Step Therapy

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."


Sources:
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.

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