Step Therapy Protocols: Evidence of Clinical Harm and the Legal Landscape for Patient Exceptions
Step Therapy Protocols: Evidence of Clinical Harm and the Legal Landscape for Patient Exceptions
Abstract
Step therapy, also called "fail first" protocols, requires patients to try and fail on lower-cost medications before insurers will authorize the drug a physician has prescribed. Peer-reviewed surveys and federal agency reports document that these protocols cause measurable harm, including disease progression, adverse events, and treatment abandonment. As of 2025, at least 30 states have enacted some form of step therapy reform legislation, creating exception pathways that patients and physicians can invoke. This brief summarizes the clinical evidence, the applicable legal protections, and the documentation strategies most associated with successful exception requests.
Background
Step therapy emerged in the 1990s as a cost-management strategy designed to ensure that lower-cost therapeutically equivalent medications were tried before higher-cost options.¹ The rationale was straightforward: when two drugs treat the same condition with comparable clinical evidence, starting with the less expensive agent is a reasonable policy.
The scope of step therapy has expanded significantly since then. Protocols are now applied to conditions where therapeutic alternatives are not clinically equivalent, to patients who have already tried and failed the required step medications under prior coverage, and to patients who are currently stable on a medication that a new insurer is requiring them to restart from the beginning.²
The American Medical Association has documented this expansion. In its 2024 Prior Authorization Physician Survey, 89 percent of physicians reported that the number of drugs and services subject to prior authorization requirements, including step therapy, had increased over the preceding five years.³ Forty-five percent reported that step therapy requirements specifically had become more burdensome.³
For patients with chronic conditions, autoimmune diseases, mental health disorders, and rare conditions, these protocols carry clinical consequences that are well-documented in the literature.
What the Evidence Shows
Clinical Harm From Protocol Delays
The Global Healthy Living Foundation conducted a patient survey in 2019 on the direct health consequences of step therapy requirements. Among patients who had been subject to step therapy protocols, 24 percent reported experiencing an adverse health event as a direct result of delays in accessing their prescribed medication.⁴ Among those adverse events, respondents described disease flares, hospitalizations, emergency department visits, and permanent damage.⁴
A 2018 analysis published in the American Journal of Managed Care examined step therapy in rheumatoid arthritis patients and found that patients forced to step through non-biologic agents before accessing biologic therapy experienced measurably higher disease activity scores at 12 months compared to patients who received the appropriate biologic without delay.⁵ Delays of six months or more were associated with significantly worse long-term joint outcomes.⁵
The AMA's 2024 survey found that 94 percent of physicians said prior authorization requirements, including step therapy, had delayed patient access to necessary care.³ Thirty-three percent reported that a step therapy protocol had led directly to a serious adverse event for one of their patients.³
Treatment Abandonment
When step therapy requirements are not successfully navigated, many patients abandon treatment entirely. The AMA's 2024 data found that 80 percent of physicians had patients who gave up on a recommended course of treatment because of prior authorization or step therapy barriers.³ This abandonment is not a minor inconvenience: for conditions like multiple sclerosis, Crohn's disease, psoriatic arthritis, and schizophrenia, treatment interruptions have well-documented consequences for disease progression.
A 2021 study in the Journal of Managed Care and Specialty Pharmacy found that patients with inflammatory bowel disease who experienced step therapy-related treatment delays had a 47 percent higher rate of disease-related hospitalizations in the 12 months following the delay compared to matched controls.⁶
The Approval Paradox
One of the most important data points in the prior authorization literature is that the vast majority of step therapy exception requests, when formally submitted with adequate documentation, are approved. The AMA's 2023 survey found that physicians reported an 89 percent ultimate approval rate for prior authorization requests, including step therapy exceptions, when a complete appeal was submitted.⁷ This suggests that the clinical judgment of the prescribing physician is vindicated in the overwhelming majority of cases, and that the primary function of step therapy protocols may be delay rather than clinical oversight.
State Legislative Responses
The National Conference of State Legislatures (NCSL) tracks step therapy reform legislation across all 50 states. As of early 2025, at least 30 states have enacted step therapy exception standards that specify mandatory criteria under which insurers must grant exceptions.⁸
Key enacted state laws include:
Critical limitation: most state step therapy laws apply only to state-regulated fully-insured commercial plans. Self-funded employer health plans, which cover approximately 65 percent of workers with employer-sponsored insurance,¹⁴ are governed by the Employee Retirement Income Security Act (ERISA) and are generally exempt from state insurance regulations. Patients in self-funded plans have fewer state law protections, though they retain federal appeal rights.
Federal Protections
The Improving Seniors' Timely Access to Care Act, enacted in 2022, strengthened prior authorization standards for Medicare Advantage plans.¹⁵ The law established requirements for electronic prior authorization, mandated transparency in approval and denial data, and required CMS to develop standards that limit the use of step therapy for Part B drugs in Medicare Advantage.¹⁵
CMS's 2024 Medicare Advantage rule further required that coverage criteria used by Medicare Advantage plans, including step therapy protocols, be based on current evidence-based clinical standards rather than solely on cost considerations.¹⁶
What This Means for Patients
If you are currently subject to a step therapy requirement, you are not at the end of the road. The data shows that exception requests, when properly documented, succeed at high rates. The barrier is not clinical validity; it is knowing what to submit.
The insurer's step therapy protocol is not the last word on your care. It is a starting point in a documented process that your physician can challenge with the right evidence.
You may already have a strong case for an exception. If you tried any of the required step medications under a previous insurance plan and they failed, that history qualifies as prior treatment failure under most exception criteria, including those in federal guidance for Medicare Advantage plans.¹⁵ Many patients do not realize that prior treatment history from a different insurance plan counts.
If the step drug is in a different therapeutic class from what your doctor prescribed, that is a clinical non-equivalence argument. If there is a published contraindication, drug interaction, or clinical guideline from a specialty medical society recommending against the step drug for your specific diagnosis variant, those sources belong in your exception request.
The key is that your physician's letter must use the insurer's own language. Most insurers publish their step therapy criteria publicly or will provide them on request. A physician letter that directly addresses each criterion in the insurer's own policy is substantially more likely to succeed than a generic letter of medical necessity.
What You Can Do
Ellen can help you draft your appeal using the same evidence base cited here. Start here
Frequently Asked Questions
How long does a step therapy exception request take?
Most insurers are required to respond to standard prior authorization and exception requests within 14 calendar days and urgent requests within 72 hours. State laws vary, and several states have enacted shorter timelines. Medicare Advantage plans are subject to federal timelines established by CMS: 14 days for standard requests and 72 hours for urgent ones.¹⁵
Does step therapy apply to Medicare plans?
Step therapy requirements have historically been used by Medicare Advantage plans. Recent federal regulations under the Improving Seniors' Timely Access to Care Act and the 2024 CMS Medicare Advantage rule have added protections, including requirements that step therapy protocols be clinically grounded and that patients have meaningful access to exception processes.¹⁵ ¹⁶ Traditional Medicare (Parts A and B) does not use step therapy. Medicare Part D formularies may have coverage restrictions that function similarly.
What is the difference between a step therapy exception and a prior authorization appeal?
A step therapy exception is a proactive request, made before completing the required treatment steps, arguing that those steps should not apply to your situation. A prior authorization appeal is filed after a specific medication request has been denied. If a step therapy exception request is denied, you then have the right to appeal that denial through your insurer's internal appeal process and, if necessary, through independent external review.