Insurers steer patients towards companies’ preferred pharmacies with grave consequences for some

Nebraska State Capitol Building

The Sower atop the Nebraska State Capitol (Rebecca S. Gratz for Nebraska Examiner)

As practicing rheumatologists in Lincoln, we treat patients with auto-immune and inflammatory conditions that affect their joints, organs and tissues. These include diseases such as rheumatoid arthritis, lupus, psoriasis, gout — and many others. Many of our patients require treatment with specialty medications that often must be infused by a physician or other qualified health professional in the clinic.

Normally, the infusion process is straightforward; patients arrive at their appointment and a qualified member of my staff administers the treatment right there. If the patient’s dose needs to be adjusted, or if we need to try a different medication, all of that can be arranged during the same appointment. Our practice keeps the medications we need in stock, and our staff has specific expertise in the preparation and handling of these specialized therapies.

But in recent years, a troubling insurer-mandated practice is making the routine infusion of specialty medications increasingly difficult for patients and providers alike. Through a policy known as “white bagging,” many health insurance companies are now refusing to cover patients’ medications unless the administering physician orders them from an off-site specialty pharmacy specifically for that individual patient. The treatment then must be shipped to the clinic to be infused, meaning patients may have to wait longer for care.

White bagging has a clear profit incentive for insurers: The pharmacies they steer patients to are often owned and operated by the insurers’ pharmacy benefit managers (PBM). Pharmacy benefit managers are insurance middlemen who manage the prescription drug coverage component of an insurance plan.

Under white bagging, clinics are not able to purchase medications in bulk and keep them in storage.  Because providers need to obtain their patients’ medications from an off-site pharmacy first, ­extra scheduling, storage and administration is needed to ensure the medication arrives ahead of a patient’s appointment.

In rheumatology, every week that goes by without proper treatment heightens the risk of a manageable condition turning into increased disease activity and disability. Research shows that for someone diagnosed with rheumatoid arthritis, the optimal “window of opportunity” for early and aggressive treatment is within the first few months of disease onset. Treatment delays caused by white bagging means that a patient with rheumatoid arthritis could develop irreversible damage or develop additional features or complications of the disease.

And obtaining medications from a mail-order pharmacy means that physicians are no longer able to maintain chain-of-custody quality control to ensure these drugs are properly and safely prepared and handled. Without that assurance, the risk of medications expiring, being improperly mixed or becoming subject to other safety and quality hazards are unknown to the physician.  The physician remains ultimately responsible for these risks, not the pharmacy benefit manager.

Lastly, despite insurers’ insistence that the practice is a cost-saver, white bagging policies are usually accompanied by increased patient cost-sharing for physician-administered drugs. As another way to steer them to pharmacy benefit manager-owned pharmacies, plans penalize patients with higher out-of-pocket costs if they opt to continue to receive specialty medications from their physician.

There are also costs for providers. One study found that the administrative costs of complying with white bagging requirements totaled $310 million in a single year, putting an increasing financial burden on physician practices already stretched thin by the economic pressures of the pandemic.

So, who’s really saving money here? Only the insurers and their pharmacy benefit managers. These managers have a duty to negotiate with pharmaceutical companies to lower prices. However, a significant lack of transparency enables them to pocket most of the rebates and discounts they receive instead of passing them on to patients. Steering patients to their own pharmacies via white bagging allows the pharmacy benefit managers to pocket even more of these savings while restricting how and where patients receive their medications.

Fortunately, there’s a bill before the Nebraska Legislature that would prohibit state-regulated insurance plans from using white bagging to steer patients towards pharmacies that they or their pharmacy benefit managers control. Legislative Bill 943 would ensure that health plans cannot refuse to cover clinician-administered medications nor use other tactics to incentivize patients to receive their prescriptions from off-site specialty pharmacies. It’s time to give control back to physicians and patients. We urge our state lawmakers to support this bill and ensure that Nebraskans living with rheumatic diseases can continue to receive timely, safe and affordable treatment. They deserve nothing less.

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Melvin Churchill

Melvin Churchill, M.D., is a Mayo Clinic-trained and practicing rheumatologist at the Arthritis Center of Nebraska and a clinical research investigator associated with the Physician Research Collaboration.

Rick Chatwell

Rick Chatwell, M.D., is a Mayo Clinic-trained and practicing rheumatologist at the Arthritis Center of Nebraska and a clinical research investigator associated with the Physician Research Collaboration.