New York AG sues insurer over restrictive hep C coverage

New York AG Eric Schneiderman
New York Attorney General Eric Schneiderman

The New York State Attorney General has already taken some steps to find out why insurers are limiting coverage of pricey hep C meds to the sickest patients but has stopped short of suing companies for their decisions. Now, he’s stepping up his fight.

New York Attorney General Eric Schneiderman’s office is suing health insurer CDPHP for breaking the law by delaying coverage of hep C treatments until patients are in advanced stages of the disease, The Times Union reports. The AG said in a suit filed in a state Supreme Court that the Albany, NY-based insurer did not pay for medically necessary care and deceived members about their coverage.

CDPHP restricted coverage of hep C treatments because of how expensive they were but never told members in plan documents that cost would play a role in determining coverage. The insurer also did not reveal how it determines when benefits will be covered, which violates state health and insurance laws, the AG’s office said in its suit.

“Forcing patients to wait for care, risking internal organ damage, is unconscionable and, as we allege in our lawsuit, violates the law and the company’s own policies,” Schneiderman said in the suit, as quoted by the Times Union.

CDPHP is standing by its actions. The insurer’s hep C coverage is about the same as or better than that of other companies, spokeswoman Ali Skinner told the newspaper in an email. And CDPHP uses coverage guidelines similar to New York state’s Medicaid program, she added.

Plus, the insurer’s coverage decisions “are made based upon the use of evidence-based clinical criteria, not upon political agendas or actions,” Skinner said. “Despite an ongoing dialogue between the entire industry and the state, the Attorney General’s office has chosen CDPHP, a national leader in quality and customer satisfaction, to initiate litigation on this matter.”

The suit comes on the heels of more action from Schneiderman’s office. In March, the New York AG asked some of the country’s biggest insurers including Anthem ($ANTM) and Aetna ($AET) to hand over documents explaining how they make coverage decisions for pricey hep C meds.

Hep C drugs promise a cure, but their list prices of about $1,000 a pill, or $84,000 per patient in the case of Gilead’s ($GILD) Sovaldi, have some insurers and payers reeling. Even when companies offer discounts of 40% or more, the cost of the drugs is too much for insurers to stomach. Some Medicaid programs have refused to cover the drugs at all.

Meanwhile, patients are also pushing back at insurers limiting coverage of hep C meds. Earlier this year, two patients in Washington state sued insurers Group Health Cooperative and BridgeSpan for restricting coverage for hep C treatments. Insurers say the drugs are too expensive to cover, which then forces patients to wait for treatment, lawyers for the plaintiffs said at the time.

"When an insurer limits coverage only to its sickest members, it amounts to an irrational and short-sighted rationing of care. From the perspective of an individual living with HCV who is excluded from the cure, that care is the very definition of 'medically necessary,'" Kevin Costello, litigation director at the Center for Health Law and Policy Innovation at Harvard Law School, said in a February release.

- read the Times Union story (sub. req.)