Abstract

The very high and ever-increasing costs of medical care in the United States are well-recognized and much discussed. Health insurers have employed a variety of strategies in an effort to control their expenditures, including one that is common but has received relatively little attention: step therapy. Step therapy programs require patients to try less expensive treatments and find them to be ineffective or otherwise problematic before the insurer will approve a more high-priced option. This Article is the first law journal piece dedicated to analyzing this important cost control measure.

The Article explores the strengths and weaknesses of step therapy and its legal and ethical implications. It argues that in some cases, step therapy reduces insurers’ drug costs in the short term but causes significant harm to patients that ultimately results in both human suffering and increased long-term health care costs. Some insurers are also less than transparent with patients about their programs, adhere to one-size-fits all approaches that ignore nuanced clinical and economic evidence, and implement their policies in a discriminatory way. The Article examines how several states have responded to step therapy through legislation and discusses review mechanisms that federal law provides for adverse insurance decisions. The Article concludes with a detailed set of recommendations. These include legislative interventions to ensure that step therapy programs are sufficiently flexible and responsive to patients’ individual needs and measures to enhance transparency and expeditiously address emerging scientific and economic evidence.

Keywords

step therapy, health insurance, medical costs, appeals, the Affordable Care Act, ERISA, Medicare, disability discrimination, transparency, precision medicine.

Publication Date

2018

Document Type

Article

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