Understanding Insurance Coverage and Managing Treatment Access Icon

Understanding Insurance Coverage and Managing Treatment Access

Insurance Coverage and JAK Inhibitors

Note: This information is about commercial insurance, not federal programs like Medicare. It also covers patient assistance programs from drug manufacturers. 

Since 2022, the FDA has approved three drugs for severe alopecia areata. These approved drugs are all JAK inhibitors. They are: Olumiant® (baricitinib), Litfulo® (ritlecitinib), and Leqselvi® (deuruxolitinib).

Even though a drug is approved by the FDA, it might not be covered by your insurance. Health insurers take time to review and add new drugs to their formulary (a list of covered drugs). This is especially true for drugs that treat a disease with no previous FDA-approved treatment. This means coverage might require multiple steps. These include seeking prior authorization, appealing any denials, and using a specialty pharmacy to fill your prescription.

Obtaining Coverage for a JAK Inhibitor: Step-by-Step Guide

Once you and your healthcare provider decide to use an approved JAK inhibitor, they will write a prescription. Here’s what happens next and how you can help:

Step 1: Work with your healthcare provider

Your dermatologist will alert a staff member. They will work with you, your insurer, and the drug’s maker to get coverage for the prescribed medication. This staff member is usually a medical assistant (MA) or, in some offices, a biologic coordinator.

Step 2: Your healthcare provider contacts your insurance company

They will check your prescription benefits and see if you need to get your prescription from a specialty pharmacy. They will also check for any other requirements.

Your insurer will require the healthcare provider’s office to get prior authorization for JAK inhibitor treatment. Your provider’s office must document that you meet certain requirements to qualify for coverage. Some insurance companies require proof of disease severity (your SALT score or percentage of scalp hair loss). They might require records that show your hair loss has persisted for some time. Or, they might want to know what other treatments (e.g., topicals or intralesional injections) you have already tried that failed to stop the progression of your hair loss. After you and your provider’s office complete the prior authorization form, it will be submitted to your insurance company.

Your provider’s office will also enroll you in your drug manufacturer’s patient support program via an online portal. This alerts the drug manufacturer that your doctor prescribed its drug for you. The manufacturer’s support team will work with your provider to track your prior authorization. They will also work with a specialty pharmacy to fulfill your prescription if approved.

Step 3: Await a Letter of Determination from your insurer

A copy will be sent to your healthcare provider. Prior authorization reviews can sometimes take several weeks to process. (Ask your provider’s office what their experience has been.)

Step 4: Approval or denial

Approval! What happens next?

If approved, your provider’s office will send the prescription to a specialty pharmacy. The specialty pharmacy will call you directly to confirm your information. It will also mail your prescription or tell you where to pick it up.

Denial. What happens next?

With the help of your healthcare provider’s office,  always appeal denials!

It can be frustrating having your initial prior authorization request denied. But don’t give up! Studies show persistence pays off. Your provider’s office (sometimes while working with your drug’s manufacturer) will help you appeal. Also, your drug’s manufacturer may offer “bridge” support. It can provide your medication at no or low cost while you appeal your insurer’s denial. Your provider’s office can help you enroll in a bridge program.

Step 5: Appealing Denials

In most cases, your healthcare provider’s office will complete and file your appeal. Know the steps involved so you can follow along and provide information to your healthcare provider when needed.

First, your provider’s office will review the reason for denial. Alopecia areata patients are often denied coverage because the insurer deemed a treatment or therapy as:

  • Cosmetic and not medically necessary
  • Inappropriate because it doesn’t follow the insurer’s step therapy guidelines.

If the denial letter is unclear, your provider might call your insurer. They will ask for written clarification, including the steps for an internal appeal. Make note of the deadline for appealing a decision. Some insurers need you to file appeals within a specific time frame.

Secondly, your provider’s office will write your appeal. Appeal letters should be factual and to the point. They must include the following information and documents:

  • Your policy and claim numbers and the patient’s full name. If your policy is through an employer, include your employer’s name.
  • The denied medication and why the denial letter stated it was denied
  • Medical records that back up your diagnosis (including ICD-10 code) that relate to the therapy in question
  • Letter of Medical Necessity from your healthcare provider

In addition, your healthcare provider might ask you to write a testimonial detailing how the disease has affected your quality of life. These testimonials show insurance providers that alopecia areata is not just a cosmetic issue. It is a chronic autoimmune disease that can affect your quality of life, mental health, and social and professional life.

Next, your provider’s office will submit your appeal. You can usually file the appeal via your insurer’s online portal. Some may require U.S. mail. Work with your healthcare provider. Determine the best submission method. Also, check if you need a specific appeal form. Your provider’s office will include any attachments along with your appeal letter. If you didn’t provide a Letter of Medical Necessity from your doctor, your provider should include one for the appeals process. If you mail in your appeal, use certified mail so you can track it.

Resources

 

Lastly, keep thorough documentation. Keep documents that show your case meets the insurer’s guidelines and prove your medical need. Additionally:

  • Maintain records of all communication with the insurance company.
  • Document every time you speak to or hear from a company rep or your provider’s office.
  • Record each person’s name and the date and time of the conversation.
  • Note the key messages from the chat.

If your insurer’s customer service is unhelpful, ask for a nurse case manager or a supervisor. They might better understand your situation.

If your insurer denies your appeal, find out what to do next. Most insurers have several appeal levels. These may include a dermatologist’s peer review (which may need to be requested) or one-on-one consultations with providers. Don’t give up! Continue working with your healthcare provider’s office and drug manufacturer’s support program.

If your appeals fail all levels with your insurer, consider contacting your state insurance commission. You might be able to file an external appeal. You can find your state insurance department here.

Patient Assistance Programs

Patient Assistance

Pfizer (maker of Litfulo) and Lilly (maker of Olumiant) have patient assistance programs to help you and your doctor:

  • Investigate your insurance benefits
  • Complete prior authorization paperwork
  • Address denials and write any appeals, if applicable
  • Write a Letter of Medical Necessity (LMN)

Both programs provide co-pay assistance for underinsured patients and offer “bridge” support. Bridge support is when the manufacturer provides the patient with medication while they get insurance coverage. There are some exceptions, so please check with the specific manufacturer’s program.

Ask your doctor’s office about patient support programs for your medication. You can also learn more by visiting the drug manufacturer’s patient assistance program website.

Olumiant Patient Assistance Resources

 

Litfulo Patient Assistance Resources

 

Third-Party Access Programs and Co-pay Accumulators

You received approval from your insurer for your JAK inhibitor. Great! Here are a few things to be aware of…

Third-Party Access Programs, or pharmacy advocacy solutions, are NOT the same as patient assistance programs. Alternative funding and pharmacy advocacy programs prey on patients using high-cost medications. Their strategy is complex. They promise employers they can cut health insurance prescription costs. They will do this by removing specialty medications. This forces patients to seek help from manufacturers. The result is that patients risk not being able to get their medication, or they may run out of co-pay assistance. They would have to pay for their medication, which could cost tens of thousands of dollars.

Co-pay Accumulators (or co-pay maximizers) are a policy used by some health plans. It affects patient assistance programs, especially those that use drug company co-pay cards.

These policies argue that any amount covered by a co-pay card does not count toward the patient’s deductible or out-of-pocket maximum. While the co-pay card can lower drug costs initially, it can also raise patients’ long-term out-of-pocket costs. Patients still need to meet their deductible without credit for the co-pay card’s help.

In September 2023, courts ruled that private health plans cannot use copay accumulators for brand-name drugs if there is no suitable generic. However, insurers have not yet caught up with this ruling, so patients must be informed.

If you use a patient assistance program, check that your copay assistance counts toward your deductible and cost-sharing limit.

Bottom Line: Know the key players in getting your JAK inhibitor: your doctor, the specialty pharmacy, your insurer, and the drug maker’s assistance program. If someone calls you for information about your prescription, take their contact information. Then, discuss it with your doctor’s office. Don’t provide any information to someone you don’t know or whose role you don’t understand.

 

Related Content

Additional Resources

Related Links

 

Glossary

Bridge Coverage

Lilly and Pfizer make Olumiant and Litfulo. They are the only two FDA-approved JAK inhibitors. Both Lilly and Pfizer offer “bridge” programs for patients experiencing a delay or denial of coverage for their medication. This is for patients with commercial insurance. It helps those appealing to their insurer for medication coverage. The bridge programs let the manufacturer provide medication to patients during the prior authorization or appeals process for a limited time (typically up to two years).

ICD Coding

An alopecia areata diagnosis is billed using the International Classification of Diseases (ICD) coding system. Your healthcare provider’s office will use a code to identify the type of alopecia areata you have. The latest version (ICD-10) diagnostic codes for the disease are from L63.0 to L63.9, depending  on the type of alopecia areata:

  • L63.0 – Alopecia totalis
  • L63.1 – Alopecia universalis
  • L63.2 – Ophiasis
  • L63.8 – Other alopecia areata
  • L63.9 – Alopecia areata, unspecified
Letter of Determination

This is a letter your health insurer sends you in response to a prior authorization request. It will tell you if your request has been approved or denied. It is typically sent to your healthcare provider’s office.

Letter of Medical Necessity (LMN)

An LMN is a document from your provider. It states the medical reason for a specific prescribed treatment. It often contains relevant medical history and other information. Health insurers might require this data to approve a particular treatment.

Out-of-Pocket Costs

Out-of-pocket costs are what you (the patient) pay for medical care not covered by insurance. It also includes the deductible and copay (or coinsurance) for covered services. And, it includes any medical care not covered by your insurance.

Patient Assistance Program

Lilly and Pfizer are the manufacturers of Olumiant and Litfulo, which are currently the two FDA-approved JAK inhibitors available. Both organizations offer patient assistance programs. They offer co-pay assistance to individuals with commercial insurance to help cover the cost of their treatment. The programs also help patients and their doctors with prior authorizations and appeals of denials. Check with your physician’s office and the program websites to learn more about them and how to enroll.

Pharmacy Benefit Manager (PBM)

A PBM manages prescription drug benefits for health insurers or employers. It acts as a go-between for the insurance company, pharmacy, and drug manufacturer. PBMs are used to control costs, manage formularies, send mail-order prescriptions, and process prescription claims. Examples of PBMs are OptumRx, ExpressScripts, and Caremark.

Prior Authorization

Often called prior auth, pre-certification (or pre-cert), or PA, it is a process requiring insurers’ approval before covering treatment. It typically requires the doctor to prove the treatment is necessary.

SALT Score

The Severity of Alopecia Tool, or SALT, score measures scalp hair loss in patients with alopecia areata. It is used to assess the severity of the disease, its progression, and a patient’s response to treatment. A SALT score of 0 means no hair loss, while a score of 100 means total hair loss. A score of 50 or higher is usually considered severe.

Specialty Pharmacy

A specialty pharmacy provides high-cost medications for complex conditions. Insurers will likely require the use of a specialty pharmacy to fulfill JAK inhibitor prescriptions. Patients can usually pick up their medication at the specialty pharmacy location, or it can be mailed to their home.

Step Therapy

Step Therapy is a policy approach used by health insurers to control prescription medication costs. Step therapy policies require providers to start with treatment other than what is originally prescribed by your provider. These treatments are usually less expensive than what is originally prescribed by your healthcare provider. Patients can only “step up” to more expensive medications if they fail to adequately respond to the treatments preferred by the insurance company.

Utilization Management

Utilization Management refers to a variety of practices used by health insurance companies for healthcare services. They check if the services are needed, appropriate, and efficient. Insurers set these practices to ensure patients get the right care while controlling costs. UM practices include pre-authorization, concurrent review, retrospective review, and case management.