Employer, private payer considerations around medical cannabis coverage

As plan sponsors and private payers begin integrating medical cannabis coverage into benefits plans, it’s crucial they account for the dynamic nature of the industry and remain adaptable to anticipated changes around distribution and product innovation.

Although medical cannabis isn’t new, current offerings are just a first step, said Matt Gaudry, director of product support and management at Great-West Life Assurance Co., during Benefits Canada‘s Face to Face Drug Plan Management Forum in Toronto on Dec. 5. 

“The starting point is pretty conservative, if you look at it. There are limitations that are in place,” he said.

Read: Employer obligations around medical pot, benefits plans

“There’s a lot of common nature to the programs that are being offered, but you’re seeing a limit on the eligible conditions. There’s some alignment among the carriers, but there are small nuanced deviations. And that is, I think, a testament to the fact that there’s just a lack of clinical information that we’re used to as payers.” 

As well, there’s diverging information when it comes to cannabis strains, strengths and formulations, no drug identification number and considerations around the drug’s reasonable and customary price. Distribution is also rapidly evolving from an exclusively mail-order market for medical cannabis, which may change as the recreational market evolves, said Gaudry.

As such, early adopters among employers are still waiting for payers to provide options beyond the health-care spending account, which was the only choice historically available when it came to covering the drug, he noted. And many others are still at the stage of sorting out their human resources policies around cannabis.

“The majority of employers are still either on the fence or they just don’t know, because they haven’t sought out enough information or they haven’t had access to the right information.” 

Read: A pot primer for plan sponsors

Also speaking during the session, Jason Kennedy, director of operations at Telus Health, said the medical cannabis market is dynamic and evolving rapidly.

Down the line, he noted, there’s a chance it could be a standard benefit for most plans, with distribution channels evolving, so it’s important that all stakeholders are prepared for these possibilities. But plan sponsors have to start somewhere, said Kennedy, and there are ways they can get more comfortable, such as considering an insurer partner with a preferred licensed producer relationship.

“One of the advantages to having limited distribution or preferred provider networks is that you could establish programs for learning,” said Gaudry. “One of the things we’ve called out is a lack of data, lack of information. So you could implement member support or programs that have feedback mechanisms to help inform future decisions, measure health outcomes and really learn about which products are better suited to treat which conditions.”

However, he added, the tradeoff for these networks is potential complexity for plan members and possibly limiting access to certain products. “Is that tradeoff worth the information? That’s definitely something that payers, employers and consultants will have to consider as the programs that are being offered evolve.”

Read: Recreational marijuana legalization raises new questions for employers

Another option for plan sponsors is implementing cost containment controls, considering the use of annual dollar maximums, leveraging prior authorization or tracking and auditing claims.

For those employers interested in covering medical cannabis in their benefits plan, it’s important to estimate the impact on the plan by gathering claims data, selecting indications for potential coverage, layering on standard clinical assumptions, as well as looking at the average use per day and average cost assumptions, said Kennedy.

Monitoring and evaluating uptake will also be key. As Gaudry noted, employers can challenge payers in the data analytics space to leverage some of the best practices from prescription drug analytics and vary it to this area.

“Being able to prove that out is going to be key . . . basically essential to all these programs, and that’s one of the considerations,” he said. “And most important is getting the feedback, as the benefits provider, to your employees.”

Read more stories from the Face to Face Drug Plan Management Forum