"how insurers make diabetes coverage decisions" at the 2014 diabetesmine innovation summit

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Amanda Bartelme, Director of Reimbursement at Avalere Health (and a type 1 herself), explains how healthcare coverage decisions are made at the 2014 DiabetesMine Innovation Summit at Stanford School of Medicine.

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Page 1: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

How Insurers Make Diabetes

Coverage Decisions

Prepared for The DiabetesMineTM Innovation Summit

Amanda Bartelme

[email protected]

November 2014

Page 2: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

Key Questions We’ll Cover

2

● Who makes decisions on what healthcare is covered?

● What information is used to make those decisions?

● How can patients and advocates influence those decisions?

Page 3: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

A Brief History of Health Insurance

3

How did we end up where we are today?

By 1958, 75% of

Americans hold

some form of

private insurance

1950s

First “Health”

Insurance

emerges,

replaces lost

wages rather

than covering

medical bills

Concept of health

insurance takes

root, supply and

demand increase

Birth of

Blue Cross

and Blue

Shield

1920s 1930s 1940s

1965- Medicare &

Medicaid

Established

1960s

Comprehensive

Major Medical

policies introduced

1970s

Managed

Care

introduced

1980s 1990s

2010- ACA

enacted

2000s

1996- HIPPA

Enacted

Advances in care

improve outcomes

while continuing to

drive costs higher

Page 4: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

Key Areas of Focus for Health Insurers

4

Overarching goal in making coverage decisions is to determine if a

therapy is “reasonable and necessary”

COST VALUE

BENEFICIARY ACCESS

PLAN

DECISIONS

Page 5: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

5

Health Insurance Oversight Influences Coverage

Decisions

While Medicare and Medicaid have somewhat limited flexibility in making coverage

decisions based on the law, private insurers face few coverage requirements

PRIVATE INSURERS MEDICARE & MEDICAID

● Congress establishes what Medicare

covers in law

o Law specifically states that certain

items MUST be covered

o Medicare has flexibility to determine

coverage of other items under

“Benefit Categories” established in

the law

● Medicaid jointly overseen by Congress

and state governments

● Federal and State laws establish broad

requirements

o Historically, many plans offered by

private insurers are often exempt

from mandated coverage of specific

items or services

● ACA added patient protections for

coverage and out-of-pocket costs for

certain items and services

Laws governing private insurance are

typically not prescriptive in terms of

covering specific therapies

By law, Medicare must cover meters, test

strips, insulin, and all items related to

injecting insulin

Page 6: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

Key Private Payer Decision-Makers

6

Coverage decisions are made on the population, not individual patient, level

Role Responsibilities Features / Characteristics

Medical Director

● Provider relations

● Quality management

● Utilization management

● Medical policy

● Board-certified physician

● Spectrum of involvement parallels intensity of payer medical management

o Simple claims review to establishing medical policy

Pharmacy

Director

● Pharmacy benefit management

● Contain pharmaceutical costs without depriving individuals of necessary medicine while improving quality

● PharmD or RPh

● Issues arise when Pharmacy and Medical Director do not coordinate medical and pharmacy benefits to lower resource utilization and medical costs

● Usual manufacturer contact with private plans

Pharmacy and

Therapeutics

(P&T)

Committee

● Formulary development and revision

● Unearthing abnormal prescribing patterns

● Membership:

o Pharmacists

o Medical Director

o Contractor, finance, and legal representation

o Physicians, especially high prescription-use specialties (PCPs, internal medicine, pediatrics)

o Infectious disease representatives (ad hoc)

Page 7: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

Many Factors Influence a Plan’s Coverage Decision

7

CoverageDecision

Efficacy

Plan MemberExpectations/

Feedback

Productivity, Satisfaction,

Quality of Life

PhysicianSupport /

Guidelines

Safety

PremiumImpact

ManufacturerContract

RegulatoryIssues

Cost-Effectiveness

Quality

Disease MgmtPrograms

Effectiveness

AcquisitionCost

Politics andPublic Image

Clinical TrialResearch

Page 8: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

8

What Kind of Evidence Is Most Important to Payers?

Clinical / Patient

Population

InformationEconomic

Studies

Technology

Assessments

Outcomes

Studies

Least Important Most Important

For diabetes treatments, data on HbA1c improvement, helping patients achieve

glycemic control goals, and maintaining glycemic control are of particular interest

Page 9: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

Health Plan Decision Influencers

9

Coverage Decisions

In-Network Providers &

Physician Experts

Direct Customers (e.g., employers)

Government

Beneficiaries

Page 10: "How Insurers Make Diabetes Coverage Decisions" at the 2014 DiabetesMine Innovation Summit

Best Practices for Being Your Own Advocate

10

1. Determine your plan’s coverage policy

o Search website or request it be sent to you

2. Be prepared and persistent

o Be aware of prior authorization and other requirements for coverage

3. Get informed and get help

o Contact your plan (case manager), provider, and manufacturer to solicit help

4. Communicate the medical urgency of your request

o Be prepared to provide letters of medical necessity, journal articles, and treatment guidelines to support your case

5. Formally file for case-by-case coverage if necessary

o Submit all documentation supporting your request to the plan’s medical director

6. Know your plan’s appeals process

o Following the plan’s process avoids denials based on technicalities

7. Be prepared to appeal, appeal, appeal!

In addition to personally contacting your insurer, enlist your employer/benefit

manager and physician(s) to advocate on your behalf