With Smart Policies, Elimination of Hepatitis C Within Reach for California

Jason Sterne, Lauren Canary, and Brian Kennedy
Jason Sterne is the Chief Operating Officer of the Hepatitis Education Project, Lauren Canary is the Director of the National Viral Hepatitis Roundtable, and Brian Kennedy is the Executive Director of the Alliance for Patient Access.

Advances in treatment and competition among manufacturers that has resulted in lower costs have brought a once-unthinkable goal into focus in California – effectively eliminating the hepatitis c virus (HCV) in the Golden State. However, a current Medi-Cal policy is impacting patient access to HCV cures and could be driving up the costs to the state.

An estimated 629,000 Californians are living with HCV today, the deadliest infectious disease in the United States. Unlike other major diseases that are in decline, new infections rates of HCV are actually increasing. In the last several years alone, hepatitis C diagnoses have more than doubled among young adults in California. The health effects associated with HCV are serious and can be deadly for individuals who go untreated. Fortunately, California acted swiftly to address this health crisis, including to reduce restrictions that used to prevent Medi-Cal patients from receiving treatment.

Along with this progress, however, an unintended consequence has arisen. This issue is not overly complex. Since 2015, Medi-Cal has allocated to its managed care organizations (MCOs) a supplemental payment for patients that are treated with the new HCV cures. Since its inception, and in its current 2019 iteration, the supplemental payment methodology has directed that “a monthly supplemental capitation payment will be disbursed based on a weekly rate.” For 2019, the weekly rate is $3,785.

When the supplemental payment methodology was originally designed, all the new HCV therapies were on a standard twelve-week regimen, so a weekly rate made sense and would not have any impact on treatment decision-making or patient access to any approved therapy. That is no longer the case. Now, approved therapies range from an eight-week regimen to a twelve-week regimen. Given a weekly rate of $3,785, that means there could be a $15,140 difference in supplemental payments given between the various cures based solely on the number of weeks administered.

Simply put, this makes no sense from either a medical or fiscal standpoint.

This large gap between supplemental payments for various therapies places financial pressure on Medi-Cal managed care organizations to drive towards cures with a longer therapy regimen simply because the reimbursement is based on the number of weeks of treatment. This fiscal pressure could result in access issues and potentially influence treatment decisions that should be made individually by physicians and their patients. As a practical fiscal matter, it certainly would not seem to make sense to create a $15,000+ incentive to cover one cure over any other.

To be clear, this is not about an individual treatment. In fact, quite the opposite. Government policies, such as the supplemental payment, should be therapy neutral. We support the notion of “therapy parity” when it comes to governmental policies. The decision of which specific therapy is appropriate for any patient is a highly individualized decision and should be made between the patient and physician without undue pressure or influence. 

With a smart and effective policy approach, the elimination of the hepatitis C virus is within reach in California. We urge the Department of Health Care Services to review and update its outdated reimbursement policy to reflect the current reality for hepatitis C treatments. The result could be a win-win-win: increased patient access to cures, preservation of physician-patient decision-making, and lower costs for California taxpayers.

 

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