For consumers, the Centers for Medicare & Medicaid Services (CMS) website defines step therapy as follows:
"[Step therapy is] a type of prior authorization. In most cases, you must first try a certain, less expensive drug on the plan’s formulary that’s been proven effective for most people with your condition before you can move up a “step” to a more expensive drug. For instance, some plans may require you first try a generic drug (if available), then a less expensive brand-name drug on their drug list before you can get a similar, more expensive, brand-name drug covered."
Step therapy is not a new concept in healthcare. Many private insurance plans implement step therapy, also referred to as "fail first" therapy, as a cost-containment measure. According to one recent study, health plans' use of step therapy protocols in specialty drug coverage varies widely—from 2 percent to 49 percent across plans.1 And the number of steps patients must climb through to access a specific specialty medication varies as well. The same study reported that of 1,208 coverage decisions involving step therapy, 63 percent required patients to fail one therapy; however, 37 percent mandated failing multiple therapies.1
Until recently, Medicare Advantage plans were prohibited from implementing step therapy protocols for Part B drugs. In August 2018, the Centers for Medicare & Medicaid Services (CMS) issued a memo announcing new guidance that allowed Medicare Advantage plans to implement step therapy for Part B drugs effective January 1, 2019. This regulatory shift reversed a 2012 CMS Health Plan Management System memo stating that "plans were precluded from imposing additional requirements for access to certain Part B drugs or services, such as step therapy requirements."
1.Chambers JD, Panzer AD, Neumann PJ. Variation in the use of step therapy protocols across US health plans. Health Affairs blog. Sept. 14, 2018.
Perspectives on Step Therapy in Oncology explores the implications of potential implementation of step therapy in Medicare Advantage plans.