Kaiser settles with State of California
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State Closes Investigation of Kaiser's Prescription Practices
Plan Takes Remedial Steps, Pays $250,000
SACRAMENTO, Calif.--(BW HealthWire)--Dec. 28, 1998--Dale E. Bonner, Commissioner of the Department of Corporations, today announced that the department reached an agreement with Kaiser Foundation Health Plan bringing a close to the state's investigation of Kaiser's prescription policies and coverage decisions for the prescription drug Viagra, approved by the U.S. Food and Drug Administration (FDA) in April this year for treatment of erectile dysfunction.
''Perhaps most fundamental to consumer protection is the requirement that doctors be able to make medical decisions unhindered by a health plan's fiscal concerns,'' said Commissioner Bonner.
The department opened an investigation in June of this year after learning of Kaiser's public comments and other evidence suggesting the plan may have been allowing fiscal and administrative considerations to unduly influence medical decision making.
The investigation centered on Kaiser's prescription practices for Viagra during the five-month period from April to September 1998. During the probe, investigators took sworn testimony from Kaiser officials and reviewed thousands of documents produced pursuant to investigative subpoenas.
Kaiser, like other HMOs, maintains a list of approved drugs called a formulary. A health plan must pay for drugs, which are on its formulary and prescribed by plan physicians. In addition, a plan must pay for non-formulary drugs, which are medically necessary.
In April of this year, when the FDA approved Viagra as a treatment for male sexual dysfunction, the drug was not initially placed on Kaiser's formulary. In mid-September, Kaiser's Pharmaceutical and Therapeutics Committee approved Viagra as a safe, appropriate, and cost-effective treatment for male erectile dysfunction and put the drug on the plan formulary.
The department's investigation disclosed that certain management decisions during this period may have discouraged physicians from writing Viagra prescriptions in a manner requiring Kaiser to pay for it. As a result of the department's investigation, Kaiser has agreed to:
-- Resolve all currently pending member grievances related to the
coverage of Viagra;
-- Inform its members of its coverage policy regarding prescription
drugs for sexual dysfunction before April 1, 1999;
-- Before Feb. 15, 1999, inform each of its members that received a
prescription for Viagra that was filled by the plan's pharmacy
during the period of April 8, 1998 through Sept. 21, 1998 (the
period from the time Viagra was approved by the FDA until the
drug was added to the plan's formulary) about Kaiser's current
policy regarding prescription drugs for the treatment of sexual
dysfunction and to resolve any grievances that result;
-- Maintain Viagra as a covered drug on its prescription drug
formulary unless, in the normal course, it would be removed from
the formulary; and,
-- Pay the state the sum of $250,000, part of which covers the
department's costs associated with the investigation.
''Health plans and consumers can expect the state will be more proactive and systematic in its enforcement of the laws designed to protect health care consumers. This aggressive approach is critical when it comes to prescription drug benefits as HMOs wrestle with rising drug costs, the rapid emergence of new 'wonder drugs' and new FDA rules that allow marketing directly to the public,'' said Bonner.
''I have directed the Health Plan Division and the Health Plan Enforcement Division to develop an aggressive plan to keep these issues at the top of the department's agenda. All HMOs should consider themselves on notice that the state will bring increasing scrutiny to this critical area in the days and months ahead.''
Today's announcement relates to one of two matters the department has been reviewing relative to Kaiser's handling of Viagra. In May 1998, Kaiser submitted for the department's review and approval proposed language to exclude coverage for the treatment of sexual dysfunction. The regulatory filing seeking approval to exclude coverage for Viagra is a separate matter that remains under review. |
