Working through formulary exclusions

Ethics Forum. Dec. 1, 2003.

What to tell patients about formulary changes

Scenario: What to tell patients about formulary changes

The managed care organization you contract with has changed its formulary, eliminating specific brand drugs in several classes. Some of your patients have been using the discontinued brand drugs with satisfactory results. What do you tell these patients?

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Reply:

This vignette illustrates a problem commonly encountered in clinical practice. According to one study published in the New England Journal of Medicine, prescription drug spending in the United States reached $91 billion in 1998 and increased by 17.3% between 1999 and 2000. Managed care companies developed formularies as a means to curb these runaway costs.

Medications are typically chosen for formularies by review boards that evaluate the literature to determine the efficacy of medications. Those found to be unique in efficacy are chosen; those found to be clearly inferior are not selected.

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When multiple agents of comparable efficacy exist in the same drug class, e.g. statins, the drug(s) with the lowest cost is placed on the formulary.

The formularies are often viewed by physicians as obstacles to optimum patient care -- they engender patient conflict, increase the amount of nonpaid office work, and limit physician autonomy. Increasing effective communication between the physician, patient, and managed care organizations could circumvent or at least ameliorate the sources of frustration that detract from health care delivery.

Patients are oftentimes the first to find out about the formulary change. As they await refills of their prescriptions, the pharmacist informs them the formulary has been changed and tells them to ask their physicians to prescribe a currently accepted medication. It is not surprising that patients in this situation become frustrated and direct that frustration toward their physicians.

An article in the Oct. 20, 1999, issue of the Journal of the American Medical Association discussed communication skills that could minimize patient frustration and conflict. These include understanding patients' worries and concerns, exhibiting empathy, encouraging patients to take an active role in discussing options in care, and negotiating differences of opinion.

So, faced with a patient whose prescription refill has been declined due to a change in formulary, a physician might say some or all of the following: "It must be frustrating for you to have to go through this process. What concerns you the most about having to change medications? There are other medications from the same class of drugs that are equally effective. Let's discuss the potential side effects of these medications and choose the one we think will work best in your situation. I want to reassure you that we will work together until our target is achieved. If we don't achieve our goals with another medicine, I will talk to your managed care plan about resuming your prior medication, or we can discuss changing your managed care plan altogether."

Managed care companies could reduce patient frustration simply by notifying all patients who are taking a soon-to-be-discontinued medication. Patients should be informed about the new medication options and given the criteria that must be met if they wish to continue their current medications. This gives the managed care companies an opportunity to reassure patients that equally effective medicines will be covered and helps patients avoid a gap in medication use.

Insurers should also consider "grandfathering" nonformulary medications. If a patient has been using a medication successfully for longer than one month, for example, the health plan should consider continuing to pay for this medication.

Managed care organizations also should provide open listings of their formularies in materials that are disseminated to potential enrollees. This would allow consumers to consider covered medications when deciding on a plan.

After being told that a medication has been removed from the formulary, the physician must find the listing of medications for that specific managed care plan and determine which agents can be substituted. The new prescription can then be called into a pharmacy.

Usually the physician also has a conversation with the patient about the new prescription. If the physician has a strong preference for the prior medication or the patient does not do well on the new drug, authorization forms must be filled out demonstrating that the criteria for returning to the former drug have been met. All of this requires additional time which is generally not compensated.

Physicians could minimize the extra time required for these activities by having a binder or computer program that lists current formularies from the different participating manage care plans. PDA-based programs that select the appropriate formulary medicine and automatically e-mail a prescription to the pharmacy are becoming increasingly available. Rather than calling the pharmacy and faxing forms throughout the day, physicians can set aside a designated time for all calls to pharmacies and completion of all prior authorization forms. This can minimize stress from interruptions in the daily schedule.

Additional frustration occurs when the appropriate paperwork is completed and the medication is still denied.

A 2003 study published in the American Journal of Managed Care found that 40% of 1,551 faxes for prior authorizations were rejected. The procedure of approval or disapproval of formulary changes should be more open. Currently, the reason for approval of a medication by one health plan and its denial by another is not clear. A standard application form could be used by participating managed care organizations. Updated and uniform formulary changes should be provided. Formularies could be printed on posters and handouts and posted on Web sites so that physicians could access them easily and managed care companies could update them quickly.

Managed care companies could also use the Web site to explain the criteria for approval of a nonformulary medicine for each class of drugs. And if a request for a nonformulary drug is rejected, the health plan's explanation should be clear and suitable alternatives listed. Given the cost savings that formularies generate, physician compensation for completing prior authorization forms should be considered -- especially for medications that are approved.

Physicians are trained throughout medical school and residency to think critically and independently, using available data to synthesize and formulate their decisions. Many physicians perceive the introduction of a third party in the decision-making process as an infringement and an additional source of frustration in the workplace. We need to remind ourselves, however, that we do have choices within formularies and within specific drug classes and always have the option of filling out prior authorization forms when we feel strongly about the effectiveness of the current medication.

Doctors can also be more proactive in the formulary decision process. We can participate in committees organized by managed care companies that decide which medications will be placed on their formularies. Physicians should also encourage insurers to disclose the reasons for their formulary changes. This would dispel preconceived notions physicians have about medication selection and would arm them with reasons for the change when they talk with their patients.

Finally, plans should be urged to evaluate the impact of their formulary decisions on clinical outcomes.

If, for example, an insurer removes Lipitor from its formulary, the health plan should follow up to determine whether patients who had been taking Lipitor continue to have adequately controlled lipid levels after the formulary change and whether they experience more adverse cardiac events than they would be expected to have had on Lipitor.

Patient and physician satisfaction should also be assessed.

These assessments would allay some of the concerns patients and physicians have about formularies. And where changes were related to significant increases in patient problems, it would be in the health plan's financial interest to restore the original drug to its formulary and reduce the number of patient office visits or hospitalizations.

The question posed in the above vignette would not have been an issue 10 years ago and is a byproduct of today's environment of controlling health care costs.

The successful resolution of this problem depends on continued communication between physicians and their patients and between physicians and managed care organizations.

--Edgar Y. Chou, MD, Clinical instructor, Dept. of Medicine, Drexel University School of Medicine, Philadelphia

--David S. Brody, MD, Professor of medicine, Dept. of Medicine, Drexel University School of Medicine, Philadelphia

Ethics Forum discusses questions on ethics and professionalism in medical practice. Readers are encouraged to submit questions and comments to philip.perry@ama-assn.org or to Ethics Group, AMA, 515 N. State St., Chicago, IL 60654; fax 312-464-4613. Opinions in Ethics Forum reflect the view of the author and do not constitute official policy of the AMA.