BILL ANALYSIS Ó
AB 369
Page 1
ASSEMBLY THIRD READING
AB 369 (Huffman)
As Introduced February 14, 2011
Majority vote
HEALTH 13-5 APPROPRIATIONS 12-5
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|Ayes:|Monning, Ammiano, Atkins, |Ayes:|Fuentes, Blumenfield, |
| |Bonilla, Eng, Gordon, | |Bradford, Charles |
| |Hayashi, | |Calderon, Campos, |
| |Roger Hernández, Bonnie | |Chesbro, Gatto, Hall, |
| |Lowenthal, Mitchell, Pan, | |Hill, Ammiano, Mitchell, |
| |V. Manuel Pérez, Williams | |Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Garrick, Nestande, |Nays:|Harkey, Donnelly, |
| |Silva, Smyth | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Prohibits health plans and health insurers that
restrict medications for the treatment of pain 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.
Specifically, this bill :
1)Requires health plans and health insurers that restrict
medications for the treatment of pain pursuant to step therapy
or fail first protocol to be subject to the requirements of
this bill.
2)Requires the duration of any step therapy or fail first
protocol to be determined by a patient's prescribing
physician.
3)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.
4)Specifies that prior authorization is no longer required once
a patient has tried and failed on two pain medications and
allows the physician to write the prescription for the
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appropriate pain medication.
5)Requires a note in the patient's chart indicating that he or
she has tried and failed on the health plan's or health
insurer's step therapy or fail first protocol to suffice as
prior authorization from the health plan or health insurer.
6)Permits a pharmacist to process a patient's prescription
without additional communication with the health plan or
health insurer when the patient's physician notes on the
prescription that the plan's or insurer's step therapy or fail
first protocols have been met.
7)Provides that nothing in this bill prohibits a health plan or
health insurer from charging co-payments or deductibles for
prescription drug benefits or imposing limitations on maximum
coverage of prescription drug benefits, as specified.
8)Prohibits this bill from being construed to require coverage
of prescription drugs not in a health plan's or health
insurer's drug formulary or to prohibit generically equivalent
drugs or generic drug substitutions.
FISCAL EFFECT : According to the Assembly Appropriations
Committee:
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
law, the Patient Protection and Affordable Care Act (ACA) may
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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 : The author states c hronic pain affects more Americans
than diabetes, heart disease, and cancer combined and has
serious economic ramifications. A ccording to the author, in
order to reduce their costs and improve their profit margins,
many health plans utilize step therapy or "fail first" policies
which force 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 asserts that not only does this policy deny
patients the medications they need when they need them, step
therapy can actually increase the direct cost of health care in
the long run due to excessive use of emergency rooms;
unscheduled hospital admissions; permanent damage as a result of
being on the wrong medication; loss of employment; and, loss of
life itself when a person with chronic pain commits suicide.
The author believes that this bill will move the state closer to
changing practices that have resulted in higher long-term health
care costs and forced chronic pain patients to endure
unnecessary physical and emotional suffering.
On December 16, 2011, the federal Center for Consumer
Information and Insurance Oversight (CCIIO) issued a bulletin
proposing that essential health benefits (EHBs) be defined using
a benchmark approach. Under the CCIIO intended approach, states
would have the flexibility to select a benchmark plan that
reflects the scope of services offered by a "typical employer
plan." This approach would give states the flexibility to
select a plan that would best meet the needs of their residents.
In accordance with the guidance, the benchmark options include:
1)One of the three largest small group plans in the state by
enrollment;
2)One of the three largest state employee health plans by
enrollment;
3)One of the three largest federal employee health plan options
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by enrollment; and,
4)The largest HMO plan offered in the state's commercial market
by enrollment.
The benefits and services included in the benchmark plan
selected by the state would be the EHB package.
To meet the EHB coverage standard, a health plan or health
insurer would offer benefits that are "substantially equal" to
the benchmark plan selected by the state and modified as
necessary to reflect the 10 coverage categories. The bulletin
indicates that states must select their benchmark plan in the
third quarter two years prior to the coverage year (by September
2012). The ACA requires states to defray the cost of any
benefits required by state law to be covered by health plans and
health insurers beyond the EHBs. The federal bulletin implies
that existing state mandates could be incorporated in EHBs to
the extent they are included in a benchmark plan existing in
2012. However, the federal rules are not final or entirely
clear on this point. Comments on the federal bulletin are due
by January 31, 2012. Further evaluation of individual state
mandates pending this year will need to be considered in the
context of a broader discussion about California's benchmark
plan.
Chronic pain advocacy groups, health care professionals, and
community organizations support this bill because it will ensure
that patients have access to the right treatment at the right
time. The sponsor of this bill, For Grace, writes that this
bill highlights the inadequacies of step therapy because a pain
patient can tell immediately whether or not a pain medication is
working and should not be forced to stay on medicine that does
not relieve their pain. The American Chronic Pain Association
asserts in support that step therapy policies move medicine in
the wrong direction by putting patients through undue pain and
suffering and forcing health care providers to write
prescriptions that they know may not help reduce a patient's
pain. The California Nurses Association writes in support that
the only factor that should drive prescribing methods or mandate
a particular method of treatment should be between the
professional judgment of a licensed health care professional in
consultation with the individual needs of each patient.
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Health plans, health insurers, and pharmacy benefit managers
(PBMs) object to this bill. America's Health Insurance Plans
argues that consumers select coverage based upon the elements
they consider desirable and benefit mandates eliminate the
ability of health insurers and health plans to provide unique
benefit packages aimed at the needs of the consumers by
requiring individuals and employers to purchase benefits
prescribed by the Legislature, not driven by consumer choice.
PBMs, including CVS/Caremark and Express Scripts, Inc., contend
that prohibiting the use of this process for pain medications
will make it more difficult to manage the costs of prescription
drugs and increase premium and co-payment costs for all
patients. Lastly, the California Association of Joint Powers
Authorities adds that this bill unnecessarily increases public
sector employer cost of providing health care prescription drug
coverage to employees.
Analysis Prepared by : Cassie Royce / HEALTH / (916) 319-2097
FN: 0003066