BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 73 --------------------------------------------------------------- |AUTHOR: |Waldron | |---------------+-----------------------------------------------| |VERSION: |January 5, 2016 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |June 29, 2016 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Scott Bain | --------------------------------------------------------------- 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 : ----------------------------------------------------------------- |Assembly Floor: |77 - 0 | |------------------------------------+----------------------------| |Assembly Appropriations Committee: |17 - 0 | |------------------------------------+----------------------------| |Assembly Health Committee: |19 - 0 | AB 73 (Waldron) Page 4 of ? | | | ----------------------------------------------------------------- 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 AB 73 (Waldron) Page 7 of ? Local Health Plans of California -- END --