BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 68| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 68 Author: Waldron (R) Amended: 8/18/15 in Senate Vote: 21 SENATE HEALTH COMMITTEE: 9-0, 7/15/15 AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth, Wolk SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen ASSEMBLY FLOOR: 78-0, 6/3/15 - See last page for vote SUBJECT: Medi-Cal SOURCE: Author DIGEST: This bill 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. AB 68 Page 2 ANALYSIS: 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 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 health plans licensed under the Knox-Keene Act (Medi-Cal plans, with the exception of county organized health systems and PACE (Program of All-inclusive Care for the Elderly) 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, under which enrollees may submit their grievances to the plan. AB 68 Page 3 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 sprocess 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 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 which the beneficiary is enrolled, that denial to be reviewed in accordance with the requirements of this bill. 2)Makes the denial by a Medi-Cal managed care plan of 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 subject to an urgent appeal process established by this bill, 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 FDA's labeling and use rules and regulations, as supported in at least one of the official compendia identified in federal Medicaid law; 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 urgent appeal in a case in which a plan denies coverage for a drug AB 68 Page 4 prescribed for the treatment of seizures and epilepsy and approved by the federal FDA for the use in the treatment of seizures and epilepsy. Requires an urgent appeal to be resolved by the plan within 24 hours after the plan receives the request. Requires the 24-hour period to be in addition to any time prescribed by federal law. 4)Defines an "urgent appeal" as an appeal in which the beneficiary, or treatment provider with the consent of the beneficiary, requests an urgent appeal either orally or in writing. 5)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. 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 AB 68 Page 5 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 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. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: 1)Likely one-time costs of up to $150,000 to make administrative changes by DHCS (General Fund and federal funds). DHCS indicates that it would need to update existing regulations, managed care plan contracts, Notice of Action forms, and appeals reporting templates. 2)Likely minor costs to monitor Medi-Cal managed care plan compliance with this bill's requirements by DHCS. 3)Unknown impact on the cost to provide prescription drugs by Medi-Cal managed care plans (General Fund and federal funds). Managed care plans create drug formularies as a way to control costs, by selecting low cost drugs and by increasing their bargaining power with drug companies. By creating a new appeals process to provide increased access to drugs that are not on Medi-Cal manage care plans' drug formularies, this bill may increase patient access to more expensive drugs and/or reduce the managed care plans' ability to negotiate discounts and rebates with drug manufacturers. The extent to which this will increase spending on prescription drugs is unknown. SUPPORT: (Verified8/28/15) AB 68 Page 6 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 OPPOSITION: (Verified8/28/15) California Association of Health Plans ARGUMENTS IN 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 writes in support that this bill 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 AB 68 Page 7 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 establishes a policy where a prescriber's reasonable professional judgment has the opportunity to prevail when prescribing a product for such a serious condition. This bill 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. ARGUMENTS IN OPPOSITION: The California Association of Health Plans (CAHP) writes it is opposed unless amended to this bill. CAHP argues this bill allows for an enrollee to request an expedited appeal process; however, no additional information regarding the enrollee is required to be submitted by the physician. In order to appropriately and effectively re-evaluate the use of the non-formulary drug, health plans require additional supporting documentation from the physician. CAHP states 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. ASSEMBLY FLOOR: 78-0, 6/3/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, AB 68 Page 8 Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins NO VOTE RECORDED: Jones-Sawyer, Thurmond Prepared by:Scott Bain / HEALTH / 8/31/15 8:33:21 **** END ****