BILL ANALYSIS Ó
AB 369
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 369 (Huffman) - As Introduced: February 14, 2011
Policy Committee: HealthVote:13-5
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill prohibits health plans and health insurers from
requiring a patient to try and fail on more than two pain
medications before allowing the patient access to the pain
medication, or its generic equivalent, prescribed by his or her
physician.
In addition, this bill grants the prescribing physician control
over the duration of any fail-first trials, and allows the
physician to prescribe the desired medication without further
authorization from the plan or insurer once two trials have been
conducted.
FISCAL EFFECT
1)Negligible state fiscal effect associated with the mandate to
cover the prescribed medication after two fail-first trials.
According to the California Health Benefits Review Program
(CHBRP), there is insufficient information to estimate a
change in utilization or cost for enrollees whose prescribed
medications may be subject to a fail-first protocol not
compliant with this bill. Most medications are not subject to
fail-first protocols and, for those that are, the majority of
protocols appear to already be compliant with this bill.
2)Likely minor, if any, state fiscal impact associated with
other provisions of the bill that allow physicians to control
the duration of trials and streamline the plan's authorization
process. CHBRP did not assess the fiscal impact of these
provisions.
3)Federal regulations implementing the federal health reform
AB 369
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law, the Patient Protection and Affordable Care Act (ACA) may
impact the cost of this bill. Under current law, beginning in
2014 states will be liable for any additional cost related to
state-level benefit mandates on plans offered through new
health insurance exchanges that go beyond minimum federal
requirements. At this time, it is unknown whether this bill
might impose future state costs.
COMMENTS
1)Rationale . According to the author, in order to reduce their
costs and improve their profit margins, many health plans use
step therapy or "fail first" policies which forces patients to
try several alternative medications, which in some cases
include over-the-counter medicines, before they are permitted
to get the medication that their physician ordered. The
author contends the duration of these step therapy protocols
is left up to the insurance company or health plan and can
last months. The author asserts that step therapy forces
chronic pain patients to endure unnecessary physical and
emotional suffering.
2)Fail-First Protocols . Proponents of fail-first protocols
assert that it protects the health and safety of patients, as
well as reduces health care spending, by ensuring that the
most cost-effective and safest treatment is attempted first
and that more costly and risky therapies are used only if
necessary. Fail-first protocols are commonly used for certain
higher-cost medications or medications with a shorter history
of safety and effectiveness than the first-line alternatives.
CHBRP's analysis indicates that health plans and insurers are
extremely varied in their use of fail-first protocols for pain
medication. For example, some enrollees affected by this bill
have benefit coverage that is not subject to any fail-first
protocol, and no single pain medication is subject to a
fail-first protocol on every insurer's list. Some of the pain
medications identified by CHBRP that require the use of
fail-first protocols are controlled substances that the
federal Drug Enforcement Agency (DEA) has determined have a
high potential for abuse, although many are not. CHBRP also
indicates fail-first protocols generally permit exceptions for
intolerable side effects or contraindications.
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3)Mandates and the Affordable Care Act . The ACA creates new
state-run health insurance exchanges that will likely provide
coverage to millions of Californians, and requires that health
plans offered through an exchange cover certain categories of
benefits, called Essential Health Benefits (EHBs). The
Secretary of Health and Human Services (HSS) is expected to
publish guidance later in 2011 and 2012 that will further
define these categories. These definitions will have important
fiscal implications for the state. The ACA specifies that if
states require plans in the exchange to offer additional
benefits that go beyond the defined EHBs, then states must pay
the additional cost related to those mandates. At this time,
there are a number of outstanding questions related to how
federally defined EHBs will interact with state-level benefit
mandates.
The ACA provisions related to EHB are silent on whether health
plans offered through the exchange may use step therapy and
fail-first protocols. Therefore, any potential future state
cost impact from this mandate would be unknown until the
design of EHBs, and the methodology used to determine state
liability associated with state-level benefit mandates, are
made clear.
1)Prior Legislation . AB 1826 (Huffman) in 2010 prohibited the
use of fail-first protocols for pain medication altogether,
instead of restricting the number of trials to two. CHBRP's
analysis of AB 1826 indicated a Medi-Cal cost of approximately
$10 million and increased premiums in the private market of
$11 million. AB 1826 was held on the Suspense file of the
Senate Appropriations Committee.
2)Other Mandates in the Current Session . There are fourteen
health mandates that were introduced this year, including AB
369. Other mandates in the current session include:
a) AB 72 (Eng): Acupuncture
b) AB 137 (Portantino): Mammography
c) AB 154 (Beall): Mental Health Services
d) AB 171 (Beall): Autism
e) AB 185 (Hernández): Maternity Services
f) AB 310 (Ma): Prescription Drugs
g) AB 369 (Huffman): Pain Prescriptions
h) AB 428 (Portantino): Fertility Preservation
i) AB 652 (Mitchell): Child Health Assessments
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j) AB 1000 (Perea): Cancer Treatment
aa) SB 136 (Yee): Tobacco Cessation
bb) SB 155 (Evans): Maternity Services
cc) SB 173 (Simitian): Mammograms
dd) SB 255 (Pavley): Breast Cancer
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081