BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                         AB 68|
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                                   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

           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.


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          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  

          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.  


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                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  


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            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  

          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.

          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  

          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  


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            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)


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          American Federation of State, County and Municipal Employees,  
          Association of Regional Center Agencies
          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  


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          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  

          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,  


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            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

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