BILL ANALYSIS Ó
AB 73
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ASSEMBLY THIRD READING
AB
73 (Waldron)
As Amended January 5, 2016
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
|----------------+------+--------------------+--------------------|
|Health |19-0 |Bonta, Maienschein, | |
| | |Bonilla, Burke, | |
| | |Chávez, Chiu, | |
| | |Gomez, Gonzalez, | |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Lackey, Nazarian, | |
| | |Patterson, | |
| | | | |
| | | | |
| | |Ridley-Thomas, | |
| | |Rodriguez, | |
| | |Santiago, | |
| | |Steinorth, | |
| | |Thurmond, Waldron, | |
| | |Wood | |
| | | | |
|----------------+------+--------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bloom, Bonilla, | |
| | |Bonta, Calderon, | |
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| | |Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | |Eduardo Garcia, | |
| | |Holden, Jones, | |
| | |Quirk, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Establishes the Patient Access to Prescribed
Antiretroviral Drugs for human immunodeficiency virus (HIV) /
acquired immunodeficiency syndrome (AIDS) Treatment Act which
establishes an urgent appeal process if a Medi-Cal managed care
(MCMC) plan denies coverage for HIV/AIDS drugs that are prescribed
by a treating physician. Specifically, this bill:
1)Provides that the denial by a MCMC plan of a drug prescribed for
the treatment of HIV/AIDS is subject to the urgent appeal
process if the treating provider demonstrates that the drug is
medically necessary and consistent with the federal Food and
Drug Administration's (FDA) labeling and use rules and
regulations, and the drug is not on the formulary for the MCMC
plan.
2)Requires a MCMC plan to resolve an appeal within 24 hours after the
plan receives an oral or written appeal from the beneficiary or
treatment provider. Specifies that the 24-hour period is in
addition to any time prescribed by federal law.
3)States legislative intent for a Medi-Cal beneficiary to have prompt
access to medically necessary antiretroviral drugs for use in
the treatment of HIV/AIDS, including drugs that are not on the
formulary of a MCMC plan or that are subject to prior
authorization.
EXISTING LAW:
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1)Establishes in federal law the federal Medicaid program to
provide comprehensive health benefits to low income persons.
Establishes the Medi-Cal program as California's Medicaid
program, administered by the Department of Health Care Services
(DHCS).
2)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.
3)Provides a schedule of benefits provided in the Medi-Cal
program, including prescription drug benefits.
4)Authorizes the 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.
5)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.
6)Excludes from managed care, by administrative guidance of DHCS,
specified prescription drugs including those for HIV/AIDS and
antipsychotics.
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FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill will result in a likely minor one-time
increase in administrative costs in MCMC, and for DHCS state
administrative staff. Ongoing costs are likely to be fairly
minor. All costs are General Fund/federal funds.
COMMENTS: The intent of this bill is to shorten the time frame
for urgent appeals when coverage for HIV/AIDS drugs is denied
through MCMC.
Medicaid (Medi-Cal in California) 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.
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 MCMC plan. Examples of drugs
that are carved out include HIV/AIDS drugs, psychiatric drugs and
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blood factor. According to the DHCS, only five of the 22 managed
care plan contracts require coverage for HIV/AIDS drugs and
HIV/AIDS drugs are carved out for the remaining plans.
Medi-Cal currently has a process in place to appeal coverage
denials, both in managed care and fee-for-service. The expedited
appeal process under the managed care system, including denials
for HIV/AIDS drugs, is three business days or 72 hours.
It should be noted that the prior version of this bill is broader
in scope as to the types of drugs that an urgent appeal process
would apply to (Antiretroviral drugs for HIV/AIDS, antipsychotics,
antirejection drugs and drugs used to treat seizures or epilepsy)
and required the appeal to be resolved within 48 hours after
denial. This bill was subsequently amended in the Assembly
Appropriations Committee to limit its application to HIV/AIDS
drugs and requires the urgent appeal process to be resolved within
24 hours.
The AIDS Health Care Foundation states in support that the urgent
appeal process elevates the denial to a degree that ensures a
timelier and more scrutinized decision.
Opponents of the prior, broader version of this bill, including
Health Access California, state that MCMC already has appeal and
exception processes in place to provide consumers access to
medically necessary drugs. Health Access support standards for
formularies and appeal processes that assure the scientific
evidence and clinically based standards of care as well as the
needs of the individual consumer are taken into account.
Analysis Prepared by: Rosielyn Pulmano /
HEALTH / (916) 319-2097 FN: 0002581
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