AB 374, as amended, Nazarian. Health care coverage: prescription drugs.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of that act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law imposes various requirements and restrictions on health care service plans and health insurers, including, among other things, requiring a health care service plan that provides prescription drug benefits to maintain an expeditious process by which prescribing providers, as described, may obtain authorization for a medically necessary nonformulary prescription drug, according to certain procedures.
This bill would prohibit a health care service plan or health insurer that provides medication pursuant to a step
therapy orbegin delete first-failend deletebegin insert fail-firstend insert requirement from applying that requirement to a patientbegin insert who has made a step therapy override determination requestend insert if, in the professional judgment of the prescribing physician, the step therapy orbegin delete first-failend deletebegin insert fail-firstend insert requirement would be medically inappropriate for that patientbegin insert for specified reasonsend insert.
Because a willful violation of these requirements with respect to health care service plans would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
begin insertThe Legislature finds and declares all of the
2following:end insert
3(a) Health care service plans and health insurers are
4increasingly making use of step therapy or fail-first protocols,
5hereafter referred to as step therapy protocol, under which patients
6are required to try one or more prescription drugs before coverage
7is provided for a drug selected by the patient’s health care
8provider.
9(b) Step therapy protocols, when they are based on
10well-developed scientific standards and administered in a flexible
11manner that takes into account the individual needs of patients,
12can play an important role in controlling health care costs.
13(c) In some cases, requiring a patient to follow a step therapy
14protocol may have adverse and even dangerous consequences for
15the patient who may either not realize a benefit from taking a
16prescription drug or may suffer harm from taking an inappropriate
17drug.
18(d) It is imperative that step therapy protocols preserve the
19health care provider’s right to make treatment decisions in the
20best interest of the patient.
21(e) Therefore, the Legislature declares it a matter of public
22interest that it require health care service plans and health insurers
23to base step therapy
protocols on appropriate clinical practice
24guidelines developed by professional medical societies with
25expertise in the condition or conditions under consideration, that
P3 1patients be exempt from step therapy protocols when inappropriate
2or otherwise not in the best interest of the patients, and that
3patients have access to a fair, transparent, and independent process
4for requesting an exception to a step therapy protocol when
5appropriate.
Section 1367.244 is added to the Health and Safety
8Code, to read:
begin insert(a)end insertbegin insert end insert A health care service plan that provides
10coverage for medications pursuant to a step therapy orbegin delete first-failend delete
11begin insert fail-firstend insert protocol shall not apply that requirement to a patientbegin insert who
12has made a step therapy override determination requestend insert if, in the
13professional judgment of the
prescribing physician, the step therapy
14orbegin delete first-failend deletebegin insert fail-firstend insert requirement would be medically inappropriate
15for that patientbegin insert for any of the reasons specified in subdivision (b)end insert.
16(b) A step therapy override determination request by a patient
17with adequate supporting rationale and documentation from the
18prescribing physician shall be expeditiously granted by the plan
19if any of the following apply:
20(1) The prescription drug required by the plan is contraindicated
21or will likely cause an adverse reaction by, or physical or mental
22harm to, the patient.
23(2) The prescription drug required by the plan is expected to
24be ineffective based on the known relevant physical or mental
25characteristics of the patient and the known characteristics of the
26prescription drug regimen.
27(3) The prescription drug required by the plan is
not in the best
28interest of the patient, based on medical appropriateness.
29(4) The patient is stable on a prescription drug selected by their
30health care provider for the medical condition under consideration.
31(5) The prescription drug required by the plan has not been
32approved by the federal Food and Drug Administration for the
33patient’s condition.
34(c) Upon the granting of a step therapy override determination,
35the health care service plan shall authorize coverage for the
36prescription drug prescribed by the patient’s treating health care
37provider, provided such prescription drug is a covered prescription
38drug under that policy or contract.
39(d) For purposes of this section, “step therapy override
40determination” means a determination as to whether a step therapy
P4 1protocol should apply in a particular patient’s situation, or whether
2the step therapy protocol should be overridden in favor of
3immediate coverage of
the health care provider’s selected
4prescription drug.
5(e) This section does not prevent a health care service plan from
6requiring a patient to try an AB-rated generic equivalent drug
7prior to providing coverage for the equivalent branded prescription
8drug. This section does not prevent a health care provider from
9prescribing a prescription drug that is determined to be medically
10appropriate.
Section 10123.197 is added to the begin deleteHealth and Safety end delete
13begin insertInsuranceend insert Code, to read:
begin insert(a)end insertbegin insert end insert A health insurer that provides coverage for
15medications pursuant to a step therapy orbegin delete first-failend deletebegin insert fail-firstend insert protocol
16shall not apply that requirement to a patientbegin insert who has made a step
17therapy override determination requestend insert if, in the professional
18judgment of the prescribing
physician, the step therapy orbegin delete first-failend delete
19begin insert fail-firstend insert requirement would be medically inappropriate for that
20patientbegin insert for any of the reasons end insertbegin insertspecified in subdivision (b)end insert.
21(b) A step therapy override determination request by a patient
22with adequate supporting rationale and documentation from the
23prescribing physician shall be expeditiously granted by the health
24insurer if any of the following apply:
25(1) The prescription drug required by the health insurer is
26contraindicated or will likely cause an adverse reaction by, or
27physical or mental harm to, the patient.
28(2) The prescription drug required by the health insurer is
29expected to be ineffective based on the known relevant physical
30or mental characteristics of the patient and the known
31characteristics of the prescription drug regimen.
32(3) The prescription drug required by the health insurer is not
33in the best interest of the patient, based on medical
34appropriateness.
35(4) The patient is stable on a prescription drug selected by his
36or her health care provider for the medical condition under
37consideration.
38(5) The prescription drug required by the health insurer has
39not been approved by
the federal Food and Drug Administration
40for the patient’s condition.
P5 1(c) Upon the granting of a step therapy override determination,
2the health insurer shall authorize coverage for the prescription
3drug prescribed by the patient’s treating health care provider,
4provided the prescription drug is a covered prescription drug
5under that policy.
6(d) For purposes of this section, “step therapy override
7determination” means a determination as to whether a step therapy
8protocol should apply in a particular patient’s situation, or whether
9the step therapy protocol should be overridden in favor of
10immediate coverage of the health care provider’s selected
11prescription drug.
12(e) This section does not prevent a health insurer from requiring
13a patient to try an AB-rated generic equivalent drug prior to
14providing coverage for the equivalent branded prescription drug.
15This section does not prevent a health care provider from
16prescribing a prescription drug that is determined to be medically
17appropriate.
18No reimbursement is required by this act pursuant to Section 6
19of Article XIII B of the California Constitution because the only
20costs that may be incurred by a local agency or school district will
21be incurred because this act creates a new crime or infraction,
22eliminates a crime or infraction, or changes the penalty for a crime
23or infraction, within the meaning of Section 17556 of the
24Government Code, or changes the definition of a crime
within the
25meaning of Section 6 of Article XIII B of the California
26Constitution.
No reimbursement is required by this act pursuant to
28Section 6 of Article XIII B of the California Constitution because
29the only costs that may be incurred by a local agency or school
30district will be incurred because this act creates a new crime or
31infraction, eliminates a crime or infraction, or changes the penalty
32for a crime or infraction, within the meaning of Section 17556 of
33the Government Code, or changes the definition of a crime within
34the meaning of Section 6 of Article XIII B of the California
35Constitution.
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