VOLUME 2, ISSUE 1: Optimizing Your Online Reputation


Step Therapy in 2019 and Beyond

A look at the effects of this policy on retina.


At A Glance:
  • CMS will allow Medicare Advantage organizations to institute step therapy for enrolled Medicare beneficiaries beginning in January 2019 with the express purpose of lowering drug costs for patients and payers.
  • Step therapy for retina specialists is primarily focused on the use of off-label, compounded bevacizumab.
  • A recent report by the Office of the Inspector General on Medicare Advantage appeals raises serious questions about the performance and motivation of many Medicare Advantage organizations.

The cost of drugs has skyrocketed over the past decade and is projected to grow faster than any other health care service over the next decade. President Trump has promised to cut drug costs, and there is bipartisan support to do something to lower expenditures.

In 2017, according to a CMS analysis, US prescription drug costs were $333.4 billion, accounting for nearly 10% of the country’s total health care expenditures.1 Under Medicare, from 2012 to 2016, Part B drug costs increased 42% and Part D costs increased 71%. Total Medicare expenditures increased only 18% during the same period, highlighting the disproportionate effect of drugs on overall spending.

In Part B, seven drugs accounted for 38% of the expenditures, and ophthalmology drugs were at the top of list. From 2013 to 2016, Medicare spent $98 billion on Part B drugs. Aflibercept (Eylea, Regeneron), at $6.4 billion, and ranibizumab (Lucentis, Genentech), at $4.9 billion, were Nos. 1 and 4, respectively, accounting for 12.2% of total expenditures.2

Recently, CMS announced a policy to allow Medicare Advantage (MA) organizations to institute step therapy for enrolled Medicare beneficiaries beginning in January 2019 with the express purpose of lowering drug costs for patients and payers.3

Whether or not CMS has the authority to institute such a policy is controversial, and this decision may yet be challenged. Regardless, step therapy is already the most common type of coverage restriction used by commercial payers for specialty drugs. An analysis of a specialty drug evidence and coverage database at Tufts Medical Center demonstrated that, as of August 2017, nearly one in four coverage decisions involved a step therapy protocol, with wide and seemingly random variations in how and when protocols are applied.4 For example, only 16% of drug indication pairs were covered by all plans, and fewer than half were covered the same by at least 75% of plans. When step therapy coverage was analyzed by FDA-approved indications, the protocols were consistent with FDA labeling 52% of the time, more restrictive 33% of the time, and not covered at all 4.5% of the time. This wide variation suggests a lack of evidence-based medicine underlying these protocols.


Step therapy for retina specialists is primarily focused on the use of off-label, compounded bevacizumab (Avastin, Genentech). We are all familiar with the many studies that have demonstrated bevacizumab to be a safe and effective treatment for a variety of retinal pathologies. Indeed, ophthalmologists have embraced bevacizumab. Across more than 6.2 million intravitreal injections in the AAO’s Intelligent Research in Sight (IRIS) Registry from 2013 through 2016, 46% of patients received bevacizumab.

The simple truth is that, without the many dedicated ophthalmologists who fought for access to and payment for bevacizumab and participated in clinical trials, there would be no alternative to aflibercept and ranibizumab. The use of bevacizumab by ophthalmologists has saved Medicare tens of billions of dollars to date and will continue to do so as long as it remains available.5,6


What are the potential issues likely to be associated with the advent of step therapy by MA organizations? If past performance is any indication, there is likely to be a host of problems affecting both beneficiaries and providers. A recent report by the Department of Health and Human Services Office of the Inspector General (OIG) on MA appeals raises serious questions about the performance and motivation of many MA organizations.7The title of the report is an accurate summary: “Medicare Advantage appeal outcomes and audit findings raise concerns about service and payment denials.”

This report examined denial of service or payment data from 422 MA contracts covering over 15 million beneficiaries. From 2014 to 2016, when beneficiaries and providers appealed preauthorization and payment denials, MA organizations overturned 75% of their own denials. During the same period, independent reviewers at higher levels of the appeals process overturned additional denials in favor of beneficiaries and providers.

The OIG concluded that the high number of overturned denials raises concerns that some MA beneficiaries and providers were initially denied services and payments that should have been provided. Furthermore, the report noted that beneficiaries and providers rarely used the appeals process designed to ensure access to care and payment. From 2014 to 2016, beneficiaries and providers appealed only 1% of denials.

The implementation of step therapy requiring initial treatment with bevacizumab raises many questions, including these:
  • What are the criteria for determining treatment failure with bevacizumab? Will it be a loss of vision? If so, how much? Does lack of visual improvement constitute failure? Are imaging changes such as OCT or angiography appropriate criteria?
  • How many injections are necessary to establish failure?
  • What about patients who, after appropriate informed consent regarding off-label and compounded drugs, are unwilling to receive bevacizumab?
  • Will step therapy be required even when there are compelling data that bevacizumab is not the treatment of choice, such as in patients with diabetic macular edema and poor vision?
  • Will a repeat trial of step therapy be required for the second eye?
  • Will there be standardization of step therapy protocols? There are more than 500 Medicare Advantage (MA) contracts or plans. The same MA organization may have multiple different plans. How can providers be expected to know the requirements and nuances of many disparate plans?
  • What is the appeals process when the ophthalmologist and the plan disagree on treatment failure? In the preauthorization denials reviewed the Office of the Inspector General, the most urgent timeline for resolution was 72 hours.
  • Anti-VEGF therapy is commonly a multiyear treatment program. What are the implications of patients changing MA plans?

An OIG review of CMS audits found that CMS cited 56% of audited MA organization contracts for inappropriately denying services or payment. CMS also cited 45% of audited MA organization contracts for sending denial letters with incomplete or incorrect information, which may inhibit the ability of beneficiaries and providers to file successful appeals. The pattern of behavior was one of denial, obstruction, and confusion. Should we expect implementation of step therapy to be any different?

The OIG report noted a central concern about the capitated payment model used in MA plans: the potential incentive for insurers to inappropriately deny access to services and payment in an attempt to increase their profit. MA organizations that inappropriately deny services to Medicare beneficiaries, or payments to providers, not only contribute to physical or financial harm, but also misuse Medicare program dollars that CMS pays for beneficiary health care. The OIG noted that the growth in the MA program from 8 million beneficiaries in 2011 to 21 million in 2018 increased the potential adverse impact of its findings.


Many retina practices are already struggling with the implementation of step therapy. The advent of step therapy in MA plans will require increased physician and staff time that further impedes patient care. It may be prudent for practices to develop internal protocols to deal with step therapy. Such protocols should be designed to minimize administrative hassles but be flexible enough to optimize patient care.

The obvious default solution is to simply start all patients on bevacizumab and see what happens. For many, perhaps most, patients, this approach will work well. The devil will be in the details for patients who do not respond as well as they or their ophthalmologist had hoped. We need step therapy protocols to be evidence-based, transparent, and standardized so that patients and ophthalmologists can know what to expect. Buckle up, it is going to be a bumpy ride.

1. Martin AB, Hartman M, Washington B, Catlin A. National health care spending in 2017: growth slows to post-great recession rates; share of GDP stabilizes. Health Aff (Millwood). 2019;38(1):1-11.

2. Department of Health and Human Services. Medicare program; International pricing index model for medicare part B drugs. cms.gov/sites/drupal/files/2018-10/10-25-2018%20CMS-5528-ANPRM.PDF. Published 2018. Accessed February 6, 2019.

3. Centers for Medicare and Medicaid Services. Contract Year (CY) 2020 Medicare Advantage and Part D Drug Pricing Proposed Rule (CMS-4180-P). CMS.gov website. cms.gov/newsroom/fact-sheets/contract-year-cy-2020-medicare-advantage-and-part-d-drug-pricing-proposed-rule-cms-4180-p. Published November 26, 2018. Accessed February 6, 2019.

4. Chambers JD, Kim DD, Pope EF, Graff JS, Wilkinson CL, Neumann PJ. Specialty drug coverage varies across commercial health plans in the US. Health Aff (Millwood). 2018;37(7):1041-1047.

5. Hutton DW, Newman-Casey PA, Zacks DN, Stein J. Switching to less-expensive blindness drug could save Medicare part B $18 billion over a ten-year period. Health Aff (Millwood). 2014:33(6);931-939.

6. Ginsburg PB, Williams GA. Treatment-specific payment approaches: the case of macular degeneration. Health Affairs Blog. healthaffairs.org/do/10.1377/hblog20171117.667415/full/. November 27, 2017. Accessed February 6, 2019.

7. Department of Health and Human Services Office of Inspector General. Medicare Advantage appeal outcomes and audit findings raise concerns about service and payment denials. Department of Health and Human Services Office of Inspector General website. https://oig.hhs.gov/oei/reports/oei-09-16-00410.asp. Published September 2018. Accessed February 6, 2019.