Dive Brief:
- An Illinois law signed last week prohibits health insurers from requiring “step therapy” — a practice in which physicians are required to treat covered patients with less expensive treatments before moving to more expensive ones — and prohibits requiring prior authorization for certain emergency mental health treatment.
- Gov. J.B. Prtizker signed H.B. 5395 into law July 10. During a signing event, Pritzker said the bill would put medical decisions back into the hands of patients and their physicians and address “the practices that actively make care less affordable and harder to access.”
- The law does not cover self-insured health plans governed by the Employee Retirement Income Security Act. It is set to take effect Jan. 1, 2025.
Dive Insight:
Of the two components highlighted in Illinois’ legislation last week, the state’s ban on step therapy is “a lot more interesting,” according to David Shillcutt, attorney and member of the firm at Epstein Becker Green. While many health systems already do not require prior authorization for emergency mental health admissions, Shillcutt said, Illinois “has been on the leading edge” of state restrictions on utilization management practices like step therapy.
Shillcutt added that patients at times have a choice between drugs that treat similar health conditions and that step therapy has been used as a tool to reduce spending on more expensive drugs that are no more effective than less expensive counterparts. But it is hard to predict the exact consequences of banning the practice as Illinois did, he said.
“I think [Illinois] employers are going to see increasing spending on prescription drug benefits and may want to consider navigators or additional services to help patients evaluate the treatment options,” Shillcutt said.
In a twist, Shillcutt said that health plans affected by the state’s ban on step therapy could turn to prior authorization requirements for certain treatments instead. The law contains additional provisions for covered plans requiring them to disclose to the general public information on prior authorization controls for each drug they cover.
A December 2021 survey by the American Medical Association found that more than half of practicing U.S. physicians said that prior authorization requirements interfered with a patient’s ability to perform job responsibilities.
The state’s reforms come as mental health issues remain prevalent within the U.S. workforce. An Eagle Hill Consulting report published last month found that employers “may have hit a wall” in addressing employee burnout specifically, the firm’s President and CEO Melissa Jezior said in a press release.
Additionally, mental health employee benefit utilization is still a pain point for employers. A report last year by telemedicine company Amwell found that 85% of surveyed employees did not use their mental health benefits, with some citing access and lack of time as reasons for not doing so.
Mental health parity in insurance coverage also has been a challenge. Concerns about outcomes for patients experiencing mental health issues led the Biden administration to announce a 2023 proposed rule requiring health insurers to analyze patient outcomes and prohibiting health plans from utilizing prior authorization and similar techniques for mental health and substance use disorder providers, Healthcare Dive reported. A final rule is expected this month, according to the White House Office of Information and Regulatory Affairs.