BILL NUMBER: SB 866 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 9, 2011
PASSED THE ASSEMBLY SEPTEMBER 8, 2011
AMENDED IN ASSEMBLY AUGUST 26, 2011
AMENDED IN ASSEMBLY JUNE 23, 2011
AMENDED IN SENATE MAY 31, 2011
AMENDED IN SENATE APRIL 11, 2011
INTRODUCED BY Senator Hernandez
FEBRUARY 18, 2011
An act to add Section 1367.241 to the Health and Safety Code, and
to add Section 10123.191 to the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 866, Hernandez. Health care coverage: prescription drugs.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the regulation of health care service plans by the
Department of Managed Health Care and makes a willful violation of
the act a crime. Existing law provides for the regulation of health
insurers by the Department of Insurance. Commonly referred to as
utilization review, existing law governs the procedures that apply to
every health care service plan and health insurer that
prospectively, retrospectively, or concurrently reviews and approves,
modifies, delays, or denies, based on medical necessity, requests by
providers prior to, retrospectively, or concurrent with, the
provision of health care services to enrollees or insureds, as
specified.
Existing law also imposes various requirements and restrictions on
health care service plans and health insurers, including, among
other things, a prohibition on health care service plans and health
insurers that provide prescription drug benefits from excluding or
limiting coverage for a drug on the basis that the drug is prescribed
for a use that is different from the use for which the drug has been
approved for marketing by the federal Food and Drug Administration.
Existing law also requires a health care service plan that provides
prescription drug benefits to maintain an expeditious process by
which prescribing providers, as described, may obtain authorization
for a medically necessary nonformulary prescription drug, according
to certain procedures.
This bill would require the Department of Managed Health Care and
the Department of Insurance to, on or before July 1, 2012, develop a
prior authorization form for use by every health care service plan
and health insurer that provides prescription drug benefits, except
as specified. On and after January 1, 2013, or 6 months after the
form is developed, whichever is later, the bill would require every
prescribing provider, as defined, when requesting prior authorization
for prescription drug benefits, to submit the prior authorization
form to the health care service plan or health insurer, and would
require those plans and insurers to utilize and accept those prior
authorization forms for prescription drug benefits. Except as
specified, upon a failure by the plan or insurer to accept the prior
authorization form or to respond to a prescribing provider within 2
business days, the bill would deem the prior authorization request as
granted.
Because a willful violation of the bill's provisions relative to
health care service plans would be a crime, the bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1367.241 is added to the Health and Safety
Code, to read:
1367.241. (a) Notwithstanding any other provision of law, on and
after January 1, 2013, a health care service plan that provides
prescription drug benefits shall accept only the prior authorization
form developed pursuant to subdivision (c) when requiring prior
authorization for prescription drug benefits. This section does not
apply in the event that a physician or physician group has been
delegated the financial risk for prescription drugs by a health care
service plan and does not use a prior authorization process. This
section does not apply to a health care service plan, or to its
affiliated providers, if the health care service plan owns and
operates its pharmacies and does not use a prior authorization
process for prescription drugs.
(b) If a health care service plan fails to utilize or accept the
prior authorization form, or fails to respond within two business
days upon receipt of a completed prior authorization request from a
prescribing provider, pursuant to the submission of the prior
authorization form developed as described in subdivision (c), the
prior authorization request shall be deemed to have been granted. The
requirements of this subdivision shall not apply to contracts
entered into pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), Article 2.91 (commencing with
Section 14089), or Chapter 8 (commencing with Section 14200) of the
Welfare and Institutions Code.
(c) On or before July 1, 2012, the department and the Department
of Insurance shall jointly develop a uniform prior authorization
form. Notwithstanding any other provision of law, on and after
January 1, 2013, or six months after the form is developed, whichever
is later, every prescribing provider shall use that uniform prior
authorization form to request prior authorization for coverage of
prescription drug benefits and every health care service plan shall
accept that form as sufficient to request prior authorization for
prescription drug benefits.
(d) The prior authorization form developed pursuant to subdivision
(c) shall meet the following criteria:
(1) The form shall not exceed two pages.
(2) The form shall be made electronically available by the
department and the health care service plan.
(3) The completed form may also be electronically submitted from
the prescribing provider to the health care service plan.
(4) The department and the Department of Insurance shall develop
the form with input from interested parties from at least one public
meeting.
(5) The department and the Department of Insurance, in development
of the standardized form, shall take into consideration the
following:
(A) Existing prior authorization forms established by the federal
Centers for Medicare and Medicaid Services and the State Department
of Health Care Services.
(B) National standards pertaining to electronic prior
authorization.
(e) For purposes of this section, a "prescribing provider" shall
include a provider authorized to write a prescription, pursuant to
subdivision (a) of Section 4040 of the Business and Professions Code,
to treat a medical condition of an enrollee.
SEC. 2. Section 10123.191 is added to the Insurance Code, to read:
10123.191. (a) Notwithstanding any other provision of law, on and
after January 1, 2013, a health insurer that provides prescription
drug benefits shall utilize and accept only the prior authorization
form developed pursuant to subdivision (c) when requiring prior
authorization for prescription drug benefits.
(b) If a health insurer fails to utilize or accept the prior
authorization form, or fails to respond within two business days upon
receipt of a completed prior authorization request from a
prescribing provider, pursuant to the submission of the prior
authorization form developed as described in subdivision (c), the
prior authorization request shall be deemed to have been granted. The
requirements of this subdivision shall not apply to contracts
entered into pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), Article 2.91 (commencing with
Section 14089), or Chapter 8 (commencing with Section 14200) of the
Welfare and Institutions Code.
(c) On or before July 1, 2012, the department and the Department
of Managed Health Care shall jointly develop a uniform prior
authorization form. Notwithstanding any other provision of law, on
and after January 1, 2013, or six months after the form is developed,
whichever is later, every prescribing provider shall use that
uniform prior authorization form to request prior authorization for
coverage of prescription drug benefits and that every health insurer
shall accept that form as sufficient to request prior authorization
for prescription drug benefits.
(d) The prior authorization form developed pursuant to subdivision
(c) shall meet the following criteria:
(1) The form shall not exceed two pages.
(2) The form shall be made electronically available by the
department and the health insurer.
(3) The completed form may also be electronically submitted from
the prescribing provider to the health insurer.
(4) The department and the Department of Managed Health Care shall
develop the form with input from interested parties from at least
one public meeting.
(5) The department and the Department of Managed Health Care, in
development of the standardized form, shall take into consideration
the following:
(A) Existing prior authorization forms established by the federal
Centers for Medicare and Medicaid Services and the State Department
of Health Care Services.
(B) National standards pertaining to electronic prior
authorization.
(e) For purposes of this section, a "prescribing provider" shall
include a provider authorized to write a prescription, pursuant to
subdivision (a) of Section 4040 of the Business and Professions Code,
to treat a medical condition of an insured.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.