Many HMO Plans are beginning to utilize the cost-saving technique of restricting drug coverage to a predetermined list of drugs. This is referred to as a Restrictive Formulary. Although not yet common in Hawaii, this practice is increasingly popular among mainland HMOs. The Hawaii QUEST plans all utilize restrictive formularies. The purpose of the formularies is to restrict the HMO''s pharmacy costs, since only a limited number of prescription drugs are covered. At its best, this system can save costs without adversely affecting quality of care if a thoughtful, comprehensive list of covered prescription drugs is available. However, there is potential for a restrictive formulary to not include medications that you and your physician agree may be the best choices for you.
Most restrictive formularies are designed by a Pharmacy Benefit Manager (PBM), which is a company that contracts with your HMO to design the drug formularies. Some of these PBM''s are actually owned by drug manufacturers, thereby creating the potential for a serious conflict of interest, if competitor''s products are not included in the formulary.
As a consumer, you should keep informed and know your rights concerning restrictive formularies. It would be prudent if you are covered by, or considering enrolling in, a health plan with this type of formulary to understand which medications are covered, how drugs are added to or removed from the formulary, the identity of the PBM, and what procedures (if any) are available to you and your physician to obtain coverage for nonformulary drugs Your health plan should provide you this information upon request. If an issue arises concerning non payment or non availability of medications that you and your physician agree should be covered, this should first be dealt with through your health plan''s grievance procedure. If the issue is not settled to your satisfaction, you may then contact the Office of the Insurance Commissioner at 586-2790. In Hawaii, the Patient''s Rights and Responsibility Act of 1998 allows consumers the right to seek resolution of issues with their employer-sponsored health insurance plans through intervention of the Insurance Commissioner.
Peter Locatelli MD
Vice President, Hawaii Coalition for Health
Written by Peter Locatelli, M.D., Vice President.
Edited by Richard Miller, UII, Professor of Law, Emeritus