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Read Making a Killing

home / healthcare / in the media

The San Francisco Chronicle
Jul 11, 2001

by Bob Egelko

Viagra coverage left up to Kaiser

Judge's ruling may give HMO more power over formulating its prescription drug plan
The state can't require Kaiser health plans to cover Viagra, a Sacramento judge said, in a ruling that could ultimately give health maintenance organizations considerable more authority over their prescription drug plans.

If upheld on appeal, the decision by Superior Court Judge Lloyd Connelly would not merely eliminate potency and sexual-dysfunction drugs from HMO plans, but could affect a wide range of prescription treatments.

With specified exceptions, the Legislature has left the scope of prescription drug benefits "to the fiscal and administrative management of health care service plans," Connelly wrote last Friday.

Those exceptions are pain medication for the terminally ill; diabetes medicines; contraceptives; and "off-label" drugs, or those that have been approved by the government for one purpose and are being prescribed by a doctor to treat a different life-threatening or serious condition.

The appellate court last week bolstered the contraceptive requirement, which was added a year ago, when it ordered Catholic Charities to continue providing birth control pills and devices to employees as part of its prescription coverage.

Apart from those exceptions, Connelly said, the law does not prohibit HMOs from "excluding prescription drugs for the treatment of a particular medical condition such as sexual dysfunction."

Steven Fisher, spokesman for the state Department of Managed Care, said no decision had been made yet on an appeal. Connelly's ruling applies only to the state's regulation of Kaiser and is not binding on judges in cases involving other plans.

California health regulators required HMO prescription plans to cover Viagra after the U.S. Food and Drug Administration approved it for treatment of male impotency in 1998. Under the rules, HMOs paid for half the cost of a monthly supply of eight pills.

At least seven health plans sought permission to drop Viagra; Kaiser, the state's largest HMO with 6.2 million members, was the first to go to court.

The same issue has arisen in more than a dozen other states, and only two, New York and Connecticut, have required HMOs to provide Viagra, Kaiser attorney Anthony Barrueta said yesterday. Kaiser no longer operates in those two states, he said.

Barrueta said Kaiser had decided that drugs for sexual dysfunction should be paid for only by those who needed or wanted them, rather than by everyone in the health plan through a small increase in premiums.

He said health plans generally excluded medications used for cosmetic or lifestyle reasons. Drugs like Viagra are a special case because a patient may have a medical need or a personal preference. Kaiser excludes coverage for any reason under its basic plan but allows large employers to purchase optional Viagra coverage for an additional premium, he said.

Health care activist Jamie Court criticized the ruling, saying neutral regulators, not a self-serving industry, should decide issues of medical necessity. He predicted Kaiser's successful lawsuit would backfire when HMOs go before Congress next week to argue for protection against lawsuits under the proposed patients' bill of rights.

"HMOs claim that regulators provide enough oversight, but when a regulator issues a decision they don't like, they go crying to a judge," said Court, executive director of the Foundation for Taxpayer and Consumer Rights in Santa Monica. "That's an appeal right that HMO patients don't have."

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