one that costs less.
Some disgruntled consumers say formularies are all about saving money. But that's not so, says Susan Pisano, a spokeswoman for the American Association of Health Plans, an industry organization in Washington, D.C. "Formularies are put together with quality trumping cost," she says.
But drug manufacturers pressure the committees to include their products, says Steven Gray, PharmD, the pharmacy professional affairs director for the California division of Kaiser Permanente. "Drug manufacturers' sales representatives are trained and motivated to sell their drugs, and there are big bucks involved."
Complaints about formularies are common, says Laurie Norris, a supervising counselor for the Health Rights Hotline, a pilot project based in Sacramento, California, that helps consumers navigate managed care. "It's one of our highest reported problems," she says. What's more, she says, "managed care plans change formularies constantly," making matters more complicated.
Consumers may get some help if a new federal bill becomes law. Introduced in November and called the Patients' Formulary Rights Act of 1999, the bill would require managed care plans to inform their members about their formularies, provide them with a list of included drugs, and tell them how they can continue to get needed drugs if the formulary changes.
In the meantime, though, most consumers with formulary problems must be their own advocates. So what if there's a drug you need and it's not on the formulary? Or suppose you change HMOs and the prescription drug you've been taking successfully for months isn't on the new plan's list? What can you do?
The Strategy: Learn About the Formulary
First find out exactly what kind of formulary your plan has. Some have a single formulary list. Others include restrictions on some drugs, prescribing them only for certain conditions.
Still others have a three-tier plan. These plans allow you to choose a generic drug on the formulary, a name brand on the formulary, or a drug not on the formulary at all. But, Pisano says, your co-payment goes up when you choose the name brand over the generic, and the third option costs you the most of all.
Ask for an Exception
If necessary, consider asking for an exception. "Our code of conduct requires an exceptions process," says Pisano. "That does not mean the drug will definitely be covered. It means the doctor can talk to the plan officials and make a case."
In some plans, the doctor himself can request an exception. Such is the case with Kaiser Permanente, says Gray. Take the scenario where you've been doing well on a drug and then switch to a different plan that doesn't include the drug in its formulary. If the doctor decides that drug is best, "he writes a formulary exception prescription," Gray says. "Unless there is a market shortage of a drug, it will be done." Once a doctor makes the decision, it stands, Gray says -- with one possible exception: Other doctors in the plan who question the decision may ask the doctor requesting the exception to reconsider.
Some managed care plans require you to try out other drugs on the formulary that are prescribed for your condition before you can ask for an exception, says Norris. She advises consumers to find out which drugs are on their plan's formulary. Most plans have a member services department you can call for this information. Citizens for the Right to Know, a nonprofit organization, also posts information on formularies of California health plans on its Web site at www.rtk.org.
Appealing the Decision
If asking for an exception doesn't get you the results you want, find out what your plan's appeal process is. For suggestions on how to appeal, see the Web site of the Health Rights Hotline, which includes sample letters on requesting coverage for a non-formulary drug.
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