BILL NUMBER: SB 1052 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 27, 2014
AMENDED IN SENATE APRIL 29, 2014
AMENDED IN SENATE MARCH 28, 2014
INTRODUCED BY Senator Torres
FEBRUARY 18, 2014
An act to amend Section 100503 of, and to add
Section 100503.1 to, to the Government
Code, to amend Sections 1363.01 and 1368.016 of, and to add Section
1367.205 to, the Health and Safety Code, and to amend Section
10123.199 of, and to add Section 10123.192 to, the Insurance Code,
relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
SB 1052, as amended, Torres. Health care coverage.
Existing law, the Knox-Keene Health Care Service Plan Act
(Knox-Keene 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 the act a crime. Existing law also
provides for the regulation of health insurers by the Department of
Insurance. The Knox-Keene Act requires a health care service plan
that provides prescription drug benefits and 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, as specified.
This bill would require a health care service plan or health
insurer that provides prescription drug benefits and maintains one or
more drug formularies to post those formularies on its Internet Web
site, update that posting within 24 hours after making any formulary
changes, use a standard template to display formularies, and include
in any published formulary, among other information, the prior
authorization or step edit requirements for, and the range of cost
sharing for, each drug included on the formulary. The bill would
authorize the Department of Managed Health Care and the Department of
Insurance to develop a standard formulary template and would require
plans and insurers to use that template to comply with specified
provisions of the bill. The bill would make other related conforming
changes. Because a willful violation of these requirements by a
health care service plan would be a crime, the bill would impose a
state-mandated local program.
Existing law establishes the California Health Benefit Exchange
within state government, specifies the powers and duties of the board
governing the Exchange, and requires the board to facilitate the
purchase of qualified health plans through the Exchange by qualified
individuals and small employers. Existing law requires the
board to undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange and to undertake outreach and enrollment activities that
seek to assist with enrolling in the Exchange in the least
burdensome manner. Existing law also requires the board of the
Exchange to annually prepare a written report on the implementation
and performance of the Exchange functions during the preceding fiscal
year, as specified, and requires that this report be submitted to
the Legislature and the Governor and be made available to the public
on the Internet Web site of the Exchange.
This bill, would also require the report to include the total
number of uninsured Californians as a percentage of the state
population and an independent evaluation of the marketing and
outreach and enrollment activities undertaken by the Exchange.
Existing law requires the board of the Exchange
to determine the minimum requirements a carrier
health care service plan or health insurer must meet to be
considered for participation in the Exchange and the standards and
criteria for selecting qualified health plans to be offered through
the Exchange that are in the best interests of qualified individuals
and qualified small employers.
This bill would require the board of the Exchange to ensure that
its Internet Web site provides a direct link to the formularies for
each qualified health plan offered through the Exchange that are
posted by carriers plans and insurers
pursuant to the bill's provisions. The bill would also require the
board , on or before January 1, 2016, to create a search
tool on its Internet Web site that allows potential enrollees to
search for qualified health plans by a particular drug and by a
particular therapeutic condition.
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 100503 of the Government
Code, as amended by Section 4 of Chapter 5 of the First Extraordinary
Session of the Statutes of 2013, is amended to read:
100503. In addition to meeting the minimum requirements of
Section 1311 of the federal act, the board shall do all of the
following:
(a) Determine the criteria and process for eligibility,
enrollment, and disenrollment of enrollees and potential enrollees in
the Exchange and coordinate that process with the state and local
government entities administering other health care coverage
programs, including the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, and California counties, in
order to ensure consistent eligibility and enrollment processes and
seamless transitions between coverage.
(b) Develop processes to coordinate with the county entities that
administer eligibility for the Medi-Cal program and the entity that
determines eligibility for the Healthy Families Program, including,
but not limited to, processes for case transfer, referral, and
enrollment in the Exchange of individuals applying for assistance to
those entities, if allowed or required by federal law.
(c) Determine the minimum requirements a carrier must meet to be
considered for participation in the Exchange, and the standards and
criteria for selecting qualified health plans to be offered through
the Exchange that are in the best interests of qualified individuals
and qualified small employers. The board shall consistently and
uniformly apply these requirements, standards, and criteria to all
carriers. In the course of selectively contracting for health care
coverage offered to qualified individuals and qualified small
employers through the Exchange, the board shall seek to contract with
carriers so as to provide health care coverage choices that offer
the optimal combination of choice, value, quality, and service.
(d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subsections (d) and (e) of Section 1302 of the federal act.
(e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five levels of
coverage contained in subsections (d) and (e) of Section 1302 of the
federal act. The board may require carriers to offer additional
products within each of those five levels of coverage. This
subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.
(f) (1) Except as otherwise provided in this section and Section
100504.5, require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:
(A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
(B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
(2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code between the Managed Risk
Medical Insurance Board and carriers for enrolled Healthy Families
beneficiaries or contracts entered into pursuant to Chapter 7
(commencing with Section 14000) of, or Chapter 8 (commencing with
Section 14200) of, Part 3 of Division 9 of the Welfare and
Institutions Code between the State Department of Health Care
Services and carriers for enrolled Medi-Cal beneficiaries. "Product"
also does not include a bridge plan product offered pursuant to
Section 100504.5.
(3) Except as required by Section 1301(a)(1)(C)(ii) of the federal
act, a carrier offering a bridge plan product in the Exchange may
limit the products it offers in the Exchange solely to a bridge plan
product contract.
(g) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
(h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
(i) Determine and approve cost-sharing provisions for qualified
health plans.
(j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent enrollment
and disenrollment activities for individuals enrolled in the
Exchange.
(k) Undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange. The board shall also undertake outreach and enrollment
activities that seek to assist enrollees and potential enrollees with
enrolling and reenrolling in the Exchange in the least burdensome
manner, including populations that may experience barriers to
enrollment, such as the disabled and those with limited English
language proficiency.
(l) Select and set performance standards and compensation for
navigators selected under subdivision (l) of Section 100502.
(m) Employ necessary staff.
(1) The board shall hire a chief fiscal officer, a chief
operations officer, a director for the SHOP Exchange, a director of
Health Plan Contracting, a chief technology and information officer,
a general counsel, and other key executive positions, as determined
by the board, who shall be exempt from civil service.
(2) (A) The board shall set the salaries for the exempt positions
described in paragraph (1) and subdivision (i) of Section 100500 in
amounts that are reasonably necessary to attract and retain
individuals of superior qualifications. The salaries shall be
published by the board in the board's annual budget. The board's
annual budget shall be posted on the Internet Web site of the
Exchange. To determine the compensation for these positions, the
board shall cause to be conducted, through the use of independent
outside advisors, salary surveys of both of the following:
(i) Other state and federal health insurance exchanges that are
most comparable to the Exchange.
(ii) Other relevant labor pools.
(B) The salaries established by the board under subparagraph (A)
shall not exceed the highest comparable salary for a position of that
type, as determined by the surveys conducted pursuant to
subparagraph (A).
(C) The Department of Human Resources shall review the methodology
used in the surveys conducted pursuant to subparagraph (A).
(3) The positions described in paragraph (1) and subdivision (i)
of Section 100500 shall not be subject to otherwise applicable
provisions of the Government Code or the Public Contract Code and,
for those purposes, the Exchange shall not be considered a state
agency or public entity.
(n) Assess a charge on the qualified health plans offered by
carriers that is reasonable and necessary to support the development,
operations, and prudent cash management of the Exchange. This charge
shall not affect the requirement under Section 1301 of the federal
act that carriers charge the same premium rate for each qualified
health plan whether offered inside or outside the Exchange.
(o) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the Exchange.
(p) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary of
Health and Human Services a report concerning that accounting.
Commencing January 1, 2016, the board shall conduct an annual audit.
(q) (1) (A) Annually prepare a written report on the
implementation and performance of the Exchange functions during the
preceding fiscal year, including, at a minimum, all of the following:
(i) The manner in which funds were expended and the progress
toward, and the achievement of, the requirements of this title.
(ii) Data provided by health care service plans and health
insurers offering bridge plan products regarding the extent of health
care provider and health facility overlap in their Medi-Cal networks
as compared to the health care provider and health facility networks
contracting with the plan or insurer in their bridge plan contracts.
(iii) The total number of uninsured Californians as a percentage
of the state population.
(iv) An evaluation of the effectiveness of the activities
undertaken pursuant to subdivision (k). This evaluation shall be
conducted by an independent entity selected by the board.
(B) The report required by this paragraph shall be transmitted to
the Legislature and the Governor and shall be made available to the
public on the Internet Web site of the Exchange. A report made to the
Legislature pursuant to this paragraph shall be submitted pursuant
to Section 9795.
(2) The Exchange shall prepare, or contract for the preparation
of, an evaluation of the bridge plan program using the first three
years of experience with the program. The evaluation shall be
provided to the health policy and fiscal committees of the
Legislature in the fourth year following federal approval of the
bridge plan option. The evaluation shall include, but not be limited
to, all of the following:
(A) The number of individuals eligible to participate in the
bridge plan program each year by category of eligibility.
(B) The number of eligible individuals who elect a bridge plan
option each year by category of eligibility.
(C) The average length of time, by region and statewide, that
individuals remain in the bridge plan option each year by category of
eligibility.
(D) The regions of the state with a bridge plan option, and the
carriers in each region that offer a bridge plan, by year.
(E) The premium difference each year, by region, between the
bridge plan and the first and second lowest cost plan for individuals
in the Exchange who are not eligible for the bridge plan.
(F) The effect of the bridge plan on the premium subsidy amount
for bridge plan eligible individuals each year by each region.
(G) Based on a survey of individuals enrolled in the bridge plan:
(i) Whether individuals enrolling in the bridge plan product are
able to keep their existing health care providers.
(ii) Whether individuals would want to retain their bridge plan
product, buy a different Exchange product, or decline to purchase
health insurance if there was no bridge plan product available. The
Exchange may include questions designed to elicit the information in
this subparagraph as part of an existing survey of individuals
receiving coverage in the Exchange.
(3) In addition to the evaluation required by paragraph (2), the
Exchange shall post the items in subparagraphs (A) to (F), inclusive,
on its Internet Web site each year.
(4) In addition to the report described in paragraph (1), the
board shall be responsive to requests for additional information from
the Legislature, including providing testimony and commenting on
proposed state legislation or policy issues. The Legislature finds
and declares that activities including, but not limited to,
responding to legislative or executive inquiries, tracking and
commenting on legislation and regulatory activities, and preparing
reports on the implementation of this title and the performance of
the Exchange, are necessary state requirements and are distinct from
the promotion of legislative or regulatory modifications referred to
in subdivision (d) of Section 100520.
(r) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
(s) Exercise all powers reasonably necessary to carry out and
comply with the duties, responsibilities, and requirements of this
act and the federal act.
(t) Consult with stakeholders relevant to carrying out the
activities under this title, including, but not limited to, all of
the following:
(1) Health care consumers who are enrolled in health plans.
(2) Individuals and entities with experience in facilitating
enrollment in health plans.
(3) Representatives of small businesses and self-employed
individuals.
(4) The State Medi-Cal Director.
(5) Advocates for enrolling hard-to-reach populations.
(u) Facilitate the purchase of qualified health plans in the
Exchange by qualified individuals and qualified small employers no
later than January 1, 2014.
(v) Report, or contract with an independent entity to report, to
the Legislature by December 1, 2018, on whether to adopt the option
in Section 1312(c)(3) of the federal act to merge the individual and
small employer markets. In its report, the board shall provide
information, based on at least two years of data from the Exchange,
on the potential impact on rates paid by individuals and by small
employers in a merged individual and small employer market, as
compared to the rates paid by individuals and small employers if a
separate individual and small employer market is maintained. A report
made pursuant to this subdivision shall be submitted pursuant to
Section 9795.
(w) With respect to the SHOP Program, collect premiums and
administer all other necessary and related tasks, including, but not
limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.
(x) Require carriers participating in the Exchange to immediately
notify the Exchange, under the terms and conditions established by
the board when an individual is or will be enrolled in or disenrolled
from any qualified health plan offered by the carrier.
(y) Ensure that the Exchange provides oral interpretation services
in any language for individuals seeking coverage through the
Exchange and makes available a toll-free telephone number for the
hearing and speech impaired. The board shall ensure that written
information made available by the Exchange is presented in a plainly
worded, easily understandable format and made available in prevalent
languages.
(z) This section shall become inoperative on the October 1 that is
five years after the date that federal approval of the bridge plan
option occurs, and, as of the second January 1 thereafter, is
repealed, unless a later enacted statute that is enacted before that
date deletes or extends the dates on which it becomes inoperative and
is repealed.
SEC. 2. Section 100503 of the Government Code,
as added by Section 5 of Chapter 5 of the First Extraordinary Session
of the Statutes of 2013, is amended to read:
100503. In addition to meeting the minimum requirements of
Section 1311 of the federal act, the board shall do all of the
following:
(a) Determine the criteria and process for eligibility,
enrollment, and disenrollment of enrollees and potential enrollees in
the Exchange and coordinate that process with the state and local
government entities administering other health care coverage
programs, including the State Department of Health Care Services, the
Managed Risk Medical Insurance Board, and California counties, in
order to ensure consistent eligibility and enrollment processes and
seamless transitions between coverage.
(b) Develop processes to coordinate with the county entities that
administer eligibility for the Medi-Cal program and the entity that
determines eligibility for the Healthy Families Program, including,
but not limited to, processes for case transfer, referral, and
enrollment in the Exchange of individuals applying for assistance to
those entities, if allowed or required by federal law.
(c) Determine the minimum requirements a carrier must meet to be
considered for participation in the Exchange, and the standards and
criteria for selecting qualified health plans to be offered through
the Exchange that are in the best interests of qualified individuals
and qualified small employers. The board shall consistently and
uniformly apply these requirements, standards, and criteria to all
carriers. In the course of selectively contracting for health care
coverage offered to qualified individuals and qualified small
employers through the Exchange, the board shall seek to contract with
carriers so as to provide health care coverage choices that offer
the optimal combination of choice, value, quality, and service.
(d) Provide, in each region of the state, a choice of qualified
health plans at each of the five levels of coverage contained in
subsections (d) and (e) of Section 1302 of the federal act.
(e) Require, as a condition of participation in the Exchange,
carriers to fairly and affirmatively offer, market, and sell in the
Exchange at least one product within each of the five levels of
coverage contained in subsections (d) and (e) of Section 1302 of the
federal act. The board may require carriers to offer additional
products within each of those five levels of coverage. This
subdivision shall not apply to a carrier that solely offers
supplemental coverage in the Exchange under paragraph (10) of
subdivision (a) of Section 100504.
(f) (1) Require, as a condition of participation in the Exchange,
carriers that sell any products outside the Exchange to do both of
the following:
(A) Fairly and affirmatively offer, market, and sell all products
made available to individuals in the Exchange to individuals
purchasing coverage outside the Exchange.
(B) Fairly and affirmatively offer, market, and sell all products
made available to small employers in the Exchange to small employers
purchasing coverage outside the Exchange.
(2) For purposes of this subdivision, "product" does not include
contracts entered into pursuant to Part 6.2 (commencing with Section
12693) of Division 2 of the Insurance Code between the Managed Risk
Medical Insurance Board and carriers for enrolled Healthy Families
beneficiaries or contracts entered into pursuant to Chapter 7
(commencing with Section 14000) of, or Chapter 8 (commencing with
Section 14200) of, Part 3 of Division 9 of the Welfare and
Institutions Code between the State Department of Health Care
Services and carriers for enrolled Medi-Cal beneficiaries.
(g) Determine when an enrollee's coverage commences and the extent
and scope of coverage.
(h) Provide for the processing of applications and the enrollment
and disenrollment of enrollees.
(i) Determine and approve cost-sharing provisions for qualified
health plans.
(j) Establish uniform billing and payment policies for qualified
health plans offered in the Exchange to ensure consistent enrollment
and disenrollment activities for individuals enrolled in the
Exchange.
(k) Undertake activities necessary to market and publicize the
availability of health care coverage and federal subsidies through
the Exchange. The board shall also undertake outreach and enrollment
activities that seek to assist enrollees and potential enrollees with
enrolling and reenrolling in the Exchange in the least burdensome
manner, including populations that may experience barriers to
enrollment, such as the disabled and those with limited English
language proficiency.
(l) Select and set performance standards and compensation for
navigators selected under subdivision (l) of Section 100502.
(m) Employ necessary staff.
(1) The board shall hire a chief fiscal officer, a chief
operations officer, a director for the SHOP Exchange, a director of
Health Plan Contracting, a chief technology and information officer,
a general counsel, and other key executive positions, as determined
by the board, who shall be exempt from civil service.
(2) (A) The board shall set the salaries for the exempt positions
described in paragraph (1) and subdivision (i) of Section 100500 in
amounts that are reasonably necessary to attract and retain
individuals of superior qualifications. The salaries shall be
published by the board in the board's annual budget. The board's
annual budget shall be posted on the Internet Web site of the
Exchange. To determine the compensation for these positions, the
board shall cause to be conducted, through the use of independent
outside advisors, salary surveys of both of the following:
(i) Other state and federal health insurance exchanges that are
most comparable to the Exchange.
(ii) Other relevant labor pools.
(B) The salaries established by the board under subparagraph (A)
shall not exceed the highest comparable salary for a position of that
type, as determined by the surveys conducted pursuant to
subparagraph (A).
(C) The Department of Human Resources shall review the methodology
used in the surveys conducted pursuant to subparagraph (A).
(3) The positions described in paragraph (1) and subdivision (i)
of Section 100500 shall not be subject to otherwise applicable
provisions of the Government Code or the Public Contract Code and,
for those purposes, the Exchange shall not be considered a state
agency or public entity.
(n) Assess a charge on the qualified health plans offered by
carriers that is reasonable and necessary to support the development,
operations, and prudent cash management of the Exchange. This charge
shall not affect the requirement under Section 1301 of the federal
act that carriers charge the same premium rate for each qualified
health plan whether offered inside or outside the Exchange.
(o) Authorize expenditures, as necessary, from the California
Health Trust Fund to pay program expenses to administer the Exchange.
(p) Keep an accurate accounting of all activities, receipts, and
expenditures, and annually submit to the United States Secretary of
Health and Human Services a report concerning that accounting.
Commencing January 1, 2016, the board shall conduct an annual audit.
(q) (1) (A) Annually prepare a written report on the
implementation and performance of the Exchange functions during the
preceding fiscal year, including, at a minimum, all of the following:
(i) The manner in which funds were expended and the progress
toward, and the achievement of, the requirements of this title.
(ii) The total number of uninsured Californians as a percentage of
the state population.
(iii) An evaluation of the effectiveness of the activities
undertaken pursuant to subdivision (k). This evaluation shall be
conducted by an independent entity selected by the board.
(B) The report required by this paragraph shall be transmitted to
the Legislature and the Governor and shall be made available to the
public on the Internet Web site of the Exchange. A report made to the
Legislature pursuant to this paragraph shall be submitted pursuant
to Section 9795.
(2) In addition to the report described in paragraph (1), the
board shall be responsive to requests for additional information from
the Legislature, including providing testimony and commenting on
proposed state legislation or policy issues. The Legislature finds
and declares that activities including, but not limited to,
responding to legislative or executive inquiries, tracking and
commenting on legislation and regulatory activities, and preparing
reports on the
implementation of this title and the performance of the Exchange, are
necessary state requirements and are distinct from the promotion of
legislative or regulatory modifications referred to in subdivision
(d) of Section 100520.
(r) Maintain enrollment and expenditures to ensure that
expenditures do not exceed the amount of revenue in the fund, and if
sufficient revenue is not available to pay estimated expenditures,
institute appropriate measures to ensure fiscal solvency.
(s) Exercise all powers reasonably necessary to carry out and
comply with the duties, responsibilities, and requirements of this
act and the federal act.
(t) Consult with stakeholders relevant to carrying out the
activities under this title, including, but not limited to, all of
the following:
(1) Health care consumers who are enrolled in health plans.
(2) Individuals and entities with experience in facilitating
enrollment in health plans.
(3) Representatives of small businesses and self-employed
individuals.
(4) The State Medi-Cal Director.
(5) Advocates for enrolling hard-to-reach populations.
(u) Facilitate the purchase of qualified health plans in the
Exchange by qualified individuals and qualified small employers no
later than January 1, 2014.
(v) Report, or contract with an independent entity to report, to
the Legislature by December 1, 2018, on whether to adopt the option
in Section 1312(c)(3) of the federal act to merge the individual and
small employer markets. In its report, the board shall provide
information, based on at least two years of data from the Exchange,
on the potential impact on rates paid by individuals and by small
employers in a merged individual and small employer market, as
compared to the rates paid by individuals and small employers if a
separate individual and small employer market is maintained. A report
made pursuant to this subdivision shall be submitted pursuant to
Section 9795.
(w) With respect to the SHOP Program, collect premiums and
administer all other necessary and related tasks, including, but not
limited to, enrollment and plan payment, in order to make the
offering of employee plan choice as simple as possible for qualified
small employers.
(x) Require carriers participating in the Exchange to immediately
notify the Exchange, under the terms and conditions established by
the board when an individual is or will be enrolled in or disenrolled
from any qualified health plan offered by the carrier.
(y) Ensure that the Exchange provides oral interpretation services
in any language for individuals seeking coverage through the
Exchange and makes available a toll-free telephone number for the
hearing and speech impaired. The board shall ensure that written
information made available by the Exchange is presented in a plainly
worded, easily understandable format and made available in prevalent
languages.
(z) This section shall become operative only if Section 4 of the
act that added this section becomes inoperative pursuant to
subdivision (z) of that Section 4.
SEC. 3. SECTION 1. Section 100503.1
is added to the Government Code, to read:
100503.1. (a) The board shall ensure that the Internet Web site
maintained under subdivision (c) of Section 100502 provides a direct
link to the formulary, or formularies, for each qualified health plan
offered through the Exchange that is posted by the carrier pursuant
to Section 1367.205 of the Health and Safety Code or Section
10123.192 of the Insurance Code.
(b) The On or before January 1, 2016, the
board shall create a search tool on the Internet Web site
maintained under subdivision (c) of Section 100502 that allows
potential enrollees to search for qualified health plans by a
particular drug and by a particular therapeutic condition.
SEC. 4. SEC. 2. Section 1363.01 of
the Health and Safety Code is amended to read:
1363.01. (a) Every plan that covers prescription drug benefits
shall provide notice in the evidence of coverage and disclosure form
to enrollees regarding whether the plan uses a formulary. The notice
shall be in language that is easily understood and in a format that
is easy to understand. The notice shall include an explanation of
what a formulary is, how the plan determines which prescription drugs
are included or excluded, and how often the plan reviews the
contents of the formulary.
(b) Every plan that covers prescription drug benefits shall
provide to members of the public, upon request, information regarding
whether a specific drug or drugs are on the plan's formulary. Notice
of the opportunity to secure this information from the plan,
including the plan's telephone number for making a request of this
nature and the Internet Web site where the formulary is posted under
Section 1367.205, shall be included in the evidence of coverage and
disclosure form to enrollees.
(c) Every plan shall notify enrollees, and members of the public
who request formulary information, that the presence of a drug on the
plan's formulary does not guarantee that an enrollee will be
prescribed that drug by his or her prescribing provider for a
particular medical condition.
SEC. 5. SEC. 3. Section 1367.205 is
added to the Health and Safety Code, to read:
1367.205. (a) In addition to the list required to be provided
under Section 1367.20, a health care service plan that provides
prescription drug benefits and maintains one or more drug formularies
shall do all of the following:
(1) Post the formulary or formularies for each product offered by
the plan on the plan's Internet Web site in a manner that is
accessible and searchable by potential enrollees, enrollees, and
providers.
(2) Update the formularies posted pursuant to paragraph (1) with
any change to those formularies within 24 hours after making the
change.
(3) Use a standard template to display the formulary or
formularies for each product offered by the plan. This template shall
do both of the following:
(A) Use the United States Pharmacopeia classification system.
(B) Organize drugs by therapeutic class, listing drugs
alphabetically.
(4) Include all of the following on any published formulary for
any product offered by the plan, including, but not limited to, the
formulary or formularies posted pursuant to paragraph (1) and the
list provided pursuant to Section 1367.20:
(A) Any prior authorization or step edit requirements for each
specific drug included on the formulary.
(B) The range of cost sharing for a potential enrollee of each
specific drug included on the formulary, as follows:
(i) Under $100 - $.
(ii) $100-$250 - $$.
(iii) $251-$500 - $$$.
(iv) Over $500 - $$$$.
(C) Identification of any drugs on the formulary that are
preferred over other drugs on the formulary.
(D) The notification described in subdivision (c) of Section
1363.01.
(b) The department may develop a standard formulary template
provided that the department consults with the Department of
Insurance on the template design. If the department develops this
template, a health care service plan shall use the template to comply
with paragraph (3) of subdivision (a).
(c) For purposes of this section, "formulary" means the complete
list of drugs preferred for use and eligible for coverage under a
health care service plan product and includes the drugs covered under
both the pharmacy benefit of the product and the medical benefit of
the product.
SEC. 6. SEC. 4. Section 1368.016 of
the Health and Safety Code is amended to read:
1368.016. (a) A health care service plan that provides coverage
for professional mental health services, including a specialized
health care service plan that provides coverage for professional
mental health services, shall, pursuant to subdivision (f) of Section
1368.015, include on its Internet Web site, or provide a link to,
the following information:
(1) A telephone number that the enrollee or provider can call,
during normal business hours, for assistance obtaining mental health
benefits coverage information, including the extent to which benefits
have been exhausted, in-network provider access information, and
claims processing information.
(2) A link to prescription drug formularies posted pursuant to
Section 1367.205, or instructions on how to obtain the formulary, as
described in Section 1367.20.
(3) A detailed summary that describes the process by which the
plan reviews and authorizes or approves, modifies, or denies requests
for health care services as described in Sections 1363.5 and
1367.01.
(4) Lists of providers or instructions on how to obtain the
provider list, as required by Section 1367.26.
(5) A detailed summary of the enrollee grievance process as
described in Sections 1368 and 1368.015.
(6) A detailed description of how an enrollee may request
continuity of care pursuant to subdivisions (a) and (b) of Section
1373.95.
(7) Information concerning the right, and applicable procedure, of
an enrollee to request an independent medical review pursuant to
Section 1374.30.
(b) Any modified material described in subdivision (a) shall be
updated at least quarterly.
(c) The information described in subdivision (a) may be made
available through a secured Internet Web site that is only accessible
to enrollees.
(d) The material described in subdivision (a) shall also be made
available to enrollees in hard copy upon request.
(e) Nothing in this article shall preclude a health care service
plan from including additional information on its Internet Web site
for applicants, enrollees or subscribers, or providers, including,
but not limited to, the cost of procedures or services by health care
providers in a plan's network.
(f) The department shall include on the department's Internet Web
site a link to the Internet Web site of each health care service plan
and specialized health care service plan described in subdivision
(a).
(g) This section shall not apply to Medicare supplement insurance,
Employee Assistance Programs, short-term limited duration health
insurance, Champus-supplement insurance, or TRI-CARE supplement
insurance, or to hospital indemnity, accident-only, and specified
disease insurance. This section shall also not apply to specialized
health care service plans, except behavioral health-only plans.
(h) This section shall not apply to a health care service plan
that contracts with a specialized health care service plan, insurer,
or other entity to cover professional mental health services for its
enrollees, provided that the health care service plan provides a link
on its Internet Web site to an Internet Web site operated by the
specialized health care service plan, insurer, or other entity with
which it contracts, and that plan, insurer, or other entity complies
with this section or Section 10123.199 of the Insurance Code.
SEC. 7. SEC. 5. Section 10123.192 is
added to the Insurance Code, to read:
10123.192. (a) A health insurer that provides prescription drug
benefits and maintains one or more drug formularies shall do all of
the following:
(1) Post the formulary or formularies for each product offered by
the insurer on the insurer's Internet Web site in a manner that is
accessible and searchable by potential insureds, insureds, and
providers.
(2) Update the formularies posted pursuant to paragraph (1) with
any change to those formularies within 24 hours after making the
change.
(3) Use a standard template to display the formulary or
formularies for each product offered by the insurer. This template
shall do both of the following:
(A) Use the United States Pharmacopeia classification system.
(B) Organize drugs by therapeutic class, listing drugs
alphabetically.
(4) Include all of the following on any published formulary for
any product offered by the insurer, including, but not limited to,
the formulary or formularies posted pursuant to paragraph (1):
(A) Any prior authorization or step edit requirements for each
specific drug included on the formulary.
(B) The range of cost sharing for a potential insured of each
specific drug included on the formulary, as follows:
(i) Under $100 - $.
(ii) $100-$250 - $$.
(iii) $251-$500 - $$$.
(iv) Over $500 - $$$$.
(C) Identification of any drugs on the formulary that are
preferred over other drugs on the formulary.
(D) A notification that the presence of a drug on the insurer's
formulary does not guarantee that an insured will be prescribed that
drug by his or her prescribing provider for a particular medical
condition.
(b) The department may develop a standard formulary template
provided that the department consults with the Department of Managed
Health Care on the template design. If the department develops this
template, a health insurer shall use the template to comply with
paragraph (3) of subdivision (a).
(c) For purposes of this section, "formulary" means the complete
list of drugs preferred for use and eligible for coverage under a
health insurance product and includes the drugs covered under both
the pharmacy benefit of the product and the medical benefit of the
product.
SEC. 8. SEC. 6. Section 10123.199 of
the Insurance Code is amended to read:
10123.199. (a) A health insurer that provides coverage for
professional mental health services shall establish an Internet Web
site. Each Internet Web site shall include, or provide a link to, the
following information:
(1) A telephone number that the insured or provider can call,
during normal business hours, for assistance obtaining mental health
benefits coverage information, including the extent to which benefits
have been exhausted, in-network provider access information, and
claims processing information.
(2) A link to prescription drug formularies posted pursuant to
Section 10123.192, or instructions on how to obtain formulary
information.
(3) A detailed summary description of the process by which the
insurer reviews and approves, modifies, or denies requests for health
care services as described in Section 10123.135.
(4) Lists of providers or instructions on how to obtain a provider
list as required by Section 10133.1.
(5) A detailed summary of the health insurer's grievance process.
(6) A detailed description of how the insured may request
continuity of care as described in Section 10133.55.
(7) Information concerning the right, and applicable procedure, of
the insured to request an independent medical review pursuant to
Section 10169.
(b) Except as otherwise specified, the material described in
subdivision (a) shall be updated at least quarterly.
(c) The information described in subdivision (a) may be made
available through a secured Internet Web site that is only accessible
to the insured.
(d) The material described in subdivision (a) shall also be made
available to insureds in hard copy upon request.
(e) Nothing in this article shall preclude an insurer from
including additional information on its Internet Web site for
applicants or insureds, including, but not limited to, the cost of
procedures or services by health care providers in an insurer's
network.
(f) The department shall include on the department's Internet Web
site, a link to the Internet Web site of each health insurer
described in subdivision (a).
(g) This section shall not apply to Medicare supplement insurance,
Employee Assistance Programs, short-term limited duration health
insurance, Champus-supplement insurance, or TRI-CARE supplement
insurance, or to hospital indemnity, accident-only, and specified
disease insurance. This section shall also not apply to specialized
health insurance policies, except behavioral health-only policies.
(h) This section shall not apply to a health insurer that
contracts with a specialized health care service plan, insurer, or
other entity to cover professional mental health services for its
insureds, provided that the health insurer provides a link on its
Internet Web site to an Internet Web site operated by the specialized
health care service plan, insurer, or other entity with which it
contracts, and that plan, insurer, or other entity complies with this
section or Section 1368.016 of the Health and Safety Code.
SEC. 9. SEC. 7. 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.