By SPBA President Fred Hunt - January 2008
Dear SPBA Members, Stop-Loss Partners & friends,
The goal of this memo is to clear up a misunderstanding many of us had. The end-goal is to avoid unpleasant incidents that leave patients & employers feeling cheated. That is bad PR, and bad PR becomes the excuse for "reform" by government.
The issue is "off-label" and "non-approved" (by FDA) uses of drugs and therapies. Should they be paid and reimbursed by plans & Stop-Loss? Let me confess that I was one of the large group of us who assumed that "off-label" and "non-approved" sounded like inappropriate and maybe even criminal malpractice. We were wrong!
It turns out that the Food & Drug Administration (FDA's) role and the terminology about off-label and non-approved is not about how a doctor might decide to use the drug or therapy. (That is a purely medical judgment issue.) No, FDA's focus is what uses the drug company ADVERTISES or even hints as possible other uses. So, it is a MARKETING regulation, not a medical usage regulation. This is the key distinction most of us did not previously know.
SPBA has placed on the this website documentation titled "Drugs Off-Label Legal Explanation". It is six powerpoint slides. Each is a simple straight-forward statement, and then the legal citation or source.
As we adjust to this reality, we need to separate three factors which tend to fuzz the basic issue:
FIRST, SPBA is in no way taking a position to encourage or discourage use of off-label drugs or procedures. That is purely a doctors' medical judgment issue, just like the dozens of other medical judgments made for each patient from diagnosis to final outcome. Besides, frankly, whenever there is a disagreement between TPA/Stop-Loss viewpoint versus doctors' judgment on medical issues, payers usually lose... and do not expect DOL to support a TPA, Stop-Loss or plan versus a doctor's opinion on a medical issue. Most doctors & hospitals are VERY cautious about doing things that would trigger a malpractice claim. So, if a doctor uses a drug off-label or for a non-approved type of treatment, they probably can make a pretty good medical argument that it is a wise action, such as write-ups of the success of the off-label use in medical journals.
SECOND, you must also separate in your mind that the issue at hand is not the cost factor of whether doctors use off-label and non-approved drugs & procedures as an expensive not-most-cost-effective treatment. Sometimes probably yes, sometime we hear that it is cheaper. The relevant point is that, again, this is a MEDICAL decision matter and also applies if an approved on-label treatment is used as a rip-off. I heard that 70% of new recently-approved drugs do not provide significant or more cost-effective results than previously-existing (usually cheaper) drugs or treatments. The point is that the off-label non-approved factor is irrelevant if you're trying to nail down a policy of what will be paid or not reimbursed as cost-efficient. Keep the two factors separate.
THIRD: "Experimental" language is usually where off-label and non-approved uses land. Medical innovation and instant communication is moving so fast that the view in medical practice about what is still "experimental" changes almost day to day. The specific issue of whether off-label and non-approved automatically triggers "experimental" status is not clear-cut. Often, there is extensive medical literature, and FDA is apparently woefully slow in recognizing and processing new "approved" uses.
WHAT NOW? All of this means that common sense rather than one-size-fits-all rules is needed when fulfilling fiduciary duty on these steps. The good news is that common-sense discussion & negotiation has been the method used by TPAs & Stop-Loss on these issues for years. This needs to continue to be the process on these issues.
THE BAD NEWS: What triggered this research by SPBA is that we understand that some Stop-Loss contracts as well as plan documents are being written in an absolute manner that does not recognize that off-label & non-approved is merely a marketing control; it is not automatically evil, illegal or medically disallowed. When push comes to shove, the Stop-Loss or plan is going to come off looking uninformed and needlessly rigid. If Stop-Loss or TPAs decide to be stubborn or apply some arbitrary standard in an arena that changes from patient to patient, we are going to hurt our plan participants, hurt our clients, and alienate our market (and public/political opinion). So, everyone, please use professional cooperation.
THE BIG GOAL: You have heard it over and over, that we need the private employee benefit health system to work smoothly and make common sense to users and public opinion. It is also ERISA fiduciary duty to provide the cures/services that the plan language & SPD lead a plan participant to reasonably expect. So, if a person has an arm problem, the plan participant can reasonably expect it to be covered. If the doctor says that an on-label or traditional treatment is the way to treat that arm, then that is presumably covered. If plans and Stop-Loss start parsing language minutely, they will be seen as making "medical decisions" (which non-doctors are presumed to not be as capable of making as the attending physician), and the patient & employer are going to feel cheated of what their doctor feels is best. That leaves the TPA and the Stop-Loss looking mean or uninformed. This is a simplistic description, but you get the picture. We need public opinion to be happy with the private health benefits system. You saw how the media tore down the HMO industry by taking examples of certain services being denied or not paid. It became front page emotional news and rekindled the political talk about ending the private system. So, the overall goal (for self-preservation) is to be sure our system provides what the customer reasonably expects.
LEGAL NOTE: This issue is now appearing in the courts, so lawyers will have more traction to drag plans & TPAs into litigation. The Medicare Rights center is suing CMS for Part D denial of coverage for enrollees' use of off-label prescriptions. It is currently called Layzer v. Leavitt in the US District Court of the Southern District of NY. This specific case deals mostly with details of Medicare law., but I just mention it because the justifications for the explanations & justifications for off-label use (such as described in this article), will probably become the norm to show that off-label is not unusual or experimental. For example, it says that 20% of prescriptions for the 500 most commonly used drugs are used for off-label purposes. So, be careful and be prepared or you may have patients, doctors, employers and judges second-guessing you in expensive time-consuming litigation.