BILL NUMBER: AB 374 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 1, 2015
AMENDED IN SENATE JULY 16, 2015
AMENDED IN SENATE JUNE 19, 2015
AMENDED IN ASSEMBLY APRIL 30, 2015
AMENDED IN ASSEMBLY MARCH 2, 2015
INTRODUCED BY Assembly Member Nazarian
FEBRUARY 17, 2015
An act to add Section 1367.244 to the Health and Safety Code, and
to add Section 10123.197 to the Insurance Code, relating to health
care coverage.
LEGISLATIVE COUNSEL'S DIGEST
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 or health insurer
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 to
utilize a specified uniform prior authorization form or electronic
authorization process when requiring prior authorization for
prescription drug benefits .
This bill would require the Department of Managed Health Care and
the Department of Insurance to develop a step therapy override
determination request form by July, 2016, and would require a
prescribing provider to use the form to make a step therapy override
determination request. The bill would require a health care service
plan or health insurer to respond to a step therapy override
determination request within 72 hours for nonurgent requests, or
within 24 hours if exigent circumstances exist, as specified. The
bill would allow a determination by a health care service plan or
health insurer denying a request to be appealed through an
independent medical review process, as specified.
This bill would authorize a request for an exception to a health
care service plan's or health insurer's step therapy process for
prescription drugs to be submitted in the same manner as a request
for prior authorization for prescription drugs, and would require the
plan or insurer to treat, and respond to, the request in the same
manner as a request for prior authorization for prescription drugs.
The bill would require the Department of Managed Health Care and
the Department of Insurance to include a provision for step therapy
exception requests in the uniform prior authorization form specified
above.
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:
SECTION 1. Section 1367.244 is added to the
Health and Safety Code , to read:
1367.244. (a) A request for an exception to a health care service
plan's step therapy process for prescription drugs may be submitted
in the same manner as a request for prior authorization for
prescription drugs pursuant to Section 1367.241, and shall be treated
in the same manner, and shall be responded to by the health care
service plan in the same manner, as a request for prior authorization
for prescription drugs, including utilization of the grievance
process applicable to the denial of a request for prior authorization
for prescription drugs specified in Section 1368.
(b) The department and the Department of Insurance shall include a
provision for step therapy exception requests in the uniform prior
authorization form developed pursuant to subdivision (c) of Section
1367.241.
SEC. 2. Section 10123.197 is added to the
Insurance Code , to read:
10123.197. (a) A request for an exception to a health insurer's
step therapy process for prescription drugs may be submitted in the
same manner as a request for prior authorization for prescription
drugs pursuant to Section 10123.191, and shall be treated in the same
manner, and shall be responded to by the health insurer in the same
manner, as a request for prior authorization for prescription drugs,
including utilization of any grievance process applicable to the
denial of a request for prior authorization for prescription drugs.
(b) The department and the Department of Managed Health Care shall
include a provision for step therapy exception requests in the
uniform prior authorization form developed pursuant to subdivision
(c) of Section 10123.191.
SEC. 3. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SECTION 1. The Legislature finds and declares
all of the following:
(a) Health care service plans and health insurers are increasingly
making use of step therapy or fail-first protocols, hereafter
referred to as a step therapy protocol, under which patients are
required to try one or more prescription drugs before coverage is
provided for a drug selected by the patient's health care provider.
(b) Step therapy protocols, when they are based on well-developed
scientific standards and administered in a flexible manner that takes
into account the individual needs of patients, can play an important
role in controlling health care costs.
(c) In some cases, requiring a patient to follow a step therapy
protocol may have adverse and even dangerous consequences for the
patient who may either not realize a benefit from taking a
prescription drug or may suffer harm from taking an inappropriate
drug.
(d) It is imperative that step therapy protocols preserve the
health care provider's right to make treatment decisions in the best
interest of the patient.
(e) Therefore, the Legislature declares it a matter of public
interest that it require health care service plans and health
insurers to base step therapy protocols on appropriate clinical
practice guidelines developed by professional medical societies with
expertise in the condition or conditions under consideration, that
patients be exempt from step therapy protocols when inappropriate or
otherwise not in the best interest of the patients, and that patients
have access to a fair, transparent, and independent process for
requesting an exception to a step therapy protocol when appropriate.
SEC. 2. Section 1367.244 is added to the Health
and Safety Code, to read:
1367.244. (a) On or before July 1, 2016, the Department of
Managed Health Care and the Department of Insurance shall jointly
develop a step therapy override determination request form. On and
after January 1, 2017, or six months after the form is developed,
whichever is later, every prescribing provider shall use the step
therapy override determination request form to request a step therapy
override determination, and every health care service plan shall
accept that form as sufficient to request a step therapy override
determination. The Department of Managed Health Care and the
Department of Insurance shall develop the step therapy override
determination request form in a manner that allows it to be submitted
by a prescribing provider to a health care service plan by an
electronic method.
(b) A prescribing provider may request a step therapy override
determination if he or she determines that a prescription drug that
is subject to a step therapy or fail-first protocol by the health
care service plan is in the best interest of a patient, based on
medical appropriateness.
(c) If a health care service plan fails to utilize or accept the
override request form, or fails to respond within 72 hours for
nonurgent requests, or within 24 hours if exigent circumstances
exist, upon receipt of a completed override request from a
prescribing provider, pursuant to the submission of the override
request form developed pursuant to subdivision (a), the override
request shall be deemed to have been granted.
(d) A determination by a health care service plan to deny a step
therapy override request may be appealed through the independent
medical review process established pursuant to Article 5.55
(commencing with Section 1374.30), except that the decision of the
reviewers shall be rendered within three days of the receipt of the
information, as required for an expedited review as specified in
subdivision (c) of Section 1374.33.
SEC. 3. Section 10123.197 is added to the
Insurance Code, to read:
10123.197. (a) On or before July 1, 2016, the Department of
Insurance and the Department of Managed Health Care shall jointly
develop a step therapy override determination request form. On and
after January 1, 2017, or six months after the form is developed,
whichever is later, every prescribing provider shall use the step
therapy override determination request form to request a step therapy
override determination, and every health insurer shall accept that
form as sufficient to request a step therapy override determination.
The Department of Insurance and the Department of Managed Health Care
shall develop the step therapy override determination request form
in a manner that allows it to be submitted by a prescribing provider
to a health insurer by an electronic method.
(b) A prescribing provider may request a step therapy override
determination if he or she determines that a prescription drug that
is subject to a step therapy or fail-first protocol by the health
insurer is in the best interest of a patient, based on medical
appropriateness.
(c) If a health insurer fails to utilize or accept the override
request form, or fails to respond within 72 hours for nonurgent
requests, or within 24 hours if exigent circumstances exist, upon
receipt of a completed override request from a prescribing provider,
pursuant to the submission of the override request form developed
pursuant to subdivision (a), the override request shall be deemed to
have been granted.
(d) A determination by a health insurer to deny a step therapy
override request may be appealed through the independent medical
review process established pursuant to Article 3.5 (commencing with
Section 10169), except that the decision of the reviewers shall be
rendered within three days of the receipt of the information, as
required for an expedited review as specified in subdivision (c) of
Section 10169.3.
SEC. 4. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.