The hepatitis C virus (HCV) is a chronic condition that can lead to cirrhosis, liver failure, cancer, and death.Previously, treatment uptake had been low because of the complexity of the available regimen and because the regimen depended on interferon, a drug that many patients cannot tolerate. A new drug, Sofosbuvir, has now been approved for general use. The drug can achieve a total cure and is well-tolerated by patients; furthermore, the treatment is short (8-12 weeks).Sofosbuvir, quite simply, is miraculous.The treatment costs about $85,000.

People of Asian descent and people with HIV or a history of drug or alcohol use are at elevated risk for developing hepatitis C.People who are poor are also at elevated risk.Under guidelines developed by the CDC, neither HIV status nor drug or alcohol use are contrary indicators for use of Sofosbuvir. The drug is recommended for all patients regardless of the presence of these underlying conditions.

Acme Health is a nationwide health benefits company doing business in all states and across all major markets: large self-insuring public and private employers; private employers that buy group health insurance; the individual market; Medicare Advantage; and Medicaid.The state of New Hope (a fictional state in the US) has recently enacted a liability statute that reads as follows:

Any individual who fails to exercise a reasonable level of care when making health care treatment decisions (the duty of ordinary care) shall be liable for damages proximately caused by failures to abide by such duty.The term "health care treatment decisions" shall apply to: (i) decisions related to the provision of clinical care and services furnished to patients; and (ii) decisions involving the medical necessity and appropriateness of covered treatments and services under a public or private health benefit plan, whether insured or administered.

Acme already has notified its employer groups and individual policyholders that it will begin to cover Sofosbuvir but subject to a coverage standard that limits coverage to patients with no history of HIV or alcohol or drug use, excluding from coverage those who have one, two or three of the underlying conditions to which the exclusion applies.For patients with these underlying conditions, interferon will remain the only covered treatment. Acme's medical director, who chairs Acme's "clinical excellence oversight committee," told the committee that he considers the CDC guidelines to be fundamentally flawed. In his view, past alcohol and drug use, as well as the presence of HIV, undermine the effectiveness of the drug; he believes that it would be a "waste of Acme resources" to cover these conditions. The medical director also advised the state Medicaid agency of the review standard he intends to apply to all prior authorization requests (which apply to all cases involving prescription drug coverage of hepatitis C), and the state agency concurred.

You are counsel to Acme.Advise your client on the types of liabilities the company might face across its books of business, as well as any applicable provisions of law that might exempt your client from liability under certain circumstances