RD266 - Evaluation of House Bill 615 and House Bill 669: Mandated Coverage of Amino Acid-Based Formulas


Executive Summary:
House Bill 615 of the 2008 General Assembly would mandate health insurance coverage for amino acid-based elemental formulas for various gastrointestinal (GI) and hypersensitivity diseases and disorders, and HB 669 of the 2008 Session would mandate coverage for amino acid-based formulas for inborn errors of metabolism (IEM) and certain GI conditions. The type of amino acid-based formula and the length of time used are specific to the disease or disorder. However, the precise conditions covered by the bills are unclear, as they would cover broad categories of GI and hypersensitivity conditions. Four similar mandates have been proposed in Virginia since 1999. The majority of states have mandates covering formulas for IEM. However, fewer states cover formulas for GI and hypersensitivity disorders.

MEDICAL EFFICACY AND EFFECTIVENESS

The medical efficacy and effectiveness of amino acid-based formulas are well established for certain conditions listed in HB 615 and HB 669; however, the bills also cover conditions for which the use is not standard medical practice. Few clinical trials exist for the use of metabolic formulas in IEM disorders, given the dire consequences of withholding treatment, but there is strong medical evidence for their use. Clinical trials show positive outcomes for the use of elemental formulas in treating eosinophilic esophagitis and Crohn’s disease, and their use is standard medical practice for children. However, the use of amino acid-based elemental formulas is not primary treatment for other conditions covered by the bill.

SOCIAL IMPACT

Conditions requiring the use of amino acid-based formulas are relatively rare. Most individuals diagnosed with IEM treated with amino acid-based metabolic formulas are likely using them. An estimated less than one percent of those diagnosed with the hypersensitivity and GI conditions utilize amino acid-based formulas. Most health insurance companies do not provide coverage of the formulas. This may be a financial hardship because the formulas’ cost could range from three to ten percent of median household income in 2008. Therefore, some individuals, including some adults with IEM, may not be receiving the necessary formula due to cost.

FINANCIAL IMPACT

The impact of HB 615 and HB 669 on premiums is expected to be in the range of other health insurance mandates. Overall, the proposed mandates may increase the total cost of health care in Virginia, primarily due to the inclusion of certain GI and hypersensitivity conditions for which amino acid-based formulas are not standard medical practice. Likewise, this may inappropriately increase the utilization rate of these formulas. Focusing the mandates on increasing the availability of formulas for those disorders for which amino acid-based formulas are medically necessary may modestly reduce the total cost of health care due to the reduction in adverse medical consequences.

BALANCING MEDICAL, SOCIAL, AND FINANCIAL CONSIDERATIONS

Amino acid-based metabolic formulas are the primary medical treatment for ten IEM disorders screened in Virginia, and amino acid-based elemental formulas are the primary treatment for certain severe GI and hypersensitivity conditions. HB 615 would mandate coverage of elemental formulas for GI and hypersensitivity conditions, but does not include coverage for IEMs. HB 669 would mandate coverage of amino acid-based formulas for IEMs as well as certain GI conditions, but does not include hypersensitivity conditions. Mandated coverage would help relieve financial hardship of those self-paying. However, both bills include coverage for conditions for which amino acid-based formulas are not standard medical practice. Limiting the mandates to coverage of conditions that medical practice guidelines recommend be treated with amino acid-based formulas would more directly meet patients’ needs and would reduce the impact on insurance premiums.