State AIDS Drug Assistance Programs: A National Status Report on Access

Acknowledgments

This report would not have been possible without the generous financial support of the Henry J. Kaiser Family Foundation and their continuing commitment to be at the forefront of HIV/AIDS policy issues. The authors would especially like to thank Dr. Mark D. Smith, who assisted with initiating the project and Dr. Sophia Chang and Tina Hoff of the Kaiser Family Foundation for their support, encouragement and expert advice in shaping this report.

We owe a great deal of gratitude to our project advisory committee members who reviewed and provided suggestions for this report and our national ADAP survey. They are: Moises Agosto, National Minority AIDS Council; Dr. Roxanne Cox-Iyamu, Whitman Walker Clinic; Anne Donnelly, Project Inform; Anita Eichler, Division of HIV Services (HRSA); T. Randolph Graydon, Health Care Financing Administration; Tracey Hooker, National Conference of State Legislatures; David Mulligan, Massachusetts Department of Public Health; Tracey Orloff, National Governors’ Association; Valerie Reeder, Heaven in View, Inc.; Gary Rose, formerly of AIDS Action Council and now with IssuesSphere; and Jane Silver, American Foundation for AIDS Research.

We also wish to express our gratitude to the members of the National Alliance of State and Territorial AIDS Directors (NASTAD) and the AIDS drug assistance program (ADAP) coordinators across the country for completing the national ADAP survey that was the basis for this report. We are truly grateful that, in the midst of a time of crisis, and often with minimal or non-existent staff support, these individuals took the time to respond to our survey and numerous follow up telephone calls.

Finally, special thanks to the state AIDS directors, ADAP program managers, state and federal officials and HIV/AIDS policy advocates who devoted additional time to review and provide feedback on the draft of this report. Their contributions, along with those of our project committee, have helped to make this summary report and its companion technical report among the most comprehensive and useful documents on the status of ADAPs ever published.

The principal authors of this report are Arnold Doyle, Richard Jefferys and Joseph Kelly.

The National ADAP Monitoring Project

In an effort to monitor the rapidly changing fiscal and scientific environments in which state AIDS drug assistance programs (ADAPs) are operating, and the impact of these changes on the programs and the individuals that they serve, the National Alliance of State and Territorial AIDS Directors (NASTAD) was commissioned by the Henry J. Kaiser Family Foundation, Menlo Park, CA to conduct a two-year National ADAP Monitoring Project. NASTAD is uniquely qualified to monitor the situation of state ADAPs as it is an association of the individuals who direct AIDS prevention, care and treatment services at the state level. NASTAD’s co-funded partner in the project, the AIDS Treatment Data Network (ATDN), is one of the most highly respected HIV/AIDS treatment information centers in the nation; ATDN maintains an on-line information library of the most recent treatment advances in HIV/AIDS, as well as detailed information on publicly- and privately-funded sources of reimbursement for HIV/AIDS treatments, including ADAPs.

Through the National ADAP Monitoring Project, NASTAD and ATDN will produce summary and comprehensive technical annual reports on the status of state ADAPs, with follow-up reports at six-month intervals, over the next two years. This July 1997 report provides a summary of the major findings of a national ADAP survey completed in March 1997. A longer, more comprehensive technical report based on the national survey is available through NASTAD at (202) 434-8090 or the Kaiser Family Foundation (800) 656-4533. Both the summary report and the technical report are also available for downloading from the Internet at http://www.aidsnyc.org/adap/. This Internet site, developed by ATDN, also contains detailed descriptive information about every state ADAP including program eligibility, application procedures, access and drug coverage. NASTAD and ATDN can also be reached at the following addresses:

The National Alliance of State and Territorial AIDS Directors444 North Capitol Street, NWSuite 339Washington, DC 20001(202) 434-8090(202) 434-8092 (FAX)

AIDS Treatment Data Network611 Broadway, Suite 613New York, NY 10012-2809(800) 734-7104(212) 260-8869 FAX

Executive Summary

State AIDS drug assistance programs (ADAPs) provide access for people living with HIV/AIDS to medications that treat HIV disease and prevent the onset of opportunistic infections. State ADAPs serve as a critical lifeline for many low-income individuals living with HIV/AIDS in the United States who do not have public health insurance or adequate private health insurance. These state-administered drug reimbursement programs form one link in the continuum of publicly-funded HIV care and services available to low-income individuals supported by the Ryan White CARE Act, Medicaid, Medicare, and local indigent health care programs. The critical role that ADAPs play in improving access to HIV/AIDS treatments have made these programs the subject of increasing public scrutiny and debate.

ADAPs were developed to serve those who are uninsured and those who are underinsured and lack coverage for medications. Potential clients include those individuals who may not be disabled and therefore cannot qualify for government-sponsored health insurance programs like Medicaid. Within general federal guidelines established through the CARE (Comprehensive AIDS Resources Emergency) Act, states set unique program financial and medical eligibility criteria for their ADAPs, determine the type and number of drugs covered by the program (the ADAP formulary), and establish how covered drugs will be purchased and distributed to clients. This has led to wide variability among ADAPs from state to state vis-a-vis their structures, eligibility criteria, accessibility and the type and scope of prescription drug coverage available to clients.

In March of 1997, the National Alliance of State and Territorial AIDS Directors (NASTAD) in collaboration with the AIDS Treatment Data Network (ATDN) conducted a comprehensive survey for the Kaiser Family Foundation of all 52 AIDS programs in the United States that receive funds through Title II of the Ryan White CARE Act. The following is a summary of the major findings of this national study:

What’s Recently Been Happening With ADAPs?

• There has been a great leap forward in HIV/AIDS treatment over the past year driven largely by the advent of combination anti-HIV regimens containing protease inhibitors. But these new drug therapies come with a high price tag. Faced with rising expenditures, a burgeoning number of clients, and finite resources, many states were forced to take drastic measures to avoid bankrupting their ADAPs. Thirty-five states reported taking at least one emergency measure in the last year in response to the crisis in ADAP funding and increased demand for combination therapies. Among these measures were:
  • capping program enrollment
  • restricting access to certain formulary medications
  • reducing drug coverage, and
  • delaying or indefinitely suspending coverage of the new drugs.

• Despite the emergency measures undertaken to prevent funding shortages, eleven states responded that they predict a shortfall in FY 1997: Alabama, Arizona, Arkansas, Colorado, Montana, New Mexico, Puerto Rico, Texas, Vermont, Washington State and West Virginia. Three other states have been forced to severely limit services in 1997 in response to increased demand and costs: Florida, Mississippi and South Dakota.
• The total national ADAP budget for FY 1997 is $385 million. The majority of funds are from federal sources, including $167 million which are specifically designated for ADAP. That amount increased by 221% over the FY 1996 budget. Other federal Ryan White CARE Act dollars also contribute to the program.
• Although 30 states have supplemented federal support for ADAPs with state spending, 22 states have not contributed to the program in FY 1997. Almost two-thirds of the total state contributions to ADAP are provided by California, Louisiana, New York, and Illinois.
• Nationally, from July to December 1996, the number of ADAP clients served increased by 23% — an average increase of approximately 1,000 utilizing clients per month. Forty-two state ADAPs reported increases in the number of clients served during the last six months of 1996. Six of those states reported an increase in utilizing clients of 50% or more: Arkansas, Connecticut, Kentucky, Maryland, Oklahoma and Utah.
• Monthly program expenditures increased 37%, from $14.9 million in July 1996 to $20.4 million in December 1996. Forty-four of the state ADAPs reported increases in their monthly expenditures during the same time period; fourteen of those states reported expenditure increases of 50% or greater. The average per client expenditure among ADAPs nationally over the last six months of 1996 was approximately $506 per month or $6072 annualized.
• ADAP budgets grew nationally by 85% from 1996 to 1997, and increased over 314% since 1995. Despite the growth in ADAP budgets, many states have been unable to meet the demand from higher numbers of clients for a greater number of drugs, especially the newer antiretroviral agents.
• In the month of December 1996, 38,500 clients were served by ADAP programs nationally, according to the most current available data. During calendar year 1996, the national estimate of the cumulative number of clients served by ADAP was 80,000. (Annual estimates are limited due to monthly reporting and variable lengths of client tenure in the program.)

How Accessible and Comprehensive Are ADAP Services?

• There is wide variation among state ADAPs in their drug coverage. Access to both antiretrovirals and drugs for AIDS-related opportunistic infections (OIs) remains uneven among state ADAPs.
  • All state ADAPs except Louisiana provide coverage for basic antiretroviral treatments. (In Louisiana, a separate state program provides these drugs.)
  • In 1996, thirteen states restricted access to protease inhibitors.
  • In 1997, four state ADAPs do not cover protease inhibitors on their formularies and two state ADAPs cover only one protease inhibitor.
  • Only five state ADAPs cover the thirteen basic drugs recommended by the Infectious Disease Society of America (IDSA) and Public Health Service (PHS) in 1995 for the prevention of opportunistic infections (OIs).
  • Five state ADAPs do not cover any of the strongly recommended prophylactic drugs in the updated 1997 IDSA/PHS opportunistic infection prevention guidelines. Only two state ADAPs have the full complement of fourteen strongly recommended drugs on their current formularies.

• There is also wide variation among state ADAPs in their eligibility criteria:
  • Financial eligibility cutoffs range from 100% to 400% above the federal poverty level, though the majority of ADAP clients are below 200% of poverty.
  • Most states use HIV infection as the basis for medical eligibility, though twelve states also require CD4 count and/or viral load information.

Future Opportunities and Challenges

• It is very difficult to estimate the precise number of persons with HIV who may be eligible for state ADAP programs. One estimate would be a range between 140,000 and 280,000 persons with HIV nationally. This range is based on the Centers for Disease Control and Prevention’s estimated number of individuals with HIV disease in the U.S. (650,000 to 900,000 people), and the 1992 Agency for Health Care Policy and Research study estimate of persons in care with symptomatic HIV who are uninsured (21.4%). This estimate represents between a two- to four-fold increase in potential ADAP clients. It should be noted that this estimate does include persons who may not know their HIV status and/or may not be in a system of care.
• Recently released federal guidelines for HIV antiretroviral therapy recommend that patients start on a combination regimen earlier in the course of HIV disease. Although the implications of implementing these new guidelines have not been established, they will likely increase pressure on state ADAPs to expand drug coverage and keep pace with expected client growth. Unfortunately, many state ADAPs are unprepared to offer this standard of care to eligible patients who may be candidates for triple combination therapy.
• There is room for improvement for many ADAPs to squeeze additional cost containment out of existing mechanisms like federal drug discount pricing and rebates by improving drug distribution systems. The challenge will be in the effective implementation of initiatives to enhance the purchasing power of ADAPs, including pharmaceutical rebates and a prime vendor system.
• Enhancing the ADAP interface with state Medicaid programs also presents opportunities and challenges. There will likely be increased pressure to assure that ADAP represents the payer of last resort and that Medicaid programs are not inappropriately limiting prescription drug coverage. Limitations on Medicaid drug coverage applies increased pressure on financially strained ADAPs to pick up the burden of paying for drugs for underinsured Medicaid-eligible populations.
• Many states are exploring innovative strategies for broadening access to HIV/AIDS therapies such as health insurance continuity programs and purchasing insurance through state risk pools. For states such as Minnesota and Oregon, insurance purchasing and continuity programs represent the bulk of their efforts to provide access to medications for low-income people living with HIV/AIDS. These and other initiatives may narrow the gap that state ADAPs fill to provide uninterrupted medication coverage for eligible individuals with HIV/AIDS.
• Significant additional federal and state resources will be needed to enable ADAPs to maintain pace with demand to deliver the standard of care for HIV therapy. Diversity of federal, state and other resources is a likely predictor of fiscal stability for ADAPs in the future.

Background

Why Does ADAP Exist?

ADAP exists because there is a gap in access to coverage for medications for low-income people living with HIV/AIDS in the United States. ADAPs are intended to serve those who are uninsured, and those who are underinsured (lacking coverage for medications). These groups include those individuals who may not be disabled and therefore cannot qualify for government-sponsored health insurance programs like Medicaid. Since 1991, the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act has provided federal funding to states, localities, and community health centers to provide services for individuals with HIV/AIDS. Specifically, the funds are targeted to those who lack access to or insurance for primary medical care, medications, early diagnosis and treatment, and supportive services. The CARE Act allocates federal Title II funding directly to states and requires them to use a portion of these funds to provide HIV therapeutics, including prophylaxis and treatment of opportunistic infections, for low-income individuals.

The need for ADAP was first identified in 1987 when Congress provided an emergency appropriation of $30 million to states to establish a reimbursement mechanism for low-income individuals with HIV/AIDS to access AZT (Retrovir) — the first anti-HIV drug approved by the Food and Drug Administration (FDA). The rationale for public funding of AIDS drug assistance for low-income individuals was rather straight-forward. AZT was not cheap and individuals living with HIV/AIDS needed access to therapies to prolong and improve the quality of their lives regardless of their ability to pay. The need continued to be apparent and has more recently been placed into sharp focus with the advent of combination antiretroviral therapies, which include protease inhibitors. But these promising treatments are out of reach for many low-income individuals who lack public or private health insurance. That is precisely the reason why ADAPs exist and why they are currently struggling to keep pace with treatment advances, increased costs and client demand.

What is ADAP?

Currently, ADAPs are authorized under Title II of the Ryan White CARE Act, funded at the federal level by the Health Resources and Services Administration (HRSA) and managed by states. It is important to recognize that ADAPs are one piece of a larger health care puzzle for people living with HIV/AIDS. In fact, many state ADAPs are structured to wrap around public health care programs — Medicaid, Medicare and local indigent care programs — to ensure some continuity of access to outpatient HIV medications. Most state ADAPs are administered by the state public health departments, however, a few programs are administered by the state Medicaid agency, regional CARE-funded consortia, or by a contracted administrative agency.

Within general guidelines established by the federal government through the CARE Act, states set unique program financial and medical eligibility criteria for their ADAPs, determine the type and number of drugs covered by the program (the ADAP formulary), and establish how covered drugs will be purchased and distributed to clients. This has led to wide variability among ADAPs vis-a-vis their structures, eligibility, accessibility and the type and scope of prescription drug coverage available to eligible clients. There are several variables in each state which have led to this reality: 1) the size and demographics of the HIV/AIDS epidemic; 2) the traditional structure of public health and indigent health care systems; 3) the availability of state resources; 4) variations in Medicaid programs — including eligibility criteria, the type and extent of pharmacy benefits, and the existence of a managed care waiver which may limit drug coverage; and 5) state insurance regulations and economies which may affect private health insurance availability.

While there were relatively few treatments available to treat HIV/AIDS until recently, state ADAPs were relatively benign — albeit important — programs within the context of health care for people living with HIV/AIDS. However, in mid-1995, ADAPs began to experience explosive growth in the number of enrolled and utilizing clients, and in monthly expenditures. This growth was due mainly to the development of new treatments, including antiretrovirals and opportunistic infection prophylaxis/treatment.

What’s Recently Been Happening With ADAPs?

The great leap forward in HIV/AIDS treatment over the past year has been driven largely by combination anti-HIV regimens containing protease inhibitors. These therapies are known as antiretrovirals and attack HIV at different points during the virus’ replication process. The first rapid period of growth in ADAPs began with the approval of 3TC (Epivir) — a reverse transcriptase inhibitor, which was marketed shortly before the first protease inhibitor, saquinavir (Invirase), was approved in late 1995. In early 1996, two additional protease inhibitors, ritonavir (Norvir) and indinavir (Crixivan), received FDA approval. The licensure of these new drugs and their reported efficacy in slowing the progression of HIV disease sparked a resurgence of interest in antiretroviral therapy.

Faced with rising expenditures, a burgeoning number of clients, and finite resources, many ADAPs were forced to take measures to avoid bankrupting their programs. Among these measures were: capping program enrollment, restricting access to certain formulary medications, reducing drug coverage, and delaying or indefinitely suspending coverage of the new drugs. Increasingly, ADAPs were only able to fill a smaller portion of the gap between private insurance and Medicaid. Especially vulnerable were lower- and moderate-incidence states (states with relatively few reported AIDS cases) that receive less federal Ryan White CARE funding and often no state support. Other “safety net” programs — including drug manufacturer-sponsored patient assistance programs — were also inadequate to the task of ensuring continuity in prescription drug coverage for lower income individuals living with HIV/AIDS.

The appropriation of $52 million in federal emergency ADAP funding in fiscal year (FY) 1996 provided some relief to the programs. Many programs, however, were forced to continue waiting lists for enrollment, reduce formularies and restrict drug coverage. Throughout 1996, three major factors would continue to influence the ability of ADAPs to provide drugs to intended client populations: the emergence of combination antiretroviral therapy as a standard of care; increasing ADAP utilization; and the financial resources of the programs.

The Emerging Standard of Care

From November 1995 through April 1996 four new antiretroviral agents were approved by the FDA for the treatment of HIV; three of these new drugs belonged to a potent new class of antiretrovirals known as protease inhibitors. In the space of six months, the arsenal of antiretroviral drugs doubled. These new agents were also found to be more effective when used in combination, specifically the simultaneous use of three antiretrovirals.

The promise of these new drugs, however, has come with a steep price. The estimated cost of triple combination therapy, including a protease inhibitor, ranges from $10,000 to $15,000 per year. In June 1997, the U.S. Department of Health and Human Services (DHHS) released draft guidelines for the use of antiretroviral agents in HIV-infected adults and adolescents developed by the Panel on Clinical Practices for Treatment of HIV Infection convened by DHHS and the Henry J. Kaiser Family Foundation. These recommendations represent the current state of knowledge regarding the best strategies for implementing antiretroviral therapy for individuals with HIV/AIDS and may drive increased attention to and demand for HIV/AIDS therapies.

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State AIDS Drug Assistance Programs: A National Status Report on Access:Press Release Report Part One Part Two State Data

State AIDS Drug Assistance Programs (ADAPs): A National Status Report on Access

A survey of AIDS Drug Assistance Programs or ADAPs, which provide drug financing for people living with HIV/AIDS who do not have private or public health insurance, in the fifty states and the District of Columbia and Puerto Rico. The study includes information on ADAP eligibilty requirements, budgets, state contribution to the program, drugs covered and “emergency measures” states have taken to contain costs.

For an updated report, please see National ADAP Monitoring Project: Interim Technical Report, #1379.

• News Release: HTML format
• News Release: Despite Funding Increases in Recent Years, Many States Limiting AIDS Drug Assistance Programs (ADAPs) in Response to Growing Demand and Costs
• Toplines/Survey
• Toplines/Survey
• Report
• Report

The ADAP Survey

Survey Methods

In an effort to monitor the impact of the environment on ADAP programs and the individuals they serve, the Henry J. Kaiser Family Foundation funded a two-year project, the National ADAP Monitoring Project, with the National Alliance of State and Territorial AIDS Directors (NASTAD). NASTAD is an association of the individuals who direct AIDS prevention, care and treatment services at the state level. NASTAD’s partner in the project is the AIDS Treatment Data Network (ATDN), a highly respected HIV/AIDS treatment information center, which maintains both an on-line information library as well as detailed information on publicly- and privately-funded sources of reimbursement for HIV treatments.

NASTAD/ATDN developed a written survey for distribution to state AIDS directors and ADAP program managers in the fifty states, the District of Columbia and Puerto Rico. An eleven-member project advisory committee provided input on the survey design, implementation, and reporting. The survey contained thirty-six questions to assess program operations/trends in the following areas:

• Program Administration
• Drug Purchasing and Distribution Mechanisms
• Program Eligibility Requirements/Client Access
• Drug Formularies
• Program Budget (FY 1996 and FY 1997)
• Program Cost-containment Strategies
• Program Monthly Enrollment, Utilization, and Expenditures
• Barriers to the Provision of Service

The survey was fielded in mid-January 1997 and a total of 52 responses were received by mid-March. Follow-up telephone interviews were conducted to clarify submitted information and verify reported budget, expenditure, and utilization figures. States were asked to provide the total number of ADAP enrollees, the total number of utilizing ADAP clients and total monthly expenditures on pharmaceuticals for the months of July 1996 and December 1996. A “utilizing client” was defined as a client who received at least one prescription through the program during the given month. Actual and percentage increases/decreases in program client utilization and expenditures were calculated over the six month period.

NASTAD/ATDN took a snapshot of all state ADAPs in terms of clients served and program expenditures for the months of July 1996 and December 1996. In future surveys, we will be examining utilization trends by gathering information on the number of prescriptions filled and specific drug expenditures.

Recent Trends Among ADAPs: Clients Served and Expenditures

Based on the survey, the 52 ADAPs served 31,317 individuals during July 1996; that number increased by 23% to 38,500 individuals in December 1996. During the last six months of 1996, forty-two state ADAPs experienced increases in the number of utilizing clients (clients actually having prescriptions filled through the program). Some state ADAPs experienced a 50% percent or more increase in the number of clients served, including Arkansas (50%), Connecticut (64%), Kentucky (53%), Maryland (67%), and Utah (68%). During calendar year 1996, the national estimate of the number of clients served by ADAP was 80,000. (Annual estimates are limited due to monthly reporting and variable lengths of client tenure in the program.)

ADAPs also experienced significant increases in monthly expenditures during the last half of 1996. Program expenditures were reported to be $14.9 million in July 1996; expenditures grew 37% to $20.4 million. From June 1996 through December 1996, forty-four state ADAPs saw increased monthly program expenditures. Thirty-two ADAPs experienced increases of 20% or more and fourteen state programs saw expenditures rise by 50% or more in the last half of 1996. Several state ADAPs’ monthly expenditures rose by more than 100%, including Arkansas (104%), Connecticut (137%), Idaho (113%), Kentucky (103%), Maryland (116%), Mississippi (411%), North Dakota (101%), Texas (114%) and Utah (114%). The average per client cost among ADAPs nationally over the last six months of 1996 was approximately $506 per month or $6072 annualized.

These significant increases in program utilization and monthly expenditures occurred within the context of the discovery and approval of new treatments. They also occurred, at least initially, within the context of stable or incrementally increasing ADAP budgets. By mid-1996, it was apparent that the increasing demand for access to new therapies through ADAP would outstrip the financial resources of many of these programs.

ADAP Budgets: Federal and State Resources

The FY 1997 national ADAP budget totals $385 million and is composed of a variety of funding sources. These sources are:

• Ryan White CARE Act Title II grants to states — including dedicated federal ADAP support ($167 million) and discretionary Title II funding ( $59.9 million) which states may allocate to ADAP — totaling an estimated $226.9 million;
• State funding which 30 states draw from their general revenue and contribute to their ADAP — totaling an estimated $109 million;
• Ryan White CARE Act Title I funding which Eligible Metropolitan Areas (EMAs) in 13 states opt to contribute to state ADAPs totaling an estimated $22.7 million;
• Pharmaceutical manufacturer rebates for drug purchases/reimbursement in 21 states totaling an estimated $18.5 million;
• Private health insurance recovery of costs was reported by 3 states totaling $7.4 million;
• Other funding sources such as transfers from other discretionary sources and back-billing of Medicaid for the period for which an ADAP client is in the process of applying for state Medicaid eligibility was reported by 4 states — totaling $0.5 million.

In response to the shortages and the new demands for HIV/AIDS therapies, the national ADAP budget increased by $174 million (85% growth) between FY 1996 and FY 1997. The two most significant developments in the national ADAP budget picture in FY 1997 were the substantial increase in dedicated ADAP supplemental funding ($167 million total, representing a 221% growth over the previous year) and the doubling of state general revenue contributions nationally ($109 million total reported to NASTAD/ATDN, representing a 103% growth over FY 1996).

National ADAP Funding Source Changes Between 1996 and 1997 Funding Source FY 1996 FY 1997 % Change Title II Base (Federal): $58.2 million $59.9 million +3% Title II ADAP (Federal): $52.0 million $167 million +221% State Funds: $53.7 million $109 million +103% Title I (Federal): $25.9 million $22.7 million -12% Drug Rebates: $11.9 million $18.5 million +55% Insurance Recovery: $5.0 million $7.4 million +48% Other: $0.8 million $0.5 million -37% Total: $207.5 million $385 million +85% Congress appropriated an additional $115 million for Title II ADAP dedicated (or “supplemental”) funding for FY 1997. Federal ADAP supplemental funding has become the single most significant source of funding for most of the nation’s ADAPs, representing 43% of the national ADAP budget in FY 1997. As a line item, it represents the majority of state ADAP budgets in 32 states; in three states (Iowa, Minnesota and Tennessee) ADAP supplemental funding represents 100% of the total ADAP budget.

Thirty states contributed state-specific funding to ADAPs in FY 1997 totaling $109 million and representing 29% of the national ADAP budget. California is expected to provide the most substantial level of funding from its state general revenue fund to ADAP — $40.2 million. California’s state ADAP contribution represents 46% of its total FY 1997 ADAP budget of $87 million.

While at least 30 states are expected to provide funding for ADAP in FY 1997, at least 22 jurisdictions will not be providing state funding or are uncertain about contributions for FY 1997. The substantial growth in overall state funding of ADAPs nationally in FY 1997 is largely occurring within states that have previously provided state ADAP support. Variability in prescription drug benefits in state Medicaid programs — in terms of monthly limits on the number of prescriptions — represents an additional issue which complicates the ADAP budget picture in some states where ADAPs fill in the gaps in Medicaid coverage.

Emergency Measures to Sustain Programs

Despite the growth in ADAP budgets, the increase in client demand detailed in the survey has led numerous states to take emergency measures to sustain coverage of existing clients or make newer antiretroviral agents available. Thirty-five states reported taking at least one emergency measure in the last year in response to the crisis in ADAP funding and increased demand for combination therapies. Among the major emergency actions reported by state ADAPs:

• Seventeen states transferred funds from other AIDS-specific services or other discretionary health department funds to ADAP;
• Sixteen states instituted waiting lists (formal or informal) for access to their ADAP and/or access to protease inhibitors;
• Thirteen states capped ADAP client enrollment;
• Fifteen states capped or restricted access to protease inhibitors for active clients;
• Eleven states reduced the number of drugs covered by ADAP formularies;
• Seven states capped or restricted access to other formulary drugs (besides protease inhibitors);
• Seven states revised ADAP financial eligibility criteria by lowering income levels; and
• Six states canceled planned drug formulary expansions.

ADAP Budget Shortfalls

NASTAD/ATDN asked states if they expect to encounter a shortfall in their ADAPs before the end of the Ryan White Title II FY 1997 budget period (April 1, 1997 — March 31, 1998). Despite the emergency measures undertaken to prevent funding shortages, eleven states responded that they predict a shortfall in FY 1997. The states reporting anticipated shortages are: Alabama, Arizona, Arkansas, Colorado, Montana, New Mexico, Puerto Rico, Texas, Vermont, Washington State and West Virginia. Anticipated shortages reported by the eleven states total over $8.5 million in FY 1997.

It is important to note that some respondents are reluctant to report anticipated shortfalls in ADAP budgets since some state laws/regulations prohibit overspending of federal or state resources. In addition, state administrations may not wish to publicize program shortages before making formal appeals to state legislatures for increased appropriations. Instead, some states will scale back ADAP services — by limiting enrollment or drug coverage — rather than report budget shortfalls. Several states, including Florida, Mississippi and South Dakota, have recently been forced to severely limit access to their ADAPs or substantially cut back on client services in order to sustain limited program operations for the coming year.

Additionally, every state has recently received significant infusions of Ryan White Title II base and/or supplemental funding for FY 1997 programs. It may be too early to predict program budget shortfalls in FY 1997. Several factors may hasten additional states to report shortages before the end of 1997. These include: 1) failure to obtain proposed state and other funding increases for ADAPs; 2) approval of additional high-cost HIV/AIDS therapies before the close of the fiscal year; and 3) the impact of the federal HIV clinical practice guidelines which may drive a greater demand for expanded treatments.

How Accessible and Comprehensive Are ADAP Services?

This section examines the eligibility criteria states establish for client entry into ADAPs based on financial and medical need, as well as the extent of pharmaceutical drug coverage across the states. In addition, the variety of ADAP drug purchasing and distribution structures that exist are described — structures that often determine the accessibility and fiscal status of programs. Finally, barriers to client access — typically resource shortages — are illustrated, including a gross estimate of potential ADAP demand.

Program Eligibility Criteria

Eligibility criteria for access to ADAPs are developed by each state and, therefore, vary from program to program. Eligibility criteria are established at the local level within the guidelines established by the Ryan White CARE Act. Eligibility criteria generally fall into two broad categories: financial eligibility and medical eligibility. Some ADAPs, however, have developed additional eligibility requirements for access to specific formulary drugs. All of these factors contribute to a picture of uneven access to ADAPs across the nation.

Financial Eligibility

The majority of ADAPs use federal poverty guidelines when assessing financial eligibility. The exceptions are Maryland, Massachusetts, New Jersey, New York, Pennsylvania and Puerto Rico. These programs have specific income criteria that do not change annually unlike the federal poverty levels. Montana requests that an applicant provides evidence that the cost of the covered medications will create a severe financial burden on his/her household.

All other state ADAPs specify a percentage of the current federal poverty levels for determining financial eligibility. These percentages can be absolute, or eligibility can be tiered to allow sliding-scale co-payments based on the applicant’s income. Some programs will take into account out-of-pocket medication expenses when determining income, a practice known as “spenddown.”

The ADAPs with the most restrictive income criteria are Arkansas and Utah, which specify an income below 100% of the federal poverty level for full admission to their programs. This would currently mean an annual income of $7,890 or less for one person. However, Arkansas takes into account medical expenses when assessing financial eligibility for their program. Utah operates a sliding scale co-payment system which relates to how much over 100% of the federal poverty level (FPL) the applicant earns.

Other programs with a low financial threshold for admission are Georgia and North Carolina, both requiring an income at or below 125% of the federal poverty level (FPL). In both states, this requirement is absolute and there is no provision for sliding scale co-payments or the consideration of out-of-pocket medical expenses. This is in contrast to the next most restrictive states, North Dakota and Oklahoma, which both require income to be at or below 150% of FPL. North Dakota allows sliding scale co-payments up to 200% of FPL. Oklahoma allows out-of-pocket medication costs to be taken into account when determining income. Florida reports that the income requirement for their program is 200% of FPL, but notes that applicants with incomes between 100% and 200% of FPL will be assessed for a sliding scale co-payment.

At the opposite end of the spectrum, ADAP programs in California, Hawaii, Idaho and Rhode Island require an income at or below 400% of FPL. California allows people earning more than this to make a sliding scale co-payment based on their annual state income tax liability and family size, up to a ceiling of $50,000 per year. It has been observed, however, that even in states that have relatively more generous eligibility criteria, the majority of ADAP clients are earning less than 200% of FPL.

Medical Eligibility Criteria

The basic medical criteria for enrollment into any ADAP is a diagnosis of HIV infection. Alabama, Florida, Georgia, Idaho, Indiana, Mississippi, Nevada and South Carolina also require that an applicant have a CD4 cell count of less than 500, although this can be waived for pregnant women and neonates needing AZT (for the reduction of perinatal HIV transmission). South Carolina also notes that the CD4 requirement can be waived but does not specify under which circumstances.

Kentucky currently requires a CD4 count of under 550 or a history of confirmed pneumocystis carinii pneumonia for enrollment in the program, although again this can be waived for pregnant women and neonates. Iowa requests that applicants have a recent CD4 count result available, but there is no specific CD4 requirement for entry into the program.

A new prognostic laboratory test known as the HIV viral load test is now being used to determine medical eligibility for some ADAPs. The viral load test measures the amount of viral genetic material, known as HIV RNA, in a blood sample. Maine states that a CD4 count of under 400 or a viral load test result of over 20,000 copies/ml is required for admission into the program. Mississippi requires a CD4 count under 500 or a viral load test result of over 30,000 copies/ml. Puerto Rico specifies that the CD4 count be under 500 or the viral load be over 10,000/ml. Louisiana and Virginia require that new applicants have a recent viral load test result available but there is no specific viral load requirement for program entry.

ADAP Drug Formularies

States determine both the number and type of drugs that are available on their state ADAP formulary. Hence, there is a significant variation in the size and composition of ADAP formularies from state to state. ADAP formulary drugs fall into two main categories: antiretrovirals, which target HIV directly, and drugs to treat and/or prevent opportunistic infections.

New York’s ADAP offers the most comprehensive formulary, totaling 214 drugs, hepatitis vaccines and a variety of nutritional supplements and vitamins. This is commensurate with having the largest budget of any ADAP next to California. At the other end of the spectrum is the Louisiana ADAP which covers three drugs — all of which are protease inhibitors. An additional HIV drug formulary, however, is available to low-income state residents through several ambulatory care sites throughout the state, provided under the auspices of the Louisiana Health Care Authority (LHCA). There are plans to combine the state-funded LHCA program with the federally-funded ADAP in order to provide a more uniform HIV pharmaceutical assistance program for people living with HIV in Louisiana.

Although HIV incidence within a state, number of clients served and total budget might be expected to impact upon the comprehensiveness of an ADAP drug formulary, this is not always the case. North Dakota currently offers one of the largest formularies in the nation, although it has the smallest budget of any ADAP. North Dakota also served just fourteen clients during January 1997, making it the second smallest program next to Alaska in terms of clients served.

Antiretrovirals

At the time of our survey, three protease inhibitors were commercially available: saquinavir (Invirase), ritonavir (Norvir) and indinavir (Crixivan). Saquinavir was approved in December 1995, with ritonavir and indinavir approved by the Food & Drug Administration in March of 1996. On March 14, 1997, following the completion deadline for the ADAP survey, a fourth protease inhibitor, nelfinavir (Viracept), received FDA approval.

Four state ADAPs report that they do not cover any protease inhibitors: Arkansas, Nevada, Oregon, and South Dakota. Arkansas notes that formulary expansion is planned, but mentions no specific date. Nevada is considering adding new drugs if state funding can be secured. Oregon’s ADAP reports that formulary expansion may be possible if the ADAP can successfully move more ADAP clients on to more comprehensive health insurance coverage. South Dakota estimates that the program would require an additional $150,000 a year in funding to provide protease inhibitors to eligible clients. Two state ADAPs (Mississippi and Idaho) cover only one of the four approved protease inhibitors as of July 1997. Another thirty-two state ADAPs cover all four protease inhibitors; two of those states (New York and North Carolina) also cover all available antiretroviral drugs.

All ADAP programs, with the exception of Louisiana, offer all five approved nucleoside analog antiretroviral drugs: zidovudine (AZT, Retrovir), didanosine (ddI, Videx), zalcitabine (ddC, HIVID), stavudine (d4T, Zerit) and lamivudine (3TC, Epivir). Some programs, however, may restrict access to these drugs based on specific medical criteria.

Opportunistic Infection Medications

Drugs for the treatment and prevention of opportunistic infections (OIs) have significantly improved the length and quality of the lives of people with AIDS. The preventive treatments available for pneumocystis carinii pneumonia (PCP), for example, have extended survival after an AIDS diagnosis.

Most ADAPs offer some of the available OI drugs, but it is in this category of drug coverage that the widest variability is found across the states. In 1995, the Infectious Disease Society of America (IDSA) in conjunction with the U.S. Public Health Service (PHS) issued Guidelines for the Prevention of Opportunistic Infections in Persons Infected with Human Immunodeficiency Virus. The drugs referenced in these guidelines as “strongly recommended” for the prevention of OIs include: TMP/SMX, dapsone, pentamidine, pyrimethamine, leucovorin, sulfadiazine, clindamycin, fluconazole, itraconazole, isoniazid, foscarnet, ganciclovir and acyclovir. Currently, five ADAPs (10%) report that they have these drugs available on their formularies: Illinois, New York, North Dakota, Pennsylvania and Wyoming.

Currently, there are three drugs approved for the prevention of another common OI, Mycobacterium avium complex (MAC): rifabutin, clarithromycin and azithromycin. All of these treatments have demonstrated a clear ability to prevent MAC and two have also been associated with a distinct survival benefit. Thirty ADAPs cover all three of these drugs. Five ADAPs offer two of these drugs while six ADAPs cover only one.

A revised, updated ISDA/PHS document was released on June 27, 1997, containing fourteen drugs which are strongly recommended for the prevention of OIs. Two state ADAPs (New York and Illinois) currently cover all fourteen drugs on their formularies. Nine additional state ADAPs cover 80% or more of the highly recommended drugs. Five state ADAPs cover none of the highly recommended OI prophylactic drugs.

Drug Purchasing And Distribution Systems

The drug purchasing and distribution systems of state ADAPs have been under increasing scrutiny from Congress, the Administration and HIV/AIDS advocacy organizations over the past several months. The heightened interest is focused on state ADAPs’ ability to take advantage of available drug discounting mechanisms. In order to serve increasing numbers of potential clients while covering new and promising therapies (protease inhibitors in particular), states must carefully evaluate their drug purchasing and distribution systems in order to meet these challenges with finite resources.

The methods that state ADAPs use to purchase formulary drugs may be classified generally as either:

• direct purchasing with central drug purchasing (by the ADAP, or through a state pharmacy, purchasing agent or public agency/hospital); or
• indirect purchasing via contracts with a pharmacy network, mail order pharmacy, or pharmacy benefits management company (PBM) that purchase drugs and are subsequently reimbursed by the ADAP.

State ADAPs that purchase drugs directly usually have a centralized mechanism for dispensing drugs to clients. For example, drugs purchased through a central state pharmacy may be distributed through a network of local public health clinics/hospitals, sent directly to clients, or distributed through clients’ physicians. These “direct purchase” ADAPs participate in federal discount drug pricing programs such as Section 602 of the Veteran’s Health Care Act.¹ Another mechanism for state drug distribution is to allow ADAP eligible clients to receive drugs through their neighborhood drug store or local pharmacy networks. These “indirect purchase” ADAPs may in turn obtain rebates from pharmaceutical manufacturers to achieve cost containment and recovery. All states currently report using one or more cost containment measures — which include use of purchasing discounts, rebates or other cost savings mechanisms — or are making progress toward achieving the lowest possible costs for formulary medications.

Barriers to Serving Potential Clients

ADAPs, by statute, are intended to provide pharmaceutical assistance to low-income, uninsured and underinsured individuals. This may include lower-income individuals who: have no private insurance coverage, have inadequate prescription coverage through their private insurance or do not meet financial, disability or other criteria for Medicaid. There has been little effort in the past to identify the barriers that ADAP programs face in attempting to serve intended client populations.

States were asked to list the barriers, in order of severity, that impact on their ability to serve intended client populations. Twenty-four states indicated that inadequate funding is the primary barrier. Six states cited various administrative issues as another barrier to adequate service delivery and six indicated that lack of adequate service coordination with other providers — especially in rural areas — was a barrier to the adequate provision of service. Four states identified lack of coordination with the state Medicaid program as a barrier.

There are currently no national projections of the potential universe of ADAP clients who could be served in the absence of the identified barriers. According to the Centers for Disease Control and Prevention (CDC), twenty-eight states collect data on HIV infection rates in addition to AIDS cases, and two of these states only collect information on new HIV infections for infants. The lack of sufficient data on reported HIV infection in all states, in addition to a lack of a current and complete assessment of the numbers of HIV-infected individuals and individuals with AIDS who have adequate private insurance and/or Medicaid, makes a precise estimate of the potential ADAP client population problematic.

A gross estimate of potential demand for ADAPs nationally, however, can be extrapolated from existing published data sources. CDC estimates that there were 650,000-900,000 individuals with HIV in the U.S. in 1992. Based on a 1994 published study on AIDS cost and services utilization (ACSUS) from the federal Agency for Health Care Policy Research (AHCPR), approximately 21.4% of persons with symptomatic HIV disease receiving care in the U.S. have no health insurance coverage.² This population would represent those for whom triple therapy would be uniformly recommended and who would generally be eligible for an ADAP program (although no income information is available). This number is likely an underestimate of those who are uninsured who would be eligible for HIV therapy and does not include any estimates of the number of underinsured. This number is likely an overestimate of those who are aware of their HIV status and in care. Based on these estimates, between 140,000 to 280,000 individuals could potentially be eligible for the ADAP program. This number represents a two- to four-fold increase from the current estimate of 80,000 clients being served nationally on an annual basis.

Future Opportunities and Challenges

The information obtained from this survey paints a complex and often paradoxical picture of state ADAP programs. Although federal and some state contributions to these programs have increased dramatically over the past two years, evidence from many states indicates that resources remain insufficient to adequately serve people living with HIV/AIDS. As promising new treatments have become available, many ADAPs have sought to include these drugs on their formularies, yet many ADAPs are also faced with making difficult decisions regarding who may have access to these treatments due to severe budget constraints. Some state ADAP formularies offer a large menu of HIV and OI drugs, while others offer only a few.

For many individuals, ADAPs represent the primary — and sometimes the sole — source of access to medications which may significantly improve the quality and length of their lives. The high cost of combination antiretroviral therapy may be out of reach for individuals who continue to work and have no or inadequate insurance coverage, and who are not ill or poor enough to qualify for Medicaid. These individuals may also be excluded from eligibility for ADAPs based on financial or medical eligibility restrictions.

There is a growing body of literature which suggests that the use of combination therapy including protease inhibitors is a potentially cost-effective means of providing care for people living with HIV/AIDS. In fact, when compared with the cost-effectiveness of other commonly-used medical interventions, combination antiretroviral therapy is shown to be an economically sound investment in terms of cost per year of life saved.³ Making appropriate treatment available to people living with HIV/AIDS is not only medically and ethically supported, it may also make sound economic sense as well.

Future Considerations

Given the growing demand upon ADAP programs and the resulting cost implications — coupled with the tightening federal and state budget scenarios over the next several years — it appears likely that ADAPs, as they currently exist, are not prepared to fill the ever-increasing coverage gap for people living with HIV. From its inception, ADAP was designed to fill in a service gap and that gap is widening. Several proposals have recently been forwarded to help improve access to treatments for people living with HIV/AIDS. One such proposal would allow states to extend limited Medicaid benefits, including coverage for antiretroviral therapy, to individuals with HIV who do not meet disability criteria for access to Medicaid.

Among the major opportunities and challenges facing ADAPs in the future:

• Significant additional federal and state resources will be needed to enable ADAPs to maintain pace with demand to deliver the standard of care for HIV therapy. Although 30 states supplement federal support for ADAPs, 22 states do not contribute to this program. Diversity of federal, state and other resources is a likely predictor of fiscal stability for ADAPs in the future.
• Federal guidelines for HIV antiretroviral therapy will likely result in increased pressure on ADAPs to expand drug coverage and keep pace with expected client growth. Although the policy and budget implications of implementing these new guidelines have not been established, they will have a critical impact on state ADAPs.
• There is clearly room for improvement for many ADAPs to squeeze additional cost containment out of existing purchasing mechanisms, such as: federal drug discount pricing, pharmaceutical manufacturer rebates and better drug distribution systems. The challenge will be to effectively implement additional initiatives to enhance the purchasing power of ADAPs, including pharmaceutical rebates and a prime vendor system (under development at the federal level).
• Enhancing the ADAP interface with state Medicaid programs represents an additional opportunity and challenge. There is increased pressure to assure that ADAP represents the payer of last resort and that Medicaid programs are not inappropriately limiting prescription drug coverage. Limitations on Medicaid drug coverage — where states place a monthly cap on per client prescriptions — applies increased pressure on financially strained ADAPs to pick up the burden of paying drugs for underinsured Medicaid-eligible populations.
• Many states are exploring other innovative strategies for broadening access to HIV/AIDS therapies such as health insurance continuity programs and purchasing insurance through state risk pools. Paying health insurance premiums that provide access to care and medications can, in many cases, be more cost effective for states than covering expenses directly under ADAP or Medicaid. For states such as Minnesota and Oregon, insurance purchasing and continuity programs represent the bulk of their efforts to provide access to medications for low-income people living with HIV/AIDS. These and other initiatives may narrow the gap that state ADAPs would need to fill to provide uninterrupted medication coverage for eligible individuals with HIV/AIDS.

Footnotes

¹ Section 602 of the Veteran’s Health Care Act stipulates that state ADAPs, along with certain other federally-funded programs, can purchase covered drugs at discounted prices. The discount rate available to ADAPs under the 602 program is equal to the rebate amount that manufacturers are mandated to pay to state Medicaid programs.

² Schur, C.L., and Berk, M.L.: Health Insurance Coverage of Persons With HIV-Related Illness: Data From the ACSUS Screener. AIDS Cost and Services Utilization Survey (ACSUS) Report, No. 2. AHCPR Pub. No. 94-0009. Rockville, MD: Agency for Health Care Policy and Research, 1994.

³ Moore, R.D. and Bartlett, J.G.: Combination Antiretroviral Therapy in HIV Infection: An Economic Perspective. PharmacoEconomics, 1996, Aug: 10(2): 109-113.

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State AIDS Drug Assistance Programs: A National Status Report on Access:Press Release Report Part One Part Two State Data

This paper suggests methods of financing managed care for people with HIV or AIDS.

Note: This publication is no longer in circulation. However, a few copies may still exist in the Foundation’s internal library that could be xeroxed. Please email order@kff.org if you would like to pursue this option.

This report provides information on key budgetary facts and trends and highlights federal spending in health care programs. It includes an overview of federal revenues and spending in fiscal year 1995, an overview of the budget “window” from fiscal year1996 through fiscal year 2002, and the historical context for the budget debate, from fiscal 1973 through fiscal year 2002.

• Chartbook: Primer on the Federal Budget

This side-by-side provides a comparison of Medicare current law with selected House and Senate provisions to the Balanced Budget Act of 1997.

• Report
• Report

State Responses to New Federal Health Programs

• Report: State Responses To New Federal Health Programs

Protection in Managed Care Plans: A Side-by-Side Comparison of Proposed Federal Legislation. A side-by-side comparison of the provisions for consumer protection in managed care plans contained in the House and Senate budget reconciliation bills and in eight other consumer protection bills currently under consideration by Congress. These bills, which would increase the regulatory oversight of the managed care industry by the federal government, are compared in 22 different categories of managed care issues.

• Report
• Report

Children’s Health Insurance: 1997 Budget Reconciliation Provisions

A side by side of children’s health insurance budget reconciliation provisions comparing House and Senate bills as of 07/09/97.

• Report
• Report

Side-By-Side Comparison Of Proposed Federal Legislation For Consumer Protection In Managed Care Plans

Nicole Tapay, Karen Pollitz, Jalena Curtis

Institute for Health Care Research and Policy Georgetown University Medical Center

July 18, 1997

Issue Summary

Over the past decade, an increasing number of Americans have been receiving their health care coverage through HMOs, PPOs and other types of managed care entities. The growing influence of managed care, in turn, has led consumers and state and federal policy makers to raise questions about the appropriate roles and rights of consumers, providers, employers, purchasers, and insurers within this system. Areas of concern include: 1) whether plans provide sufficient access and choice for consumers; 2) what is the appropriate method to enable consumers to appeal plan decisions; and 3) what rights consumers have with respect to information about their health plans.

Most states have basic protections in place regulating HMOs and managed care plans that are subject to state law. In addition, there has been a surge of recent state legislative activity in this area which has augmented the sophistication and specificity of some of these laws. At the federal level, Medicare currently imposes certain requirements upon managed care plans contracting with the program. Federal standards for Medicaid managed care have been somewhat more general; as states move toward requiring managed care enrollment, federal legislation has been proposed to strengthen protections for Medicaid beneficiaries. Also at the federal level, ERISA, which governs self-funded employer plans, contains minimal requirements for such plans and virtually no protections specifically targeted at the managed care components of such plans.

In the 105th Congress, several bills of varying scope have been introduced to address an array of concerns relating to consumer and provider protections in health plans. In addition, Congressional Budget Reconciliation Bills suggest several changes in this area for Medicare and Medicaid. This document is a side-by-side comparison of many of the leading federal bills in these areas. It begins with the following brief description of the bills contained in the side-by-side comparison tables. The Medicare and Medicaid provisions of the House and Senate Budget Reconciliation Bills (House and Senate Budget Bills) are presented in Part I. The eight remaining bills discussed below, introduced in the House and/or Senate, are presented by topic in Part II.

Please note: This document includes certain acronyms; many of these are defined in the “Definitions” section at the end of the document.

H.R. 2015–House Budget Bill/Provisions Relating To Medicare Managed Care

The House Budget Bill would establish a new Medicare managed care program, MedicarePlus. Plan options include a variety of coordinated care plans. Importantly, this option does not preclude Medicare eligibles from choosing the traditional fee-for-service Medicare program. The House Budget Bill includes requirements relating to information disclosure, gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, provider protection, solvency standards for provider-sponsored organizations, and enforcement issues.

The House Budget Bill requires plans to disclose specified information to federal authorities and enrollees. It also includes a grievance/appeals system with internal and external mechanisms, including time limits and reviewer requirements for all grievances and appeals. Time frames are established for prior authorization determinations. Minimum requirements are established for internal quality assurance. The House Budget Bill requires plans to provide access to providers in service area within a reasonable time frame and to cover appropriate specialist treatment.

The House Budget Bill sets forth a process for provider-sponsored organizations (PSOs) to receive federal waivers from state laws that fall within specified categories. Solvency standards for PSOs will be set at the federal level. The House Budget Bill also sets forth open enrollment and information requirements to facilitate beneficiary choice and mobility among Medicare options.

Status: Passed by the House on June 25, 1997, and awaiting action by reconciliation conference committee. The House Budget Bill incorporates two separate proposals for Medicare, as passed by the committees of jurisdiction (Commerce and Ways and Means) with some slight variations.

S. 947–Senate Budget Bill/Provisions Relating To Medicare Managed Care

The Senate Budget Bill would establish a new Medicare managed care program, Medicare Choice. In general, the Senate Budget Bill is very similar to the House Budget Bill, with differences highlighted within the attached side-by-side chart. Plan options include a variety of coordinated care plans; Medicare eligibles can still choose the traditional fee-for-service program. The Senate Budget Bill includes requirements relating to information disclosure, gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, provider protection, solvency standards for provider-sponsored organizations, and enforcement issues.

The Senate Budget Bill requires plans to disclose specified information to federal authorities and enrollees. It also includes a grievance/appeals system with internal and external mechanisms, including time limits for all grievances and appeals and limited reviewer requirements. Time frames are established for prior authorization determinations. Minimum requirements are established for internal quality assurance. The Senate Budget Bill requires plans to provide access to providers in their service areas within a reasonable time frame and to cover appropriate specialist treatment.

The Senate Budget Bill sets forth a process for provider-sponsored organizations (PSOs) to receive waivers from state laws. Solvency standards for PSOs will be set at the federal level. The Senate Budget Bill also sets forth open enrollment and information requirements to facilitate beneficiary choice and mobility among Medicare options.

Status: Passed by the Senate on June 26, 1997, and awaiting action by reconciliation conference committee.

H.R. 2015–House Budget Bill/Provisions Relating To Medicaid Managed Care

The House Budget Bill incorporates selected consumer protection standards for Medicaid managed care enrollees. The House Budget Bill includes requirements relating to gag rules, grievance procedures, quality assurance, access to care, access to specialists, emergency services, and continuity of care. It requires plans to permit female enrollees access, without prior authorization, to obstetricians/gynecologists for routine care and to designate such physicians as their primary care providers. It requires plans to establish internal grievance procedures that meet federal standards, including timeliness of considerations. It requires plans to follow quality standards. The House Budget Bill also prohibits restrictions on medical communications between providers and patients.

Status: Passed by the House on June 25, 1997, and awaiting action by reconciliation conference committee.

S. 947–Senate Budget Bill/Provisions Relating To Medicaid Managed Care

The Senate Budget Bill sets forth protections for Medicaid beneficiaries enrolled in managed care plans. The Senate Budget Bill includes requirements relating to information disclosure, grievance procedures, quality assurance, utilization review, access to care, access to specialists, emergency services, protections relating to covered benefits, discrimination, continuity of care, and enforcement issues. It permits states to mandate enrollment in a managed care plan as a condition of receiving Medicaid coverage. Beneficiaries generally must be given a choice of at least two plans, though states may waive this rule in rural areas under certain circumstances. States may not mandate managed care enrollment for certain, more vulnerable Medicaid beneficiaries. The Senate Budget Bill establishes standards relating to information disclosure, access to care, access to specialists, and access to emergency services. It requires plans to establish grievance procedures, sets a general requirement of timeliness for prior authorization systems, and provides for quality assurance standards. It prohibits balance billing by plan contractors and subcontractors. It establishes standards for financial soundness of Medicaid managed care plans, and authorizes the Secretary to apply new sanctions against plans that do not comply with the Senate Budget Bill’s requirements.

Status: Passed by the Senate on June 26, 1997, and awaiting action by reconciliation conference committee.

S. 644–D’Amato/H.R. 1415–Norwood

This bill establishes consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, experimental therapies, provider protection, discrimination, minimum solvency, and enforcement issues. The bill requires plans to disclose specified information to enrollees, prospective enrollees, health professionals, and providers. Time limits and restrictions on reviewer qualifications are established for internal review of grievances and appeals; time limits are also specified for UR prior authorization determinations. The bill mandates internal quality improvement programs with specified components. Enrollees must have access to specialized treatment when necessary, and must receive continued coverage when provider changes could disrupt continuity of care. Plans must offer point-of-service options with fair and reasonable premiums. Emergency services must be covered and must be accessible at all times. States may impose more stringent requirements than those specified in the bill.

Status: Hearings were held in the Committee on Labor and Human Resources in May 1997. No committee or legislative actions have been taken; provisions similar to portions of this bill have been incorporated into the House and Senate Budget Bills. The House companion bill to S. 644 is H.R. 1415 (Norwood).

S. 373–Kennedy/ H.R. 820–Dingell

This bill sets forth consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, quality assurance, access to care, access to specialists, emergency services, continuity of care, privacy, experimental therapies, provider protection, and enforcement issues. The bill requires plans to disclose specified information, updated monthly, to state authorities, enrollees, and the public. The bill also outlines a grievance/appeals system with internal and external mechanisms, including time limits and reviewer requirements for all grievances/appeals. Time frames are also established for UR prior authorization determinations. Minimum requirements for internal quality assurance are established, including a minimum uniform data set to be specified by the Secretary. The bill requires plans to cover treatment by specialists, and requires continuity of care for specified periods after providers are no longer participating. If emergency services are covered benefits, standards are set forth for coverage without prior authorization and without regard to whether the provider is participating. To assist consumers with coverage choice, filing complaints, and to investigate instances of poor treatment of enrollees, the bill requires the establishment of state health insurance Ombudsmen. States are permitted to impose more stringent requirements on plans than those outlined in the bill.

Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken. A similar bill to S. 373 has been introduced in the House, H.R. 820 (Dingell). Unlike S. 373, H.R. 820 does not amend ERISA.

S. 346–Wellstone

This bill sets forth consumer protection standards for managed care plans, both insured and self-insured. Standards address information disclosure, gag rules, grievance procedures, utilization review, access to care, access to specialists, emergency services, privacy, provider protection, discrimination, minimum solvency, and enforcement issues. The bill requires plans to disclose specified information in standardized form to prospective covered individuals and UR information to state officials. The bill also establishes guidelines for internal, external/independent, and expedited reviews of grievances, which are to be further developed through federal regulation. Requirements for mandatory UR programs are described, and additional standards are to be developed for certification of UR programs. The bill sets forth standards for provider credentialing, and requires states to develop uniform credentialing requirements. “Meaningful” access to specialist treatment is required, and enrollees with chronic conditions must receive ongoing direct access to specialists as appropriate. Emergency services must be covered and must be accessible at all times. States are to establish Offices for Consumer Information, Counseling and Assistance with Health Care to educate and assist consumers with health insurance issues. States may pass laws with equal effect or stricter requirements than those in the bill.

Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken.

S. 864–Chafee/Breaux

This bill sets forth protections for Medicaid beneficiaries enrolled in managed care plans. The bill permits states to mandate enrollment in a managed care plan as a condition of receiving Medicaid coverage. Beneficiaries generally must be given a choice of at least two plans, though states may waive this rule in rural areas under certain circumstances. States may not mandate managed care enrollment for certain, more vulnerable Medicaid beneficiaries. The bill establishes standards relating to information disclosure, access to care, access to specialists, and access to emergency services. It establishes specific standards for access to care provided by Ob-Gyns for women and care by specialists for patient with chronic conditions. The bill requires plans to establish grievance procedures, sets a general requirement of timeliness for prior authorization systems, and provides for external review of enrollee grievances and of quality assurance standards. It prohibits balance billing and restrictions on medical communications between providers and patients. It establishes standards for financial soundness of Medicaid managed care plans, and authorizes the Secretary to apply new sanctions against plans that do not comply with the bill’s requirements.

Status: Some portions of this bill appear in the Senate Budget Bill, and others appear in the House Budget Bill.

H.R. 586–Ganske

This bill establishes consumer protection standards in the area of medical communications for group and individual insurers, including group health plans. Standards address gag rules and enforcement issues. Although a similar bill, S. 449 (Kyl/Wyden), is not included as a separate bill in the side-by-side, the description of H.R. 586 highlights the main difference between H.R. 586 and S. 449. Both S. 449 and H.R. 586 prohibit plan restrictions on medical communications and establish monetary penalties for violation of this rule. In addition, H.R. 586 provides that while plans may not restrict such communications, entities operating plans may place limitations on services offered based on religious or moral convictions. S. 449 includes a somewhat different “conscience clause.”

Status: During the 104th Congress, hearings on this bill were held by the Health Subcommittee of the House Committee on Ways and Means. In addition, the Health and Environment Subcommittee of the House Commerce Committee also held a hearing which focused on the issue of gag rules in managed care plans and whether legislation was necessary to address the issue. In July 1996, the full Commerce Committee met in open markup session and ordered the bill reported to the House, as amended, by a voice vote. No further action was taken. During the 105th Congress, portions of this bill have been incorporated within the House Budget Reconciliation Bill. See above.

H.R. 815–Cardin

This bill establishes consumer protection standards in limited areas for group and individual insurers, group health plans, Medicare (HMOs and competitive medical plans), Medicaid, and Medicare Select plans. Standards address emergency services, information disclosure, and enforcement issues. The bill sets forth standards for coverage of emergency services without prior authorization and without regard to whether providers are participating. Time limits are established for authorization of post-stabilization care. States may establish standards relating to emergency services to the extent they do not prevent the application of requirements in the bill.

Status: No legislative or committee action. Similar provisions are incorporated within the House and Senate Budget Bills, as well as within S. 644, S. 373, and S. 346.

H.R.135–DeLauro

This bill establishes consumer protection standards in limited areas for group and individual insurers, including group health plans. Standards address protections relating to covered benefits, provider protection, and discrimination as they relate to treatment of breast cancer. The bill establishes minimum length of stay requirements for mastectomies and lymph node dissections for treatment of breast cancer if these services are covered benefits. In addition, the bill prohibits financial incentives to providers and enrollees for purposes of avoiding these requirements; however, doctors in conjunction with patients may decide upon shorter lengths of stay. States may pass laws requiring at least the same length of stay or requiring that length of stay decisions be left to doctors in consultation with patients.

Status: No legislative or committee action.

S. 795–Jeffords/Lieberman

This bill establishes consumer protection standards for federal health plan contractors, including the Federal Employees Health Benefits Program, Medicare, Medicaid, TRICARE, and Veterans Affairs. Standards developed pursuant to the bill address information disclosure, grievance procedures, quality assurance, and enforcement. The bill requires plans to disclose specified information in standardized form to prospective enrollees. The bill also establishes a Federal Health Plan Quality Council to evaluate plans, direct government participation in regional health care accountability initiatives, and advise the President and Congress on consumer protection and quality of participants’ health care. The Council must establish criteria for mandatory certification of plans by licensed certification entities, with minimum criteria requirements specified in the bill. The Council will pay plans to reward them for meeting or exceeding quality targets; to fund this program, all plans must allocate annual payments to the Council.

Status: Hearings on the subject of health care quality in commercial and public plans have been held by the Senate Labor and Human Resources Committee and the Senate Finance committee. No hearings have yet been held on this particular bill, nor has committee or legislative action been taken.

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Side-By-Side Comparison Of Proposed Federal Legislation For Consumer Protection In Managed Care Plans:

Side-By-Side Part One Part Two Part Three Part Four