BILL ANALYSIS Ó
AB 68
Page 1
Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
AB 68
(Waldron) - As Amended March 26, 2015
SUBJECT: Medi-Cal.
SUMMARY: Establishes that a prescriber's reasonable
professional judgment prevails over the policies and utilization
controls of the Medi-Cal program, including the utilization
controls of a Medi-Cal managed care plan, in prescribing a
pharmaceutical that is in the seizure or epilepsy drug class.
Specifically, this bill:
1)Requires any drug from the seizure or epilepsy drug class
prescribed by a Medi-Cal beneficiary's provider, the drug is
to be covered in the Medi-Cal program.
2)Requires a Medi-Cal managed care plan to cover a seizure or
epilepsy drug class if prescribed by a beneficiary's provider.
Requires the provider to demonstrate reasonable professional
judgment and that the drug is medically necessary and
consistent with the federal Food and Drug Administration (FDA)
labeling and use rules and regulations as described in at
least one of the official compendia named in federal law.
3)Provides that if a Medi-Cal managed care plan chooses not to
cover the specified drugs, the drugs are to be excluded from
the plan's financial responsibility and covered on a
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fee-for-service basis and the plan's contracted rate shall be
reduced accordingly.
EXISTING LAW:
1)Establishes in federal law the federal Medicaid program to
provide comprehensive health benefits to low income persons.
2)Establishes the Medi-Cal program as California's Medicaid
program.
3)Requires states, under the federal Medicaid law, to have a
drug use review program for covered outpatient prescription
drugs, to ensure drugs are appropriate, medically necessary,
and not likely to result in adverse medical effects. Federal
law requires the program to assess data on drug use against
predetermined standards, consistent with specified factors,
including compendia.
4)Provides a schedule of benefits provided in the Medi-Cal
program, including prescription drug benefits.
5)Authorizes the Department of Health Care Services (DHCS) to
establish utilization controls for any Medi-Cal services as
long as the controls are reasonably related to the purpose of
establishing them. Allows the utilization controls include
prior authorization, pre- and post-service audits, limitations
on the number of services and review pursuant to professional
standards.
6)Provides that any prescription drug approved by the FDA for
the treatment of AIDS or an AIDS-related condition is
automatically approved for placement on the contract list of
Medi-Cal drugs. Allows the DHCS to apply utilization controls
and conditions placement on the contract list on the
manufacturer signing a rebate agreement with the federal
Centers for Medicare and Medicaid Services (CMS).
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7)Provides that any prescription drug approved by the FDA for
the treatment of cancer is automatically approved for
placement on the contract list of Medi-Cal drugs. Conditions
placement on the contract list on the manufacturer signing a
rebate agreement with CMS.
8)Excludes from managed care, by administrative guidance of
DHCS, specified prescription drugs including those for
HIV/AIDS and antipsychotics.
FISCAL EFFECT: This bill has not been analyzed by a fiscal
committee.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, this bill, the
Patient Access to Prescribed Epilepsy Treatments Act,
strengthens the doctor and patient relationship by legislating
that a doctor's professional and reasonable judgment prevails
exclusively for epilepsy and seizure medications, to ensure
patient access to these treatments. This bill, would require,
to the extent permitted by federal law, that any drug in the
seizure or epilepsy therapeutic drug class would be a covered
benefit under the Medi-Cal program, more people move onto
Medi-Cal managed care plans, we are essentially growing a
two-tier system of healthcare. The author notes that current
formulary restrictions have multiple appeals processes
patients have to go through and step therapy correspondingly
delays the patient from obtaining the most suitable drug
combinations for their case. The author argues this bill is a
reasonable plan to stabilize those with life-threatening
conditions by ensuring access to care and protecting the
doctor/patient relationship for low income individuals. The
author notes those who can afford private insurance plans have
doctors who may have more time to work through the existing
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pre-authorization processes to attain a higher tier drug for
their patients, however, those in vulnerable low-income
situations are seeing their doctors most likely in clinics,
where doctors are short on time and do not have the resources
to follow-up on preauthorization appeals. The author
concludes this bill levels the playing field for access to
medically necessary drugs for low income patients with
serious, chronic or life threatening conditions by shortening
the pre-authorization process for Medi-Cal doctors.
2)MEDICAID BACKGROUND. Medicaid is a federal-state program that
pays for medical assistance for low-income individuals and
families. Although pharmacy coverage is an optional benefit
under federal Medicaid law, all states currently cover
outpatient prescription drugs for all categorically eligible
individuals and most other enrollees in their Medicaid
programs.
Most state Medicaid programs have adopted preferred drug lists
(PDL, also called formularies), making any medication not
deemed preferred subject to prior authorization. States use
prior authorization, in conjunction with a PDL, to encourage
the prescribing of the most clinically appropriate and
cost-effective drug within a specific therapeutic drug
category. Under federal law, non-preferred products must be
made available through a review process that must provide a
response within 24 hours and allow for a 72-hour supply of the
drug in emergency situations. The complexity of the prior
authorization process determines the extent to which it
encourages trials of preferred medications first (i.e., step
therapy).
Step therapy requirements under Medicaid programs vary by state
and by the prescribed drug or medical condition. Some states
have broad step therapy requirements for program participants.
For example, Pennsylvania has step therapy requirements for a
wide variety of drugs, including protein pump inhibitors,
anticonvulsants, anti-depressants, and others. Other states
have narrower requirements. Georgia requires insureds to fail
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on two older forms of antipsychotic medications before
receiving newer antipsychotic agents. Indiana has a step
therapy requirement for anti-hypertensives (i.e., drugs used
to address high blood pressure).
According to the federal CMS, a compendium is a listing of
FDA-approved drugs and biologics. A compendium includes a
summary of the pharmacologic characteristics of each drug or
biological, and may include information on dosage as well as
recommended or endorsed uses in specific diseases. A recent
change in federal law allows the Secretary of the federal
Department of Health and Human Services to revise the
statutory list of compendia as appropriate for identifying
medical accepted indications for drugs used in an anti-cancer
chemotherapeutic regimen in Medicare. Federal regulations
establish a process for listing compendia for determining
medically accepted uses of drugs in anti-cancer treatment,
including a formal written request for changes to the list of
compendia, publishing the list of the requests and soliciting
public comment, considering the compendium's attainment of the
Medicare coverage advisory committee's recommended desirable
characteristics of compendia, and considering the compendium's
grading of evidence. Federal Medicaid law requires a drug use
review program. The program is required to assess data on
drug use against pre-determined standards, consistent with
peer-reviewed medical literature and three statutorily listed
compendia.
3)PRESCRIPTION DRUGS IN MEDI-CAL. Medi-Cal is one of the
largest drug purchasers in the state. The program spends
about $4 billion on prescription drugs, including indirect
expenditures through payment to managed care plans and direct
expenditures in fee for service and for prescription drugs
that are "carved out" of managed care. Carved out means that
the state pays directly for the drug rather than indirectly
through a capitated or fixed rate payment to a Medi-Cal
managed care plan.
Drug spending has declined dramatically with the federal
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government taking greater financial responsibility with the
advent of Medicare Part D drug coverage. California used to
pay the prescription drug costs of dual eligibles, those
individuals who were on Medi-Cal and Medicare. However, the
spending on the remainder of beneficiaries has continued to
rise at a rapid rate.
Facing significantly rising costs, the federal and state
governments have grappled with various cost control measures.
California, to help manage costs, has established a formulary
for the fee-for service program. The formulary is not binding
on Medi-Cal managed care plans, each of which creates their
own formulary. A variety of utilization tools also are used.
These include limiting prescriptions to six per month,
although many beneficiaries receive more but only after a
prior authorization has been approved. Frequent and high cost
prescription drug users can be identified and case management
interventions can be used if appropriate to reduce drug costs.
Another tool to help reign in the high costs of prescription
drugs are the rebate programs. The federal government
collects a rebate from prescription drug manufacturers.
Manufacturers must pay a rebate to the federal government or
Medicaid will not cover their prescription drug. California
has been a national leader in the drug rebate program, being
one of the first states to negotiate with manufacturers a
"supplemental rebate" program. The program is so named
because the rebate is a supplement to the federal rebate
program. Manufacturers must agree to pay the state to have
their prescription drug placed on a preferred drug list which
usually means the drugs are available without prior
authorization. At one time the state received over a billion
dollars annually in net revenues through supplemental rebates.
The implementation of Part D has led to significant
decreases. In addition, with the increase in managed care,
the state no longer bears the direct cost of paying for
prescription drugs so supplemental rebates have declined more.
4)EPILEPSY AND SEIZURES. Epilepsy is a chronic disorder, the
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hallmark of which is recurrent, unprovoked seizures. Many
people with epilepsy have more than one type of seizure and
may have other symptoms of neurological problems as well.
Although the symptoms of a seizure may affect any part of the
body, the electrical events that produce the symptoms occur in
the brain. The location of that event, how it spreads and how
much of the brain is affected, and how long it lasts all have
profound effects. These factors determine the character of a
seizure and its impact on the individual. Having seizures and
epilepsy can affect one's safety, relationships, work, driving
and so much more. How epilepsy is perceived or how people are
treated can become a bigger problem than the seizures.
Anti-epileptic drugs (AEDs) are the main form of treatment for
people with epilepsy. And up to 70% people with epilepsy could
have their seizures completely controlled with AEDs. There are
around 25 AEDs used to treat seizures, and different AEDs work
for different seizures.
Besides epilepsy there are a variety of conditions and
substances can trigger seizures. Common causes include
congenital abnormalities of the brain, illicit drug use,
fever, brain tumors and metabolic imbalances, such as high
levels of glucose or sodium. Although epilepsy is a common
cause of seizures, most people who have a seizure have one
that is caused by a reason other than epilepsy.
5)DRUG CLASSES. A drug class is a group of drugs that have
something in common. They are similar in some way, but they
are not identical. A drug also belongs to one or more drug
classes. Drugs can be in a class with other drugs for several
reasons:
a) The drugs are related by their chemical structure;
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b) The drugs work in the same way; or,
c) The drugs are used for the same purpose.
Drug class grouping then are fairly narrow. Drugs from a
variety of classes are used to treat epilepsy and seizures.
6)NEW YORK PROVIDER PREVAILS LAW. In 2011, New York changed the
process by which 4 million Medicaid recipients obtain
prescription drug coverage. The pharmacy benefit was "carved
in" to managed care instead of a fee for service program.
This change resulted in patients losing many protections and
has led to confusion, lack of uniformity in coverage.
Patient advocates, health care providers and many members of the
New York State Legislature began fighting to restore certain
patient protections. Those protections including a
comprehensive drug formulary, standardization of drug
benefits, and maintaining the prescriber's authority to decide
what medicine a patient needs, frequently referred to as
"prescriber prevails" In 2012, the advocacy effort resulted
in restoration of "prescriber prevails" for atypical
antipsychotics in the 2012-2013 Executive Budget (effective
January 1, 2013). Later in 2013, the prescriber prevails
provision was restored for all drug classes.
7)SUPPORT. Supporters note that epilepsy is a serious medical
condition that produces seizures and one seizure can have
significant consequences, including head injury limitations in
driving or employment, hospitalization and sudden unexpected
death. They argue that failure to effectively manage epilepsy
and prevent breakthrough seizures results in higher costs to
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the Medi-Cal program and society through increased
hospitalizations, relapses and deteriorating conditions which
necessitate additional and expensive care. They conclude that
the goal of treating an in individual with epilepsy is to have
no seizures and no side effects and limiting availability of
medications appears to be a simple way of controlling costs of
patient care. Supporters conclude this approach potentially
jeopardizes both efficacy and safety.
8)OPPOSITION. Health Access California opposes this bill
because the approach in this bill eliminates the ability of
the Medi-Cal program to bargain over drugs costs. They point
out that since 1999 California has had a Medi-Cal formulary
which has saved the state literally billions of dollars while
providing consumers the drugs they need. Health Access also
argues that the bill goes too far in its reliance on physician
judgment as the sole determinant of what a patient needs,
particularly in an environment in which Pharmaceutical
manufacturers continue to engage in aggressive marketing of
their products. Health Access also points out that under
current law, the consumer has the right to medically necessary
prescriptions. The California Association of Health Plans
opposes AB 68 because it interferes with prior authorization.
They argue that plans use prior authorization in conjunction
with formulary management to encourage prescribing the most
clinically appropriate and cost-effective drugs within
specific therapeutic drug categories.
9)RELATED LEGISLATION. AB 73 (Waldron) of 2015, establishes
that a prescriber's reasonable professional judgment prevails
over the policies and utilization controls of the Medi-Cal
program, including the utilization controls of a Medi-Cal
managed care plan, in prescribing a pharmaceutical from
specified therapeutic drug classes. AB 73 is pending in this
Committee.
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10)PREVIOUS LEGISLATION.
a) AB 1814 (Waldron) of 2014 was very similar to AB 73. AB
1814 was held on the Assembly Appropriations Suspense file.
b) AB 889 (Frazier) of 2013 prohibits a health plan from
requiring an enrollee to try and fail on more than two
medications before allowing the enrollee access to the
medication, or generically equivalent drug, as specified.
This bill was held on the Senate Appropriations Committee
suspense file.
c) AB 369 (Huffman) of 2012 would have prohibited carriers
that restrict medications for the treatment of pain,
pursuant to step therapy or fail-first protocol, from
requiring a patient to try and fail on more than two pain
medications before allowing the patient access to the pain
medication, or generically equivalent drug, as defined,
prescribed by the prescribing provider, as defined. AB 369
was vetoed by Governor Brown, who stated:
While I sympathize with the author's good
intentions, I am not convinced that this bill
strikes the right balance between physician
discretion and health plan or insurer oversight.
A doctor's judgment and a health plan's clinical
protocols both have a role in ensuring the
prudent prescribing of pain medications.
Independent medical reviews are available to
resolve differences in clinical judgment when
they occur, even on an expedited basis.
d) AB 1826 (Huffman) of 2010 would have required an insurer
or health plan that covers prescription drug benefits to
provide coverage for a drug that has been prescribed for
the treatment of pain without first requiring the enrollee
or insured to use an alternative drug or product. AB 1826
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died on the Senate Appropriations Committee Suspense File.
11)POLICY COMMENT. This bill is among several that institute a
policy of provider prevails as a way of easing patient's
access to medications they believe are preferred. Bypassing
the utilization controls of the plan, they may result in
significant additional costs for the plan and perhaps for a
patient. Epilepsy is a very serious condition and the
possible impacts from seizures are significant and potentially
life-threatening. An alternative approach the committee may
want to consider is an expedited review by the plan, perhaps
something along the lines of an automatic urgent appeal to be
resolved within 48 hours.
12)PROPOSED AMENDMENT. The bill uses the term, "epilepsy and
seizure therapeutic drug class." This description encompasses
many drugs and drug classes, including pharmaceuticals which
have uses beyond the treatment of epilepsy and seizures. For
example, anticonvulsants, or antiseizure medications, an
important class of drugs for the treatment of epilepsy are
increasingly used to treat bipolar disorder because of their
effectiveness as a mood stabilizer. Given the language of the
bill, a prescription to treat bipolar disorder with an
anticonvulsant would be subject to the provisions of the
prescriber prevailing over a plan's formulary or other
utilization controls. A mood stabilizer from another class of
drugs would not be, which could distort prescribing decisions.
Similarly valium would be subject to the prescriber
prevailing regardless of the reason prescription was written
because it can be prescribed as an anticonvulsant for seizure
therapy, even though it is frequently prescribed as an
antianxiety drug. So a person being prescribed valium by
their physician would not be a decision subject to utilization
controls, regardless if the prescription was for epilepsy or
anxiety, but a person prescribed an antidepressant for anxiety
would be subject to the plan's utilization controls.
If the author's intent is to ease access for those people being
treated for epilepsy, the bill should be changed and wherever
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the term "if any drug in the seizure or epilepsy therapeutic
drug class" should be replaced with "if any drug is used in the
treatment of epilepsy.
REGISTERED SUPPORT / OPPOSITION:
Support
Child Neurology Foundation
Biocom
California Healthcare Institute
Sunovion Pharmaceuticals
Opposition
California Association of Health Plans
Health Access California
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Analysis Prepared by:Roger Dunstan / HEALTH / (916) 319-2097