Analyzing the Affordable Care Act: Essential Health Benefits and Implications for Oncology

Oncologists, practice managers, manufacturers, and patient advocates must stay involved at the federal and state levels to ensure appropriate access to necessary services and quality treatment are maintained for patients with cancer.

Abstract

The Patient Protection and Affordable Care Act (ACA) will have lasting effects on oncology coverage and, perhaps, on oncology practice as well. The ACA ushers in a new class of insured individuals; approximately 25 million will purchase insurance through the exchanges, and Medicaid will expand by 12 million beneficiaries over the next 10 years. Essential health benefits (EHBs), which are required in all qualified health plans (QHPs) sold in the exchanges, will define the coverage available to the newly insured population and could lead to the development of new definitions and standards for medical necessity. This article will discuss effects of the ACA EHB requirements on oncology coverage, as well as the state and federal options and responsibilities as they relate to coverage of and access to oncology services within the QHPs in the exchanges.

Introduction

The Patient Protection and Affordable Care Act (ACA) requires each state to have a health insurance exchange where individuals and small businesses can purchase qualified health plans (QHPs). QHPs must provide, at minimum, the essential health benefit (EHB) package,¹ which the Department of Health and Human Services (HHS) needed to define.¹ HHS initially looked to guidance from the ACA-mandated Bureau of Labor Statistics report² on employer-sponsored health insurance coverage and the Institute of Medicine report,³ which focused in part on affordability over comprehensiveness. In the end, HHS Secretary Kathleen Sebelius passed the EHB benchmark selection to the states through the use of state benchmark plans.⁴ The EHB categories include:

• Ambulatory patient services

• Emergency services

• Hospitalization

• Laboratory services

• Maternity and newborn care

• Mental health and substance use disorder services, including behavioral health treatment

• Pediatric services, including oral and vision care

• Preventative and wellness services and chronic disease management

• Prescription drugs

• Rehabilitative and habilitative services and devices

On the basis of the statute, the EHB package is intended to mirror an employer plan, but it must also meet requirements intended to protect consumers, such as cost-sharing limitations, mental health parity, and clear descriptions of actuarial value through metal level descriptions.

EHBs and Patient Protections

Overall, the EHB proposed rule,⁵ made public on November 20, 2012, would codify the statute using much of the information previously released in the HHS guidance documents in 2011 and 2012. Most of the clarifications provided in the rule expand coverage or shape the exchange plans to mirror existing employer-sponsored coverage.

Drug Coverage

The prescription drug benefit technically keeps the one-drug-per-class rule originally proposed in the 2011 guidance document but expands it to cover at least the greater of:

• One drug in every US Pharmacopeia (USP) category and class, or

• The same number of prescription drugs in each category and class as the EHB benchmark plan

This expansion does not use the Medicare Part D protected class concepts, for which many stakeholders advocated. Instead, HHS proposes to rely on states to follow the nondiscrimination principles included in the regulation. HHS would require each plan to have a process by which enrollees can request clinically appropriate drugs not covered and to submit its drug list in USP format for review. HHS states that it will use information on complaints and appeals and data on drug lists to refine the prescription drug benefit review policy for future years.

Most plans include more than one drug per class. Table 1 reviews the oncology drug classes with respect to the range, average, and most common number of drugs covered in 50 states and the District of Columbia. Information specifically identifying the drugs covered is not publicly available.

Table 1.

Benchmark Coverage of Antineoplastics

Class	Example Drugs	Range	Average	Most Common
Alkylating agents	Altremine, chlorambucil, melphalan, lomustine, cyclophosphamide	0-8	6.2	8
Antiangiogenic agents	Lenalidomide, thalidomide	0-2	1.8	2
Antiestrogens/modifiers	Estramistine, tamoxifen	0-3	2.6	3
Antimetabolites	Mercaptopurine	0-2	1.8	2
Antineoplastics	Not listed	0-52	29.5	52
Antineoplastics, other	Fludarabine, leucovorin, mitroxantrone	0-6	4.0	6
Aromatase inhibitors, third generation	Anastrozole, letrozole	0-3	2.9	3
Enzyme inhibitors	Etoposide, topetecan	0-3	2.0	3
Molecular target inhibitors	Erlotinib, gefitinib, everolimus, dastainib, imatinib, nilotinib, lapatinib, pazopanib, sorafenib, sunitinib	0-11	9.5	11
Monoclonal antibodies	Rituximab	0-3	1.5	3
Retinoids	Alitretinoin	0-3	2.5	3

NOTE. Aggregated from supplemental information regarding state EHB benchmark selection, provided from CCIIO regarding the EHB proposed rule.⁶

Abbreviations: CCIIO, Center for Consumer Information and Insurance Oversight; EHB, essential health benefit.

The depth of oncology drug coverage has little correlation with type of exchange (eg, state-run exchange v federally facilitated or partnership exchange) or type of benchmark plan selected (eg, largest small-group plan v largest health maintenance organization plan). As a result, both the American Society of Oncology (ASCO) and state affiliates must remain involved in advocacy at all levels of government to ensure patient access to medically necessary physician-administered and oral oncolytics and ancillary oncology products and services.

Overall, the expansion of drug coverage through the proposed rule should create better coverage and access to prescribed anticancer medications than what is required under the statute. However, there continues to be some concern.

First, oncology products have fewer protections under the EHB concept compared with the Medicare Part D–protected classes (classes of clinical significance) concept. The Medicare Part D provisions require that all products in the protected classes are included on formularies. Furthermore, new products in these classes have more-timely review requirements, and the Centers for Medicare and Medicaid Services (CMS) has ensured that prior authorization requirements are not unduly burdensome.

Second, many anticancer drugs are physician administered and therefore provided under a medical benefit instead of a pharmacy benefit. Using the USP drug classifications does not necessarily protect access to these products, because the benchmark coverage is based on pharmacy coverage.

Third, under the benchmark approach, coverage may be compromised for new products in existing classes/categories. Additionally, the USP formulary guidelines are not frequently updated, potentially delaying access to new products in new classes.

Fourth, the EHB benchmark dictates coverage, but it does not indicate how drugs will be managed or what incentives (eg, formulary tiering) may be used to influence enrollee access.

Although there is uncertainty, health plan enrollees are protected by cost-sharing limitations, discussed in more detail later in this article.

Nondrug Coverage

There is little information regarding EHB coverage of nondrug oncology services. Similar to the benchmark plans that drive EHB coverage, we believe QHPs will cover nondrug oncology services through other categories of the EHB program, mainly ambulatory patient services, hospitalization, and laboratory services.

Medical Necessity

Insurers will only cover services when they are deemed medically necessary. In the event of a denial, the ACA requires the health plan to provide an initial internal review as well as a subsequent external review, if requested by the enrollee. The additional level of (external) review allows for additional oversight and beneficiary access to medically necessary services; however, it is unclear exactly what standards will be used to determine medical necessity. Regulations from the HHS, Department of Labor, and Treasury will standardize both the internal and external review processes available to enrollees starting in 2014.⁷ The interim final rule, released on July 23, 2010, states that the external review process of a state must provide for the external review of adverse benefit determinations (and final internal adverse benefit determinations) that are based on medical necessity, appropriateness, health care setting, level of care, or effectiveness of a covered benefit.

For medically necessary services, a health plan will subject the enrollee to cost sharing (with the exception of specific preventative services), which is dependent on the actuarial value of the plan and management techniques employed. The original Institute of Medicine report encourages the use of comparative effectiveness and other effectiveness standards not seen, to a significant degree, in the Medicare and Medicaid programs. QHP issuers will likely have more flexibility than Medicare or Medicaid in restricting access to costly technologies.

State-Required Benefits

Under the proposed rule, the EHB benchmark of each state would include any state-required benefits enacted by December 31, 2011. HHS guidance had previously stated that any state-mandated benefits enacted by December 31, 2011, would be part of the EHB if, and only if, the mandates were included in the state-selected EHB benchmark plan.⁴ However, HHS clarified this position in the proposed rule and includes state-mandated coverage in the EHB benchmark regardless of benchmark selection.⁵

The proposed rule further specifies that state rules related to provider types, cost sharing, or reimbursement methods would not fall under the HHS interpretation of state-required benefits. On the basis of the language in the proposed rule and stakeholder interactions with CMS, it is assumed that state rules related to oral anticancer coinsurance will be imposed on plans but will not affect the state-required contributions.

The distinction between a state-required benefit and a state rule should only apply after 2015, when a state may be required to defray the additional costs incurred by the plan in covering a state-required benefit if it falls outside of the benchmark. Furthermore, states will likely have to defray costs of any state-required benefit mandate enacted after December 31, 2011.

The Center for Consumer Information and Insurance Oversight lists the state-required benefits of each state, including off-label drug coverage and oral/intravenous anticancer medication parity laws, where applicable (Appendix Table A1, online only).

Patient Protections

Prohibitions against discrimination.

Consistent with the ACA, the Health Insurance Market Rules Rate Review proposed rule,⁸ released November 20, 2012, prohibits health plans from denying coverage because of pre-existing coverage. Furthermore, the statute and rule prohibit insurers from denying coverage based on pre-existing conditions and restrict premium variation to the following four factors:

• Whether the plan or coverage applies to an individual or family

• Rating area

• Age, limited to a variation of three to one for adults

• Tobacco use, limited to a variation of 1.5 to one

Cost-sharing limitations.

The ACA identifies the limit on total enrollee cost sharing that can be incurred.¹ The annual limitation on cost sharing ensures that health plans pay for significant health expenses associated with the EHB program (medical and pharmacy benefits), and the risk of medical debt or bankruptcy for individuals insured by such plans is limited. Once an enrollee reaches the limitation on cost sharing for the year, the enrollee is not responsible for additional cost sharing for EHBs for the remainder of the plan year.

The proposed rule ties the annual limitation on cost sharing for plan years beginning on or after January 1, 2014, to the enrollee out-of-pocket limit for high-deductible health plans. For the year 2013, these amounts would have been $6,250 for self-only and $12,500 for non–self-only coverages.⁵

Medicaid Benchmark Plans, or Alternative Benefit Plans

New Medicaid enrollees will be offered benchmark coverage instead of traditional Medicaid coverage. The state selection of a Medicaid alternative benefit plan (ABP) benchmark can be the same or different from the exchange benchmark, but it must meet the same requirements of EHB. When HHS released the EHB proposed rule, CMS released a letter to Medicaid directors informing them of the intention of CMS to propose that the definition and coverage provisions in the EHB proposed rule would generally apply to the newly expanded Medicaid population.⁹

CMS has since released a proposed rule clarifying the differences between the exchange and Medicaid benefit benchmarks.¹⁰ In addition to specifying how EHB requirements would be implemented in an ABP, the rule highlights the ability of a state to adopt prior authorization and other utilization control measures as well as policies that promote the use of generic drugs. Specifically, the rule allows states to implement differential cost sharing between preferred and nonpreferred drugs and allows nominal cost sharing up to $4 for preferred drugs and up to $8 for nonpreferred drugs. This applies to all Medicaid beneficiaries and is not specific to the newly eligible population. Because of tight budgets, states may take advantage of the cost-sharing allowances and differential payment in an effort to increase prescription drug management. In addition, consistent with current trends, states will likely use Medicaid-managed care to administer benefits for the expanded Medicaid patient population.

State Activity to Date

States have and will continue to make important decisions regarding the exchanges (Fig 1). HHS has approved the blueprints of 17 states and the District of Columbia to operate state-run exhanges. For the remaining 33 states, HHS will establish distinct federally facilitated or partnership exchanges in each state. All exchanges will provide a marketplace for consumers to purchase quality, affordable health insurance.

Fig 1.

Exchange timeline. EHB, essential health benefit; HHS, Department of Health and Human Services; QHP, qualified health plan.

However, state-run exchanges may institute requirements beyond EHB requirements for QHPs and take a more active role in deciding which plans are selected. Specifically, states could set higher certification standards, selectively choose specific health plans with (what they determine to be) high-value offerings, or use competitive bidding for access to the exchange marketplace. Overall, these techniques could improve the quality and value of the plans offered, but states will need to be mindful to create a competitive marketplace.

It will be important for readers—practicing oncologists or cancer advocates—to ensure that their state leadership and legislative representatives understand the complexity of cancer prevention, diagnosis, and care when evaluating plans.

Federal Involvement

As noted, HHS will establish distinct federally facilitated or partnership exchanges in all states not developing state-run exchanges. However, HHS has not released rules identifying its plans for implementing the federal exchanges. Many state and federal lawmakers are calling on HHS to provide the information as soon as possible. To date, HHS has provided little information regarding the design, management, and implementation of the federally facilitated and partnership exchanges, despite tight time lines. The exchanges must be up and running by October 2013 and must be equipped to communicate complicated information in a user-friendly way.

The EHB benchmarks, the statutorily defined cost-sharing limitations, the preexisting condition provisions, and the definition of medical necessity will have the most significant impact on oncology. Regardless of the type of exchange a state pursues, the EHB benchmarks have been determined. Therefore, we suspect the additional regulations will have a limited effect on oncology coverage for calendar years 2014 and 2015. However, HHS may change the method of EHB benchmark selection for calendar year 2016. If HHS allows states to update their benchmarks or establishes a national benchmark, coverage for oncology services will need to be revisited.

Implications for Oncology Coverage and Access

Over the next 10 years, the ACA will usher in approximately 37 million new insured individuals¹¹ who could have previously had limited access to insurance, cancer diagnosis, and treatment options and could perhaps present with more-advanced cancer. Medicaid expansion will increase demand above the levels seen by oncology practices today and will require practices to reexamine their payer mixes. Most importantly, the ACA provides significant consumer protections important to oncology patients, such as coverage of pre-existing conditions and mandated coinsurance limitations that apply to all EHBs (medical and pharmacy benefits).

A few areas of risk remain unresolved with the ACA. First, the reliance on 50 state benchmark plan formularies rather than the Medicare Part D–protected class concepts could threaten access to oncology drugs, particularly newly approved oncolytics. Second, there are no current rules or policies related to the coverage of new drugs or biologics, particularly oncolytics. Third, should new oncolytics be approved in classes that previously had one product in them, it is unclear if the QHPs would be required to afford coverage, because the benchmark would only have one drug in the class. Furthermore, there are no specified protections for physician-administered products, so the definition of medical necessity and the application of compendia coverage will be of the utmost importance with regard to physician-administered products. Oncologists and drug manufacturers must be vigilant in ensuring that new oncolytics are reviewed in a timely fashion by a new list of payers. Potentially, the lack of consistent oncology protections could lead to variable coverage and an ever-widening list of prior authorization requirements and appeals that oncology practices must manage to ensure appropriate access to care for their patients. Fourth, there is no clear pathway for universal coverage of compendia-listed anticancer indications; coverage relies on state-required benefits. In a state without a law requiring off-label drug coverage, a patient may not have access to a life-saving medication. Furthermore, there is no clear answer to oral parity rules; the Center for Consumer Information and Insurance Oversight lists oral/intravenous parity as a state-required benefit, but discussions with CMS have indicated that it should be treated as a coverage rule. Additionally, the difference between state-required mandates and coverage rules is ambiguous. And finally, it continues to be unclear how affordability and overall cost could affect the standards used to determine medical necessity; these standards could be less comprehensive than what we have become accustomed to under the Medicare and Medicaid programs.

Stakeholders must stay involved and advocate as appropriate at the federal and state levels to ensure appropriate access to necessary services and quality treatment are maintained for patients with cancer. At the federal level, ASCO and the Community Oncology Alliance are essential in directing such efforts. At the state level, ASCO, the Association of Community Cancer Centers, and independent state affiliates are essential in ensuring access remains intact. Although we do not see any significant danger in the ACA, as we may in the Congressional fights over the budget deficit or payment reforms, much of the actual coverage and access aspects will only be uncovered with full implementation and evaluation of the plans and packages offered in the exchanges. All stakeholders—oncologists, practice managers, manufacturers, and patient advocates—will need to ensure that beneficiary access is maintained as HHS seeks to implement and encourage affordable access to insurance.

Appendix

Table A1.

Oncology-Related State-Specific Benefits: Off-Label Drug Coverage

State	Off-Label Use		Oral Anticancer Medication (Oral/IV parity)
	State-Required Benefit	Applicable Markets	State-Required Benefit	Applicable Markets
Alabama	Insurance coverage for drugs to treat life-threatening illnesses	Individual, small group, large group	N/A	N/A
Arizona	Off-label prescription drugs for cancer	Individual and group disability, HCSO/HMO, HMDO	N/A	N/A
Arkansas	Off-label drug use	Individual, small group, large group (including HMOs)	N/A	N/A
Colorado	Off-label use of cancer drugs	Individual, group	Oral anticancer medication	Individual, group
Connecticut	Off-label use of cancer drugs	Individual, group	N/A	N/A
District of Columbia	N/A	N/A	Chemotherapy pill coverage	Individual, small group, large group, HMO
Florida	Coverage for use of drugs in treatment of cancer	Individual, small group, large group	N/A	N/A
Georgia	Off-label drug use	Individual, small group, large group	N/A	N/A
Illinois	N/A	N/A	Cancer drug parity	Individual and group
Indiana	Prescription drugs: off-label use of certain drugs if prescription coverage provided	Individual, small group, and employer assoc, large group and employer assoc, HMOs	N/A	N/A
Iowa	N/A	N/A	Oral cancer medication	Individual, small group, large group
Kansas	Off-label prescription drugs	Individual, small group, large group	Off-label prescription drugs	Individual, small group, large group
Maine	Off-label use of prescription drugs for cancer, HIV, or AIDS	All contracts; the mandate applies to certificates issued in Maine through group policies that are issued outside of Maine	N/A	N/A
Massachusetts	Off-label uses of prescription drugs to treat cancer; off-label uses of prescription drugs to treat HIV/AIDS	Individual, small group, large group	N/A	N/A
Minnesota	Coverage for off-label drugs to treat cancer in certain circumstances	Individual, group, HMO	N/A	N/A
Mississippi	Coverage of drugs not approved by FDA, drugs used in treatment of cancer	Individual, group, or blanket policy	N/A	N/A
Nebraska	Off-label drugs for cancer and HIV/AIDS	Individual, small group, large group	N/A	N/A
Nevada	Off-label drugs for cancer and HIV/AIDS	Individual, small group, large group	N/A	N/A
New Hampshire	Off-label prescription drugs	All fully insured insurance policies and certificates that include coverage for prescription drugs	N/A	N/A
New Jersey	Off-label drugs	Individual, small group, large group	Oral anticancer medications	Individual, small group, large group
New Mexico	N/A	N/A	Coverage for orally administered anticancer medications; limits on patient costs	All
North Carolina	Coverage for certain off-label drug use for the treatment of cancer	Individual, small group, large group	N/A	N/A
North Dakota	Coverage for off-label uses of drugs	Individual, group plans (including HMOs)	N/A	N/A
Ohio	Off-label prescription drugs	Individual, group	N/A	N/A
Oregon	Prescription drugs; prohibits excluding a particular drug coverage solely because it is not FDA approved for a medical condition	Individual, group	Oral anticancer medications	Individual and group plans, including HMOs
Rhode Island	Off label prescription cancer drugs	Individual or group health insurance contracts; this section shall not apply to insurance coverage providing benefits for: (1) hospital confinement indemnity; (2) disability income; (3) accident only; (4) long-term care; (5) Medicare supplement; (6) limited benefit health; (7) specified disease indemnity; (8) sickness or bodily injury or death by accident or both; and (9) other limited benefit policies	N/A	N/A
South Carolina	Off-label drug use	All policies that provide coverage for prescription drugs	N/A	N/A
South Dakota	Off-label drug use	Individual, small group, large group	N/A	N/A
Tennessee	Coverage for off-label use of approved drugs	All insurers	N/A	N/A
Texas	Off-label drugs	Individual, large group plans (including HMOs)	Oral anticancer medications	Individual, small group, large group (including HMOs for all three)
Vermont	Coverage for off-label use	A health benefit plan offered, administered, or issued by a health insurer doing business in Vermont	Orally administered anticancer medication	All health insurance plans, nonprofit hospital and medical services corporations, and HMOs; the term does not apply to coverage for specified disease or other limited benefit coverage

NOTE. Aggregated from supplemental information regarding state state-required mandates, provided from CCIIO regarding the EHB proposed rule (Center for Consumer Information and Insurance Oversight: Additional information on proposed state essential health benefits benchmark plans: State required benefits. http://cciio.cms.gov/resources/data/ehb.html)

Abbreviations: CCIIO, Center for Consumer Information and Insurance Oversight; EHB, essential health benefit; FDA, US Food and Drug Administration; HCSO, health care services organization; HMDO, hospital, medical, dental, and optometric service coporation; HMO, health maintenance organization; IV, intravenous; N/A, not applicable.

Authors' Disclosures of Potential Conflicts of Interest

Although all authors completed the disclosure declaration, the following author(s) and/or an author's immediate family member(s) indicated a financial or other interest that is relevant to the subject matter under consideration in this article. Certain relationships marked with a “U” are those for which no compensation was received; those relationships marked with a “C” were compensated. For a detailed description of the disclosure categories, or for more information about ASCO's conflict of interest policy, please refer to the Author Disclosure Declaration and the Disclosures of Potential Conflicts of Interest section in Information for Contributors.

Employment or Leadership Position: Valerie A. Hutchins, HillCo Health (C); Angela M. Lively, HillCo Health (C) Consultant or Advisory Role: Valerie A. Hutchins, HillCo Health (C); Marc B. Samuels, HillCo Health (C); Angela M. Lively, HillCo Health (C) Stock Ownership: None Honoraria: None Research Funding: None Expert Testimony: None Other Remuneration: None

Author Contributions

Conception and design: Valerie Hutchins, Marc B. Samuels

Financial support: Marc B. Samuels

Collection and assembly of data: Valerie Hutchins, Marc B. Samuels

Data analysis and interpretation: Marc B. Samuels, Angela M. Lively

Manuscript writing: All authors

Final approval of manuscript: All authors