BILL NUMBER: AB 889 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 23, 2013
AMENDED IN ASSEMBLY MARCH 21, 2013
INTRODUCED BY Assembly Member Frazier
FEBRUARY 22, 2013
An act to add Section 1367.243 to the Health and Safety Code, and
to add Section 10123.192 to the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 889, as amended, Frazier. Health care coverage: prescription
drugs.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of that act a crime. Existing law also 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, providing 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, requiring 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. Existing law also requires every health care
service plan that provides prescription drug benefits that maintains
one or more drug formularies to provide to members of the public,
upon request, a copy of the most current list of prescription drugs
on the formulary.
This bill would impose specified requirements on health care
service plans or health insurers that restrict
provide coverage for medications pursuant to step therapy
or fail first protocol. The bill would require a plan or insurer to
have an expeditious process in place to authorize exceptions to step
therapy when medically necessary and to conform effectively and
efficiently to continuity of care. The bill would require the
duration of any step therapy or fail first protocol to be consistent
with up-to-date evidence-based outcomes and current
published peer-reviewed , scientific, medical
and pharmaceutical literature evidence
, and would, except under certain conditions, prohibit a health care
service plan or health insurer from requiring that a patient try and
fail on more than 2 medications before allowing the patient access
to other medication prescribed by the prescribing provider, as
specified. The bill, with regard to an enrollee or insured
changing plans or policies, would prohibit a new plan or insurer from
requiring the enrollee or insured to repeat step therapy when that
person is already being treated for a medical condition by a
prescription drug, as specified. The bill would specify that these
provisions would not apply to accident-only, specified disease,
hospital indemnity, Medicare supplement, dental-only, or vision-only
contracts or policies.
Because a willful violation of these requirements with respect 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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1367.243 is added to the Health and Safety
Code, to read:
1367.243. (a) Notwithstanding any other law, a health care
service plan that restricts provides coverage
for medications pursuant to step therapy or fail first
protocol shall be subject to the following requirements:
(1) The health care service plan shall have an expeditious process
in place to authorize exceptions to step therapy when medically
necessary and to conform effectively and efficiently to continuity of
care.
(2) The duration of any step therapy or fail first protocol shall
be consistent with up-to-date evidence-based outcomes and
current published peer-reviewed , scientific,
medical and pharmaceutical literature
evidence .
(3) The health care service plan shall not require a patient to
try and fail on more than two medications before allowing the patient
access to the medication, or generically equivalent drug, prescribed
by the prescribing provider, unless the FDA-approved label
indication, peer-reviewed, scientific, medical and pharmaceutical
evidence, or clinical research trials focusing on clinical
outcomes, supports that more than two prior therapies should be used
before using the requested medications.
(4) In circumstances where an enrollee is changing plans, the new
plan shall not require the enrollee to repeat step therapy when that
enrollee is already being treated for a medical condition by a
prescription drug provided that the drug is appropriately prescribed
and is considered safe and effective for the enrollee's condition.
(b) For purposes of this section, the following shall apply:
(1) "Prescribing provider" shall include a provider who is
authorized to write a prescription, as described in subdivision (a)
of Section 4040 of the Business and Professions Code, to treat a
medical condition of an enrollee.
(2) "Generically equivalent drug" means a drug product with the
same active chemical ingredients of the same strength, quantity, and
dosage form, and of the same generic drug name, as determined by the
United States Adopted Names Council and accepted by the federal Food
and Drug Administration, as those drug products having the same
chemical ingredient.
(c) This section does not prohibit a health care service plan from
charging a subscriber or enrollee a copayment , coinsurance,
or a deductible for prescription drug benefits or from setting
forth, by contract, limitations on maximum coverage of prescription
drug benefits, provided that the copayments, coinsurance,
deductibles, or limitations are reported to, and held unobjectionable
by, the director and communicated to the subscriber or enrollee
pursuant to the disclosure provisions of Section 1363.
(d) Nothing in this section shall be construed to require coverage
of prescription drugs not in a plan's drug formulary or to prohibit
generically equivalent drugs or generic drug substitutions as
authorized by Section 4073 of the Business and Professions Code.
(e) This section shall not apply to accident-only, specified
disease, hospital indemnity, Medicare supplement, dental-only, or
vision-only health care service plan contracts.
SEC. 2. Section 10123.192 is added to the Insurance Code, to read:
10123.192. (a) Notwithstanding any other law, a health insurer
that restricts provides coverage for
medications pursuant to step therapy or fail first protocol shall be
subject to the following requirements:
(1) The health insurer shall have an expeditious process in place
to authorize exceptions to step therapy when medically necessary and
to conform effectively and efficiently to continuity of care.
(2) The duration of any step therapy or fail first protocol shall
be consistent with up-to-date evidence-based outcomes and
current published peer-reviewed , scientific,
medical and pharmaceutical literature
evidence .
(3) The health insurer shall not require a patient to try and fail
on more than two medications before allowing the patient access to
the medication, or generically equivalent drug, prescribed by the
prescribing provider, unless the FDA-approved label indication,
peer-reviewed, scientific, medical and pharmaceutical evidence,
or clinical research trials focusing on clinical outcomes, supports
that more than two prior therapies should be used before using the
requested medications.
(4) In circumstances where an insured is changing plans or
policies, the new plan or policy shall not require the insured to
repeat step therapy when that insured is already being treated for a
medical condition by a prescription drug provided that the drug is
appropriately prescribed and is considered safe and effective for the
insured's condition.
(b) For purposes of this section, the following shall apply:
(1) "Prescribing provider" shall include a provider who is
authorized to write a prescription, as described in subdivision (a)
of Section 4040 of the Business and Professions Code, to treat a
medical condition of an insured.
(2) "Generically equivalent drug" means a drug product with the
same active chemical ingredients of the same strength, quantity, and
dosage form, and of the same generic drug name, as determined by the
United States Adopted Names Council and accepted by the federal Food
and Drug Administration, as those drug products having the same
chemical ingredient.
(c) This section does not prohibit a health insurer from charging
an insured or policyholder a copayment , co
insurance, or a deductible for prescription drug benefits or
from setting forth, by contract, limitations on maximum coverage of
prescription drug benefits, provided that the copayments,
coinsurances, deductibles, or limitations are reported to, and
held unobjectionable by, the commissioner and communicated to the
insured or policyholder pursuant to the disclosure provisions of
Section 10603.
(d) Nothing in this section shall be construed to require coverage
of prescription drugs not in an insurer's drug formulary or to
prohibit generically equivalent drugs or generic drug substitutions
as authorized by Section 4073 of the Business and Professions Code.
(e) This section shall not apply to accident-only, specified
disease, hospital indemnity, Medicare supplement, dental-only, or
vision-only health insurance policies.
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.