BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 68
---------------------------------------------------------------
|AUTHOR: |Waldron |
|---------------+-----------------------------------------------|
|VERSION: |June 1, 2015 |
---------------------------------------------------------------
---------------------------------------------------------------
|HEARING DATE: |July 15, 2015 | | |
---------------------------------------------------------------
---------------------------------------------------------------
|CONSULTANT: |Scott Bain |
---------------------------------------------------------------
SUBJECT : Medi-Cal.
SUMMARY : Requires a Medi-Cal beneficiary to be entitled to an automatic
urgent appeal, as defined, when a Medi-Cal managed care plan
denies coverage for a drug prescribed for the treatment of
seizures and epilepsy that is approved by the Food and Drug
Administration (FDA) for the use in the treatment of seizures
and epilepsy if the patient's treating provider demonstrates
that in his or her reasonable, professional judgment, the drug
is medically necessary and consistent with FDA labeling and use
rules and regulations, as supported in at least one of the
official compendia, and the drug is not on the formulary of the
Medi-Cal managed care plan.
Existing law:
1)Establishes the Medi-Cal program, administered by the
Department of Health Care Services (DHCS), under which basic
health care services are provided to qualified low-income
persons.
2)Requires the mandatory enrollment of specified Medi-Cal
beneficiaries into Medi-Cal managed care plans.
3)Requires a Medi-Cal managed care plan that has prescription
drugs as one of its benefits and that enters into a contract
with DHCS to ensure the timely and efficient processing of
authorization requests for drugs, when prescribed for plan
enrollees, that are covered under the terms of the plan's
contract with DHCS and which require prior authorization from
the plan, by providing both of the following:
a) A response within 24 hours or one business day
to a request for prior authorization made by telephone
AB 68 (Waldron) Page 2 of ?
or other telecommunication device.
b) The dispensing of at least a 72-hour supply of
a covered outpatient drug in an emergency situation.
4)Requires, pursuant to regulation, Medi-Cal applicants or
beneficiaries to have the right to a state hearing (known as a
"fair hearing") if dissatisfied with any action or inaction of
the county department, DHCS or any person or organization
acting in behalf of the county or DHCS relating to Medi-Cal
eligibility or benefits.
5)Requires each Medi-Cal beneficiary to be informed in writing,
at the time of application to Requires health plans licensed
under the Knox-Keene Act (Medi-Cal plans, with the exception
of county organized health systems [COHS] and PACE plans are
required to be Knox-Keene licensed) to do all of the
following:
a) Establish and maintain a grievance system
approved by the Department of Managed Health Care
(DMHC), under which enrollees may submit their
grievances to the plan. Requires an expedited plan
review of grievances for cases involving an imminent
and serious threat to the health of the patient,
including, but not limited to, severe pain, potential
loss of life, limb, or major bodily function;
b) Maintain an expeditious process by which
prescribing providers may obtain authorization for a
medically necessary non-formulary prescription drug;
and,
c) Provide an enrollee with the opportunity to
seek an independent medical review (IMR) whenever
health care services have been denied, modified, or
delayed by the plan, or by one of its contracting
providers, if the decision was based in whole or in
part on a finding that the proposed health care
services are not medically necessary.
This bill:
1)Requires, to the extent permitted by federal law, if any drug
used in the treatment of seizures and epilepsy is prescribed
by a Medi-Cal beneficiary's treating provider for the
treatment of seizures and epilepsy, and coverage for that
prescribed drug is denied by a Medi-Cal managed care plan in
AB 68 (Waldron) Page 3 of ?
which the beneficiary is enrolled, that denial to be reviewed
in accordance with this bill.
2)Requires the denial by a Medi-Cal managed care plan of a drug
prescribed for the treatment of seizures and epilepsy that is
approved by the FDA for the use in the treatment of seizures
and epilepsy to be subject to the automatic urgent appeal
process, if:
a) The treating provider demonstrates, consistent
with federal law, that in his or her reasonable,
professional judgment, the drug is medically necessary
and consistent with the federal FDA's labeling and use
rules and regulations, as supported in at least one of
the official compendia; and,
b) The drug is not on the formulary for the
Medi-Cal managed care plan.
3)Requires a Medi-Cal beneficiary to be entitled to an automatic
urgent appeal in a case in which a plan denies coverage for a
drug prescribed for the treatment of seizures and epilepsy and
approved by the FDA for the use in the treatment of seizures
and epilepsy.
4)Defines an "automatic urgent appeal" as an appeal in which the
Medi-Cal managed care plan immediately notifies DHCS of the
denial of coverage, and the beneficiary is not required to
take any further action.
5)Requires an automatic urgent appeal to be resolved within 48
hours after denial by the plan. Requires the 48-hour period to
be in addition to any time prescribed by federal law.
6)States legislative intent that a Medi-Cal beneficiary have
prompt access to medically necessary drugs for use in the
treatment of seizures and epilepsy that have been approved by
the FDA for use in the treatment of seizures or epilepsy,
including drugs that are not on the formulary of a Medi-Cal
managed care plan or that are subject to prior authorization.
Requires this bill be known as the "Patient Access to
Prescribed Epilepsy Treatments Act."
FISCAL
EFFECT : According to the Assembly Appropriations Committee,
unknown, likely minor, potential increased administrative costs
AB 68 (Waldron) Page 4 of ?
for the fee-for-service Medi-Cal, and cost pressure to managed
care, for an additional number of appeals.
PRIOR
VOTES :
-----------------------------------------------------------------
|Assembly Floor: |78 - 0 |
|------------------------------------+----------------------------|
|Assembly Appropriations Committee: |17 - 0 |
|------------------------------------+----------------------------|
|Assembly Health Committee: |19 - 0 |
| | |
-----------------------------------------------------------------
COMMENTS :
1)Author's statement. According to the author, epilepsy is
life-threatening and the first treatment is typically the best
chance to get the disease under control. Formularies and
step-therapy programs are not always sufficient to treat
certain vulnerable populations. New pharmaceuticals and
treatments are emerging rapidly, while insurance formularies
do not have the capacity to keep up. In the meantime, patient
care is being affected and individuals are losing access to
receive the best pharmaceuticals that may control their
condition sooner rather than later. Current formulary
restrictions have multiple appeals processes patients have to
go through. Step therapy correspondingly delays the patient
from obtaining the most suitable drug combinations for their
case.
2)Background on epilepsy. According to the Centers for Disease
Control and Prevention, epilepsy is a disorder of the brain
that causes seizures. These seizures are not caused by a
temporary underlying medical condition such as a high fever.
Epilepsy can affect people in very different ways as there are
many causes and many different kinds of seizures. Some people
may have multiple types of seizures or other medical
conditions in addition to epilepsy. These factors play a major
role in determining both the severity of the person's
condition and the impact it has on his or her life. The way a
seizure looks depends on the type of seizure a person is
experiencing. Some seizures can look like staring spells.
Other seizures can cause a person to collapse, shake, and
AB 68 (Waldron) Page 5 of ?
become unaware of what is going on around them. Epilepsy can
be caused by different conditions that affect a person's
brain. For two in three people, the cause of epilepsy is
unknown. Some causes include stroke, brain tumor, traumatic
brain injury or head injury or central nervous infection. A
person with epilepsy is not contagious and cannot give
epilepsy to another person. According to the latest estimates,
about 1.8% of adults aged 18 years or older have had a
diagnosis of epilepsy or seizure disorder.
3)Prescription drug coverage and appeal rights in managed care.
The 2015-16 DHCS budget assumes average monthly enrollment in
Medi-Cal of 12.4 million individuals, of whom 9.5 million
individuals, or 76.6%, will enroll in Medi-Cal managed care
plans. By contract, Medi-Cal managed care plans are required
to cover prescription drugs except for those drugs which are
"carved out" and reimbursed through fee-for-service (FFS)
Medi-Cal ("carved out" drugs are typically costly). Plans are
contractually required to submit to DHCS a complete formulary,
and to report changes to the formulary to DHCS upon request
and on an annual basis. A plan's formulary is required to be
"comparable" to the Medi-Cal FFS list of contract drugs, with
"comparable" defined as the plan's formulary must contain
drugs which represent each mechanism of action sub-class
within all major therapeutic categories of prescription drugs
included in the Medi-Cal FFS List of Contract Drugs. Medi-Cal
managed care plans (and their contracting pharmacy benefit
managers) use formularies, prior authorization and utilization
controls to control costs, ensure appropriate utilization and
obtain rebates from drug manufacturers. Medi-Cal managed care
plans are required to meet state law, federal law and
contractual provisions relating to prescription drug coverage
and appeal rights. This includes an expedited process for the
plan grievance process for cases involving an imminent and
serious threat to the health of the enrollee, and through the
Department of Social Services (DSS) fair hearing process.
4)Related legislation. AB 73 (Waldron), would have required a
drug from one of four classes of drugs to be covered by
Medi-Cal if the treating provider demonstrates, that in his or
her reasonable, professional judgment, the drug is medically
necessary and consistent with the FDA's labeling and use rules
and regulations, and the drug is not on the formulary for the
Medi-Cal managed care plan. AB 73 was held on the Assembly
AB 68 (Waldron) Page 6 of ?
Appropriations Committee Suspense File.
AB 339 (Gordon) requires health plans and health insurers that
provide coverage for outpatient prescription drugs to
demonstrate that their formularies do not discourage the
enrollment of individuals with health conditions. Requires for
combination drug treatments that include antiretrovirals,
coverage of a single-tablet that is as effective as a
multitablet regimen unless a plan or insurer can demonstrate
that the multitablet regimen is clinically equally or more
effective and more likely to result in adherence to a drug
regimen. Requires individual market formulary coverage to be
the same or comparable to formularies maintained in the group
market. Places in state law, federal requirements related to
prior authorization response times, pharmacy and therapeutics
committees, access to in-network retail pharmacies,
standardized formulary requirements. Applies step therapy
requirements to health insurers that are currently applicable
to health plans through state regulations. Places in state law
formulary tier requirements similar but slightly different
than those required of health plans and insurers participating
in Covered California and copayment caps of $250 for a supply
of up to 30 days for an individual prescription, as specified,
consistent with those adopted by Covered California. AB 339 is
scheduled to be heard in the Senate Health Committee on July
15, 2015.
AB 374 (Nazarian) prohibits a health plan or insurer that
provides coverage for medications pursuant to a step therapy
or fail-first protocol from applying that requirement to a
patient who has made a step therapy override determination
request if, in the professional judgment of the prescribing
provider, the step therapy or fail-first requirement would be
medically inappropriate for that patient, as specified. AB 374
is scheduled to be heard in the Senate Health Committee on
July 15, 2015.
AB 1162 (Holden), requires tobacco cessation services to be a
covered benefit under the Medi-Cal program. Requires the
benefit to include unlimited quit attempts with no required
break between attempts, at least four tobacco cessation
counseling sessions per quit attempt, and a 90-day treatment
regimen of any prescription or over-the-counter medication
approved by the federal Food and Drug Administration for
tobacco cessation that was covered under the Medi-Cal program
AB 68 (Waldron) Page 7 of ?
as of January 1, 2015. Prohibits tobacco cessation medication
coverage for drugs covered under Medi-Cal as of January 1,
2015, from being subject to any barriers, requirements, or
restrictions, including, but not limited to, prior
authorization. AB 1162 is in the Senate Appropriations
Committee.
5)Prior legislation. AB 889 (Frazier, 2013), would have
prohibited plans and health insurers from requiring a patient
to try and fail on two medications before allowing the patient
access to the medication originally prescribed by the
patient's medical provider. AB 889 was held on the Suspense
File of the Senate Appropriations Committee.
AB 369 (Huffman, 2012), would have prohibited health plans and
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 generically equivalent drug, prescribed by the
provider. The Governor vetoed AB 369 because it did not strike
"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. If
current law does not suffice - and I am not certain that it
doesn't, any limitations on the practice of "step therapy"
should better reflect a health plan or insurer's legitimate
role in determining the allowable steps."
AB 1826 (Huffman, 2010), would have required plans and health
insurers that cover outpatient prescription drug benefits to
provide coverage for a drug that has been prescribed for the
treatment of pain. AB 1826 would have prohibited health plans
and insurers from requiring the subscriber or enrollee to
first use an alternative prescription drug or an
over-the-counter drug, as specified. AB 1826 was held on the
Suspense File of the Senate Appropriations Committee.
AB 1144 (Price, 2009), would have required plans and health
insurers that provide prescription drug benefits to submit
written reports about step therapy each year to DMHC and CDI.
AB 1144 was held on the Suspense File of the Assembly
Appropriations Committee.
AB 68 (Waldron) Page 8 of ?
6)Support. Epilepsy California writes in support that for the
majority of people living with epilepsy, anti-epilepsy
medications (anticonvulsants) are the most common and most
cost effective treatment for controlling and/or reducing
seizures. But there is no "one-size fits all" treatment option
for epilepsy, and the response to epilepsy medications can be
different for each person. Physicians must be able to use
their reasonable, professional judgment to prescribe
FDA-approved medications that are best for each patient, and
patients must gain timely access to these medications without
enduring a lengthy appeal process. Epilepsy California writes
that timely access to the most appropriate medications to
control their seizures will go a long way to reduce Medi-Cal
patients' admissions for emergency room intervention.
Sunovion Pharmaceuticals (Sunovion) writes in support that
this measure will help ensure patient access to medically
necessary treatment and care for seizures and epilepsy and
establishes a clear policy that will translate across all
managed care plans and help ensure that Medi-Cal patients have
equal access to drugs best suited to treat this serious
condition. Sunovion writes that without access to medically
necessary medications, patients are subjected to uncoordinated
and inappropriate treatment patterns often leading to
non-adherence and ultimately hospitalization. Sunovion states
that numerous studies have found that limiting access to
treatment options for epilepsy does not reduce overall health
care costs. Studies have shown that the primary driver of
direct costs associated with epilepsy treatment are attributed
to medical costs rather than anti-epileptic drug costs.
Sunovion writes that maintaining seizure control requires
careful evaluation and monitoring by the physician and
patient, and physicians treating epilepsy must be able to
prescribe drugs that are best for each patient, based on
independent clinical judgment, and this bill would establish a
policy where a prescriber's reasonable professional judgment
has the opportunity to prevail when prescribing a product for
such a serious condition. This measure will help ensure
patients in the Medi-Cal program will be able to promptly
access the most effective treatment - generic or branded - for
epilepsy and seizures, by ensuring that patient needs prevail
over "one size fits all" approaches to medication management.
AB 68 (Waldron) Page 9 of ?
7)Oppose unless amended. The California Association of Health
Plans (CAHP) writes it is opposed unless amended to this bill.
CAHP states this bill allows for an expedited appeal process;
however, no additional information regarding the enrollee is
required to be submitted by the physician. CAHP states that,
in order to appropriate and effectively re-evaluate the use of
the non-formulary drug, health plans require additional
supporting documentation from the physician. The absence of
additional supporting documentation during the expedited
review deflates the integrity of the expedited review process
because pharmacy managers will not have any new and relevant
supporting documentation. CAHP concludes that, in order for
health plans to vigorously review non-formulary requests
additional information must be required from physicians.
8)Policy issues.
a) Automatic urgent appeal and 48 hour timeframe.
Medi-Cal beneficiaries can appeal a Knox-Keene licensed
health plan denial by filing a grievance with the plan or
by filing a fair hearing request. The grievance process
includes an expedited process for a case involving an
imminent and serious threat to the health of the enrollee
(known as an urgent grievance). Plans are required to
provide a written statement to DMHC and the complainant
on the disposition or pending status of the urgent
grievance within three calendar days of receipt of the
grievance by the Plan. In addition, enrollees can appeal
urgent grievances directly to DMHC.
Medi-Cal managed care plans which require prior
authorization for prescription drugs are required to
provide a response within 24 hours or one business day to
a request for prior authorization made by telephone or
other telecommunication device. In addition, Medi-Cal
managed care plans are required to provide for the
dispensing of at least a 72-hour supply of a covered
outpatient drug in an emergency situation.
This bill has a 48-hour timeframe. In addition, under the
current appeals process, the burden is on the patient to
appeal the decision. Under this bill, when a drug has
been prescribed for the treatment of seizures and
epilepsy that is approved by the federal FDA for use in
the treatment of seizures and epilepsy that is denied by
a plan, there would be an automatic appeal.
AB 68 (Waldron) Page 10 of ?
The automatic appeal would benefit Medi-Cal beneficiaries
in that they would be relieved of the burden of filing
grievances and appeals. The author's office indicates the
reason for this provision is that, for a patient with
epilepsy who is potentially experiencing breakthrough
seizures resulting from impeded access to medically
necessary medication, none of the current appeal options
is timely following the denial by the plan. In addition,
the author indicates this bill is focused on unique and
critical disease states that are not like other medical
conditions because a breakthrough epileptic seizure can
have significant psychosocial and physical consequences
in employment, driving, and could lead to injury.
However, the automatic appeal approach raises several
policy questions, including:
i. Is there evidence the existing Medi-Cal
appeal mechanisms for the denial of prescription
medication are inadequate to warrant an automatic
appeal as this bill proposes?
ii. Should an automatic appeal only apply to
FDA-approved drugs for the treatment of seizures and
epilepsy?
iii. If drug denials are subject to an
automatic appeal, how does this affect Medi-Cal
managed care plan cost control measures?
b) Entity making decision on the appeal unclear. Under
this bill, if a plan denies coverage for an FDA-approved
drug prescribed for the treatment of seizures and
epilepsy, the beneficiary is entitled to an automatic
urgent appeal. The "automatic urgent appeal" means the
plan must immediately notify DHCS of the denial of
coverage, and the beneficiary is not required to take any
further action. An automatic urgent appeal is required to
be resolved within 48 hours after denial by the plan.
While DHCS is required to be notified of the denial, it
is unclear if the entity making the determination on the
automatic urgent appeal is DHCS or the plan. DHCS does
not have an automatic urgent appeal mechanism for
Medi-Cal managed care denials, and Medi-Cal fair hearing
appeals are handled by DSS. Amendments are needed to
clarify this provision.
AB 68 (Waldron) Page 11 of ?
SUPPORT AND OPPOSITION :
Support: American Federation of State, County and Municipal
Employees, AFL-CIO
Association of Regional Center Agencies
Biocom
California Chronic Care Coalition
California Healthcare Institute
California Life Sciences Association
Child Neurology Foundation
Disability Rights California
Epilepsy California
Sunovion Pharmaceuticals
Oppose: California Association of Health Plans (unless
amended)
-- END --