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Evil Health Insurance Tactics

Posted 05/24/2011

Time for another appalling health insurance story. Today we’ll discuss an invention of theirs called Step Therapy, allegedly created “for your safety and to control health care costs.” It won’t surprise you that its real purpose is to generate massive revenues for their bottom line. Unfortunately, you, the patient, virtually always suffer unnecessarily in the process.

Doctors call Step Therapy the “fail first” policy. Let me explain. Step Therapy actually requires that before an insurer will authorize reimbursement for a medication your physician thinks will help you, your doc must document that he or she has first recommended other medications (either over-the-counter meds or cheap generics) from a health insurance industry-generated “approved list,” that they’ve been prescribed to you, and that they failed.

You can see why doctors call it fail first.

To give you an idea how appalling Step Therapy is for patients, the California legislature is in the process of banning the practice outright. You can believe the protests from the health insurance industry have been self-righteous and loud.

Here’s an example of how it all works. Let’s say you have fibromyalgia and I wish to write you a prescription for Savella, a brand-name drug that is FDA-approved for fibro. When you go to fill your prescription, if your insurer has Step Therapy in place, your pharmacist gets a “denial: prior authorization needed” notice from your insurer. The pharmacist then faxes this denial information to me. On it is an 800 number for me to call. After a series of deliberately annoying delay tactics (in order to discourage my writing this prescription in the future), I’m sent a list of medications I have to prescribe for you before they will authorize Savella.

Amazingly (or not so amazingly perhaps), some of the meds I am being forced to prescribe first are not even FDA-approved for fibromyalgia. If you had an adverse effect from one of them, in theory you could file a malpractice suit against me for prescribing an unapproved drug (I’m hopeful you wouldn’t). And yes, insurance companies know this but it doesn’t seem to faze them.

Generally the health insurer’s list of “approved” drugs contains inexpensive losers. I already know from first-hand experience that most of these drugs won’t work. Nevertheless, I’m compelled to write you prescriptions for two or more of them and you are required to fill the prescriptions before you can receive your Savella, the drug that in my judgment is most likely to help you. The insurance company hopes you’ll try the first of their cheaper approved drugs for a month or two, maybe feel a little better, and remain on it. If you return to me and report that the first medicine didn’t work, I have to prescribe you the second loser drug from their list.

For your insurer, a good scenario is that you’d get so discouraged by this whole process that you’d never bother to return for the Savella. Even better for the health insurer, you’d get laid off and lose your health insurance altogether (health insurers loathe fibromyalgia patients).

There is no requirement, however, that you have to swallow the insurer’s loser meds. Nor is a full month required between each to get all three prescriptions filled. Simply filling your first ineffective prescription enters you into the pharmacy computer system as having tried it. You can return the very next day, report the first drug gave you a headache, fill the second, and ditto come up with a reason it didn’t work. Then, on the third day, when you bring in your Savella prescription, the pharmacist can press “yes” when the denial question pops up (“Have any of the following medications been tried first?”) and by doing so your health insurer will cover the Savella.

Now when health insurance information systems started noticing people filling three prescriptions over three successive days, insurers smelled a trick. To counter this, they’ve recently added yet another form, two pages long and very detailed. It’s not their form, actually, but one from the FDA entitled “Mandatory Reporting of Unexpected Side Effects.” In a cover letter accompanying this form, the insurer warns, “For the safety of your patient, we will not authorize your prescription until you have completed this form and sent it to the FDA.”

It’s yet another step to trip us up in their profitable Step Therapy ploy, another delaying tactic to keep you from getting the medication I originally prescribed. They’re keeping their greedy fingers crossed that, finally pushed to the edge like this, frustrated physicians will throw up their hands and shout “I promise I will never ever prescribe this drug again!”

Actually, insurers know this sort of mandatory FDA reporting is utter nonsense. Doctors are required to report a drug side effect only if that side effect has never been reported by patients in the past, an event that almost never occurs. Standard side effects, like upset stomach, do not require FDA reporting. So doctors are now simply checking “yes” to the question on the pharmacy form “Did you report the side effect to the FDA?” and tossing the uncompleted FDA form into their shredders. By checking the “yes” box, the health insurance computers release your drug. Not having access to the FDA computer systems (yet!), the insurer has no way of knowing if the form was ever completed by the physician.

Sadly, your kindly pharmacist is likely in cahoots with all this. Few patients are aware that pharmacists receive a financial “incentive” (Chicagoans may be more familiar with the term kickback) every time they helpfully attempt to convert your more expensive brand-name drug to a cheaper, and possibly less effective, generic version.

Parenthetically, patients ask me all the time if generics are as good as name-brand  versions. The answer is a straightforward “Generally, yes. Sometimes, no.” Certainly patients have reported lying awake at night waiting for sleep from their generic Ambien, felt anxious despite their generic Xanax, and wait uselessly for their migraine to clear with generic Imitrex. Branded drugs have been clinically tested on real people. Generic manufacturers need only complete a document saying the drug they’re producing is the same as the branded one. No clinical testing is required, and that’s why they’re so cheap. Most generic manufacturers are excellent–others, well, you never know.

The point of Step Therapy is not simply brand-drug-versus-generic, but rather your accessibility to new drugs versus being limited to older and often ineffective ones. In the field of clinical pharmacology, old is virtually never better.

If this all chicanery on the part of the insurance industry sounds like it should be illegal, with luck sometime in the next few weeks it will be in California, and in the next few years everywhere else as well. In the meantime, for your own sake…

Be well,

David Edelberg, MD

Leave a Comment

  1. Carol Ring says:

    I’m so tired of the profit motive of insurance companies and drug companies. They are working to destroy the health of Americans. Politicians go along with this because of their attachments to lobbyists and campaign contributions. Whatever happened to morality, ethics, responsibility or caring?

  2. Bonnie Schnetzler says:

    Thank you. I don’t know how you find time to be the doctor you are, given how much time you devote to issues like this. You’re the epitome of the doctor that everyone deserves to have.

  3. Lauren Mieli says:

    …and this is why PREVENTION is the best medicine. Dr. Edelberg, your practice has changed my life. Your nutritionist, Marla Feingold taught me what foods my body likes and doesn’t like and by following those guidelines – many ailments either disappeared or are minor not requiring meds! Our food supply is poisoned by chemicals and processing. That’s why we are so sick and fat.
    Thx for your fresh approach to medicine!

  4. Addie says:

    Insurance companies have lawyers, business advisors, more capital than we can imagine, and it’s “good business” to find a million ways to make money at eveyone else’s expense. They will continue to amaze and confound us with their schemes. It’s what they do for a living. That’s why we need a single payer national system. There’s no better argument for single payer than the insurance companies themselves.

  5. Cyndi driver says:

    I have several things to add about generics. Generic medications have standards to meet than just checking a form saying they are the same as the name brand. They have to have the same “working” medication with the same amounts, within very narrow margins of error. They may have a different inactive ingredient in them. I’ve never had a problem taking a generic that I know of. I have been abruptly removed from a name brand, ie. Baycol. Sometimes I think a new drug may still have problems to be worked out. I’m curious- I take Lycica for fibromyalgia and it seems to help. Why are you pro Savella? What makes it better? And finally, my daughter and son-in-law are physicians at Mayo in Minnesota. Mayo really tries to use generics for their patients if they can. I can’t imagine they would prescribe ineffective medication for patients to take at home. I think that would give them a bad reputation. Your letter just confused me. Please help me understand. Thank you.

  6. Bob Gosdick says:

    Gee, this sounds like my recent DioVan/HCT experience – the generic that doesn’t work . Lucky for me there were alternatives that still allow me to acquire the desired drug.

  7. Dr E says:

    To Cyndi
    I didn’t mean to sound particularly pro-Savella in this piece. I was using it as an example of what I have to go through when I write a new medication. I have to jump through the same hoops when I write Lyrica (which I do use for fibro).
    Concerning generics in general. Most work just fine and I use them regularly in my practice. However, if a patient reports to me that the generic “doesn’t seem to be working as well,” I really can’t dismiss the patient as neurotic. People metabolize medications in different ways and a generic that works fine for one patient may be less than effective in another.
    Mayo Clinic physicians do what physicians all over are doing, namely writing generics whenever possible. However, doctors at Mayo are not primary care physicians, and they don’t follow up on the patients that they have evaluated and returned to the original primary care physician. If a Mayo doctor writes a generic Ambien, for example, he’ll never know the generic may not be working. It will be the primary care physician who hears about it.

  8. Andrea Holliday says:

    Hadnt heard of this one yet. Go Dr E!!
    I recommend your blog to everyone

  9. Ré Harris says:

    As an uninsured woman with a healthy fear of becoming sick, I’m appalled and angry about all the ‘profit before ethics’ in the insurance industry, and the sad disregard our society has for illness prevention overall. If our society really valued health, there wouldn’t be so many politicians in office who legislate as though they hate the ‘unlucky’ –those who can’t find decent jobs, much less full time jobs.

  10. Joanne Boylan says:

    Thank you Dr E for bringing this to our attention. What a waste of money and time for both patient and doctor. Actually just returned to the pharmacy a generic drug, which I knew didn’t work like the brand and the pharmacist was quick to point out that it would cost me a lot more. I told him I didn’t care because the generic doesn’t work! Now I know why he was trying to get me to keep the generic! Thanks for all the updates and information!

  11. Jeanne Vaver says:

    Dr. Edelberg – every time we get a newsletter from you I want to sit down and thank you for your time and effort in sharing this inside information with us. We always learn something, and are entertained, to boot!
    So – here’s a thank-you that can be multiplied for every letter in the archives.
    Jeanne (as in RWR library)

  12. Cyndi driver says:

    Thank you Dr. E for the response. I always look forward to your newsletters.

  13. Judy Kayser says:

    Wow, what a despicable, unethical way to do business, not to mention the frustration for and power over those who need these drugs.

  14. Jude Mathews says:

    Having had countless hours of direct experience handling my family’s insurance claims while attempting to get my insurance company to cough up its part of what is owed, it literally makes me sick now, reading about tactics I hadn’t yet been treated to. No, Dr. E, DON’T stop writing just because I get a stomach ache hearing about the latest insurance company scheme. I brag about you all the time and send your articles to my friends.
    A significant portion of my life these days revolves around health insurance: Can I afford it? What forms and phone calls are on the docket today? Can I make a deal with the collection agency that gets my as-yet-unresolved bills? And so on. As to the machinery that creates all these worries, it feels like we’re no longer living in anything like a democracy. When do the less fortunate 90% of our population get what they need in the way of healthcare, and why is it really about big profits instead of our wellbeing? If I could move to Canada, I’d do it in a second.

  15. Linda Sauer says:

    Thanks for another great article. I would like to share this on my Facebook wall. My insurance company is sending me brand name on 90 day refills the FIRST time I get the medication but then they swap it to GENERIC on the SECOND refill even though the RX says do not substitute. So far, they’ve done this with Imitrex and Ambien CR. Ambien CR is made by Anchen for the 12.5mg dose and Actavis is making the 6.25mg, with Prasco as the authorized generic (AG) for both. Awful stuff that does not work.

  16. Beth says:

    To Cyndi, I’m just seeing this article so please excuse the late response. There are generics that many doctors just won’t prescribe. Just a few examples: Most thyroid experts counsel their patients to never get the generic for synthroid–it’s been shown repeatedly to have inconsistent amounts of the key ingredient. And when I had shingles, my doctor insisted that I get the brand because he said none of the generics (there are more than one) work as well as the brand. I became very ill with the generic of an ulcer med, and when switched to brand, my side effects were gone within a day. Those varying inactive ingredients can make a big difference. As far as Mayo is concerned, I’m in the medical industry and most hospitals routinely give generics, unlike some doctors’ offices.

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Far and away, the commonest phone call/e mail I receive asks about COVID-19 diagnosis.
Just print this out, tape it on your refrigerator door, and stay calm.


• Runny nose
• Sneezing
• Red, swollen eyes
• Itchy eyes and nose
• Tickly throat
• No fever

• Runny nose
• Sneezing
• Sore throat
• Mild muscle aches
• Mild dry cough
• Rarely a low fever

• Painful sore throat
• Hurts to swallow
• Swollen glands in neck
• Fever

FLU (Standard seasonal flu)
• Fever
• Dry cough (no mucus)
• Sudden onset over few hours
• Headache
• Sore throat
• Fatigue, sometimes quite severe
• Muscle aches, sometimes quite severe
• Rarely, diarrhea

• Shortness of breath
• Fever (usually above 100 degrees)
• Dry cough (no mucus)
• Slow onset (2-14 days)
• Mild muscle aches
• Mild fatigue
• Mild sneezing

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