BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 73
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|AUTHOR: |Waldron |
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|VERSION: |January 5, 2016 |
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|HEARING DATE: |June 29, 2016 | | |
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|CONSULTANT: |Scott Bain |
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SUBJECT : Patient Access to Prescribed Antiretroviral Drugs for
HIV/AIDS Treatment Act
SUMMARY : Requires the denial by a Medi-Cal managed care plan of a
non-formulary drug prescribed for the treatment of HIV/AIDS that
is approved by the federal Food and Drug Administration for use
in the treatment of HIV/AIDS to be subject to an urgent appeal
process established by this bill, if 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 labeling and use rules
and regulations.
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; and,
AB 73 (Waldron) Page 2 of ?
b) The dispensing of at least a 72-hour supply of
a covered outpatient drug in an emergency situation.
1)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.
2)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 a drug
used in the treatment of HIV/AIDS is prescribed by a Medi-Cal
beneficiary's treating provider for the treatment of HIV/AIDS,
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 this bill.
2)Requires the denial by a Medi-Cal managed care plan of a
non-formulary drug prescribed for the treatment of HIV/AIDS
that is approved by the federal Food and Drug Administration
AB 73 (Waldron) Page 3 of ?
(FDA) for use in the treatment of HIV/AIDS to be subject to an
urgent appeal process if 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.
3)Requires a beneficiary to be entitled to an urgent appeal in a
case in which a plan denies coverage for a drug prescribed for
the treatment of HIV/AIDS and approved by the FDA for use in
the treatment of HIV/AIDS.
4)Defines an "urgent appeal" as an appeal in which the
beneficiary, or treatment provider with the consent of the
beneficiary, requests an appeal either orally or in writing.
5)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.
6)States legislative intent in enacting this bill that a
Medi-Cal beneficiary have prompt access to medically necessary
antiretroviral drugs for use in the treatment of HIV/AIDS that
have been approved by the federal FDA for that purpose,
including drugs that are not on the formulary of a Medi-Cal
managed care plan or that are subject to prior authorization.
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.
PRIOR
VOTES :
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|Assembly Floor: |77 - 0 |
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|Assembly Appropriations Committee: |17 - 0 |
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|Assembly Health Committee: |19 - 0 |
AB 73 (Waldron) Page 4 of ?
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COMMENTS :
1)Author's statement. According to the author, formularies and
step-therapy programs are not always sufficient to treat
certain vulnerable populations. The federal government enacted
Medicare Part D, which included six protected classes of
therapeutic drugs. These categories and classes of drugs meet
two criteria: (1) where restrictions on that class would have
major or life threatening consequences and/or must be taken
for life; and (2) where there is a significant need for
disease or disorder to be treated by multiple drugs within a
specified class. 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. Antiretroviral Drugs for HIV/AIDS Treatment Act
would avoid drug resistance, spread of disease transmission,
etc. 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. This bill merely
allows Medi-Cal beneficiaries to use an expedited 24 hour
appeal process that would give them prompt access to medically
necessary drugs for Antiretroviral Drugs for HIV/AIDS
Treatment.
2)Medi-Cal coverage of HIV/AIDS medication and appeal rights in
managed care. The 2016-17 DHCS budget assumes average monthly
enrollment in Medi-Cal of over 14 million individuals, of whom
nearly three-fourths 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
AB 73 (Waldron) Page 5 of ?
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.
DHCS indicates HIV/AIDS drugs listed in the Medi-Cal Provider
Manuals are "carved out" of most Medi-Cal care plans and are
instead covered by Medi-Cal Fee-For-Service (FFS). This
includes Medi-Cal managed care plans in the two-plan model
counties, geographic managed care, county organized health
system (COHS) and primary care case management arrangements.
Exceptions to the "carve out" are two COHS plans (CalOptima
and Health Plan of San Mateo), and three specialty programs
also carve in some or all drugs in (AIDS Healthcare Foundation
has a subset of HIV/AIDS drugs carved-in to managed care,
while Senior Care Action Network (SCAN) and the Program for
All-Inclusive Care for the Elderly have all HIV/AIDS drugs
carved-in. DHCS indicates it has not received complaints
regarding health plans denying coverage for HIV/AIDS
medications.
3)Prior legislation. AB 68 (Waldron of 2015) would have required
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 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 was vetoed by Governor Brown. In this his veto
message, the Governor stated "health plans are already
required to have effective up-to-date drug formularies and
expedited appeal processes to cover situations when health
care services, including epilepsy drugs, are denied." Governor
Brown stated he believed "establishing a separate urgent
AB 73 (Waldron) Page 6 of ?
appeal for this specific medical condition is unnecessary".
4)Support. AIDS Healthcare Foundation (AHF) writes in support
that providers of medical care to persons with HIV/AIDS often
grapple with cost containment measures that can interfere with
the provider's decision about the best drug treatment for a
particular patient. However, ultimately a degree of deference
must be paid to the clinical decision by the provider.
Moreover, the patient is generally in need of swift
introduction of the drug in order to have a meaningful impact
on the patient's medical condition. AHF concludes that while
bill would ensure that the plan maintains authority to make
the ultimate decision, the urgent appeal process elevates the
denial to a degree that ensures a more timely and hopefully
more scrutinized decision.
5)Opposition. The Local Health Plans of California (LHPC) writes
in opposition that, while
LHPC agrees that consumers should be able to access medically
necessary medications, they do not believe a special process
for one set of drugs is necessary. In addition, Medi-Cal
health plans already have processes in place for expedited
appeals. LHPC also notes that HIV/AIDS drugs are carved out
for most of the Medi-Cal plans and provided through FFS
Medi-Cal, and as a result, they are uncertain whether this
bill will have any practical effect.
6)Policy question. Are denials of HIV/AIDS medications and
current appeal timeframes a problem? In most areas of the
state, HIV/AIDS drugs are "carved out" of Medi-Cal managed
care and are instead reimbursed through the Medi-Cal FFS
program, and DHCS indicates it has not had complaints
regarding Medi-Cal managed care plan denials of HIV/AIDS
medications.
SUPPORT AND OPPOSITION :
Support: AIDS Healthcare Foundation
California Life Sciences Association
Positive Resource Center
Retired Public Employees Association
Sunburst Projects
Two individuals
Oppose: California Association of Health Plans
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Local Health Plans of California
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