ERISA Health Plan Lawsuits: Why Should We Care?

CSRO Payer Issue Response Team

I have written about the Coalition of State Rheumatology Organizations (CSRO)’s Payer Issue Response Team (PIRT) in the past. Rheumatologists around the country can send to PIRT any problems that they are having with payers. A recent PIRT submission involved a white-bagging mandate for an employee of a very large international Fortune 500 company. This particular example is important because of the response by the VP of Global Benefits for this company. Express Scripts is the administrator of pharmacy benefits for this company. The rheumatologist was told that he could not buy and bill for an infusible medicine but would have to obtain the drug through Express Scripts’ SP. He then asked Express Scripts for the SP medication’s cost to the health plan in order to compare the SP price versus what the buy-and-bill model would cost this company. Express Scripts would not respond to this simple transparency question; often, PBMs claim that this is proprietary information.

I was able to speak with the company’s VP of Global Benefits regarding this issue. First of all, he stated that his company was not mandating white bagging. I explained to him that the plan documents had white bagging as the only option for acquisition of provider-administered drugs. A rheumatologist would have to apply for an exemption to buy and bill, and in this case, it was denied. This is essentially a mandate.

I gave the VP of Global Benefits an example of another large Fortune 500 company (UPS) that spent over $30,000 per year more on an infusible medication when obtained through SP than what it cost them under a buy-and-bill model. I had hoped that this example would impress upon the VP the importance of transparency in pricing and claims to prevent his company from unknowingly costing the health plan more and its being construed as a breach of fiduciary duty. It was explained to me by the VP of Global Benefits that his company is part of the National Drug Purchasers Coalition and they trust Express Scripts to do the right thing for them. As they say, “You can lead a horse to water, but can’t make it drink.”
 

Liability of a Plan That Physically Harms an Employee?

A slightly different example of a self-insured employer, presumably unknowingly, allowing its third-party administrator to mishandle the care of an employee was recently brought to me by a rheumatologist in North Carolina. She takes care of an employee who has rheumatoid arthritis with severe interstitial lung disease (ILD). The employee’s pulmonary status was stabilized on several courses of Rituxan (reference product of rituximab). Recently, BlueCross BlueShield of North Carolina, the third-party administrator of this employer’s plan, mandated a switch to a biosimilar of rituximab for the treatment of the ILD. The rheumatologist appealed the nonmedical switch but gave the patient the biosimilar so as not to delay care. Her patient’s condition is now deteriorating with progression of the ILD, and she once again has asked for an exemption to use Rituxan, which had initially stabilized the patient. Her staff told her that the BCBSNC rep said that the patient would have to have a life-threatening infusion reaction (and present the bill for the ambulance) before they would approve a return to the reference product. An employer that knowingly or unknowingly allows a third-party administrator to act in such a way as to endanger the life of an employee could be considered to be breaching its fiduciary duty. (Disclaimer: I am not an attorney — merely a rheumatologist with common sense. Nor am I making any qualitative statement about biosimilars.)