Anthem Blue Cross is backing off a decision to require some policyholders to buy their prescription drugs from a single mail-order pharmacy — a requirement that the California attorney general's office said may be illegal.
Anthem, California's largest for-profit health insurer, said in November that it was imposing the new rule for so-called specialty medications used to treat major illnesses, such as cancer and HIV/AIDS. The company said the limitation would help keep costs down for patients and businesses.
That may indeed be true. But as I reported last month, California's Unruh Civil Rights Act (Section 51 of the Civil Code) specifies that all people must be treated equally "no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status or sexual orientation."
In response, California Atty. Gen. Kamala D. Harris said that any rule that forces some people to buy their meds from one drugstore but allows others to shop elsewhere could violate the law.
"California law clearly states that no one can be discriminated against because of a medical condition," said Lynda Gledhill, a spokeswoman for Harris. "If patients are being required to get their prescriptions from a certain pharmacy because of their condition, that is likely illegal."
Anthem is now notifying people who take specialty medications that it won't require them to buy their drugs from the online pharmacy CuraScript starting March 1, as originally planned.
"Because Anthem has received feedback about this specialty pharmacy program from its members, we are evaluating that input to better serve our members and, for the time being, have eliminated the stated March 1, 2013, required date to use CuraScript for such additional specialty medications," the insurer said in its letter.
Darrel Ng, an Anthem spokesman, said the insurer believes the new requirement is legal. He said the company is only postponing the rule, rather than abandoning it.
"In response to feedback that has been conveyed by our members, which we are in the process of evaluating, we are delaying the March 1 changes in the specialty pharmacy program," Ng said. "We value the input of our members."
He declined to say when Anthem may again try to implement the requirement.
David Balto, former policy director for the Federal Trade Commission, said Anthem will have to make significant changes if it hopes to avoid legal action by Harris' office.
"They recognized that the policy violated the law," he said. "Consumers and pharmacies drew a line in the sand, and Anthem backed down."
Balto, who now works as a Washington antitrust attorney, was retained by retail drugstores to challenge the specialty-med requirement.
Anthem also faces a class-action lawsuit filed by the Santa Monica advocacy group Consumer Watchdog. It alleges that the insurer's policy switch would endanger people with HIV/AIDS by denying them the opportunity to interact with a pharmacist about their medication.
"Blue Cross' announcement is a big relief to HIV/AIDS patients who had a gun to their head to cut off contact with their local pharmacist," said Jerry Flanagan, staff attorney for Consumer Watchdog.
Sections 54 and 55 of the Civil Code state that people with disabilities or medical conditions "have the same right as the general public to the full and free use of the streets, highways, sidewalks, walkways, public buildings [and] medical facilities, including hospitals, clinics and physicians' offices."
Section 12926.1 of the California Government Code specifies that "physical and mental disabilities include, but are not limited to, chronic or episodic conditions such as HIV/AIDS, hepatitis, epilepsy, seizure disorder, diabetes, clinical depression, bipolar disorder, multiple sclerosis and heart disease."
In its first notices to people using specialty meds, Anthem said that "using a retail pharmacy will be considered going out-of-network."
It warned such people that the only way to receive coverage for their drugs would be to shop at CuraScript. Buying medication elsewhere would require them to pay the full cost, Anthem said.
The price of specialty medications can run in the thousands of dollars. Anthem's requirement thus would have forced a specific group of people to buy their drugs at the pharmacy of Anthem's choosing.
Other people with chronic conditions such as diabetes faced no such requirement. It was this seemingly inconsistent approach to drug coverage that raised a red flag for the attorney general's office.
Experts said Anthem was correct in arguing that prices for specialty meds can be better controlled by cutting deals with a single pharmacy. But this placed the interests of the insurer and the pharmacy ahead of those of the patient.
A more equitable solution may be for Anthem to allow people to buy their drugs anywhere, but to offer a discount for drugs purchased from CuraScript. This would provide an opt-out of the CuraScript requirement.
This may not provide as much cost savings as limiting all coverage to CuraScript, but it would likely make the attorney general a whole lot happier.
David Lazarus' column usually runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to email@example.com.