Lawsuit Alleges Wash. State Medicaid Rations Hep C Meds

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By Paul Shukovsky

Feb. 23 — A lawsuit filed Feb. 16 asserts the Washington State Health Care Authority is excluding Medicaid coverage for very expensive hepatitis C medications such as Harvoni for all but the sickest patients in violation of federal statute.

The lawsuit, filed on behalf of Medicaid enrollees, follows nearly identical suits also seeking class action status that were filed in January against Washington insurers Group Health Cooperative and BridgeSpan Health Co., a Regence BlueShield affiliate . Both insurers have since modified their coverage policies for direct-acting antiviral medications used to clear the hepatitis C virus with Regence essentially adopting the standard of care.

The lawsuit against the Washington Health Care Authority alleges: “The restrictions on coverage do not have a clinical purpose, but are imposed solely due to WHCA's fiscal concerns.”

Health Care Authority leaders have readily acknowledged to Bloomberg BNA that their policy is an attempt to align clinical needs for the drug with budgetary realities by determining who gets drugs like Harvoni based among other things on the level of liver fibrosis with the requirement that the organ already must be damaged before treatment can commence, absent certain co-occurring conditions .

‘It's Out of Our Hands.'

In contrast with the prior lawsuits against the private insurers which allege contract violations, the suit against the Health Care Authority says that the agency's coverage policies violate the Medicaid Act by:

  •  excluding qualified people and covering only the most severely ill people, “even though the medications are likely to cure them”;
  •  imposing “categorical restrictions that are not based upon prevailing clinical standards” in contravention of Medicaid Act comparability requirements; and
  •  “implementing a policy that de facto rations coverage” by making Medicaid enrollees wait until they have developed severe liver damage in contravention of the reasonable-promptness provision of the statute.

    The suit quotes Health Care Authority Chief Pharmacy Officer Donna L. Sullivan as saying: “I can guarantee you that all of us agree that everyone should be treated whether they are at stage 2, stage 3, stage 4.” Citing a funding shortfall she continued saying “It's out of our hands. None of us would argue that we should not expand it, that it's not the right thing to do, but we live in a political environment as a state” and must operate within the resources allocated.

    Amy Blondin, chief communications officer at the Health Care Authority, told Bloomberg BNA in a Feb. 22 e-mail: “Hepatitis C drug coverage is a national issue with which many states are struggling, and HCA is no different. We cannot comment on pending or active litigation.”

    The Seattle firm Sirianni Youtz Spoonemore Hamburger and partner Richard Spoonemore represent plaintiffs in all the suits. He told Bloomberg BNA Feb. 22: “We are certainly very pleased that Regence and Group Health are prospectively changing their policies to give people the cure that they are contractually entitled to.” However before the cases settle, “residual issues” remain such as compensation for “the people who paid on their own. There’s not a lot, but we have to help those folks as well.”

    ‘Financial and Moral Returns.'

    Spoonemore said he also wants to ensure that the Regence change of policy is communicated to liver specialists and to enrollees infected with hepatitis C.

    Jennifer Morgan, a spokeswoman for Regence parent company Cambia Health Solutions Inc., told Bloomberg BNA in a Feb. 22 e-mail: “Our policies for Harvoni and other HepC drugs were already under review as part of our normal business cycle and to ensure alignment with the new national standards. This wasn’t a decision made as a result of the lawsuit.”

    Group Health didn't respond to a Feb. 22 query from Bloomberg BNA requesting specific information about it's coverage policies for the meds.

    Spoonemore said in response to a Bloomberg BNA question about the difficulty of insurers absorbing the expense of drugs such as Harovi: “Every study done on Harvoni and other DAAs [a reference to direct-acting antiviral medications] have shown they are cost-effective to the system. We are talking about making an up-front investment that will bring both financial and moral returns.”

    Spoonemore's firm is joined in bringing the case against HCA by the Harvard Law School's Center for Health Law & Policy Innovation and Columbia Legal Services, a public interest firm in Washington state which bills itself as advocating for “people who face injustice and poverty.”

    To contact the reporter on this story: Paul Shukovsky in Seattle at

    To contact the editor responsible for this story: Brian Broderick at

    For More Information

    Text of the lawsuit is at

    Request Health Care on Bloomberg Law