BILL ANALYSIS Ó
AB 374
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CONCURRENCE IN SENATE AMENDMENTS
AB
374 (Nazarian)
As Amended September 2, 2015
Majority vote
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|ASSEMBLY: |63-14 |(June 2, 2015) |SENATE: | 35-4 |(September 8, |
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Original Committee Reference: HEALTH
SUMMARY: Creates a process for prescribers to request an
override of a health plan or health insurer's step therapy
requirement.
The Senate amendments further the initial policy intent of this
bill, but delete the assembly-approved language that limited the
use of step therapy protocols and instead:
1)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.
2)Require the plan or insurer to treat, and respond to, the
request in the same manner as a request for prior
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authorization for prescription drugs.
3)Require the Department of Managed Health Care (DMHC) and the
Department of Insurance (CDI) to include a provision for step
therapy exception requests in the uniform prior authorization
form specified above.
FISCAL EFFECT: According to the Senate Appropriations
Committee, minor costs to CDI and DMHC to revise the existing
prior authorization form to allow it to be used for step therapy
override requests.
COMMENTS: According to the author, use of step therapy leads to
an exacerbation of a patient's condition, potentially causing
irreversible deterioration or damage to the patient, such as
limiting their daily functions and ability to remain a
productive member of the workforce and society. The author
asserts that a determination about whether a step therapy
protocol is appropriate should take into account the individual
needs and circumstances of the patient, along with the
professional judgment of the prescribing physician.
According to the California Health Benefits Review Program
(CHBRP), step therapy, or fail-first protocols, may be
implemented as methods of utilization management in a variety of
ways and are known by a number of terms. Step therapy, when
implemented by carriers, requires an enrollee to try a
first-line medication (often a generic alternative) prior to
receiving coverage for a second-line medication (often a
brand-name medication). A fail-first protocol may also be the
basis for part or all of a precertification or prior
authorization protocol, which may also require the prescribing
provider to confirm to the plan or insurer that an alternate
medication or medications have been unsuccessfully tried by the
patient before the coverage for the prescribed medication is
approved. However, not all prior authorization protocols have a
fail-first component. Some prior authorization protocols are
based on other criteria, such as intended use to treat a
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specific medical problem or diagnosis, or confirmation that the
patient meets other criteria such as age or specified
comorbidities.
There is a wide variation in the presence of step therapy
protocols among plans. According to CHBRP, approximately 3% of
covered enrollees have no outpatient drug benefits, and 34% have
drug benefits that are not subject to step therapy protocols.
Of the remaining 63% of enrollees with outpatient drug coverage,
the number of drugs subjected to Step Therapy Protocol varies
from two to more than 100.
Existing law provides certain protections for insured patients.
Under state regulation, a plan that requires step therapy must
have an expeditious process in place to authorize exceptions to
step therapy when medically necessary. Step therapy overrides
follow a procedure by which a prescriber submits clinical
documentation to the plan or insurer documenting why an enrollee
should be allowed to skip one or more of a protocol's steps.
In many plans, the step therapy override process is the same as
the prior authorization process. Step therapy override requests
may take several days to be reviewed by the plan or insurer.
For prior authorization, DMHC-regulated plans are required to
respond and issue authorization determinations within two
business days. CDI-regulated insurers are required to issue
nonurgent authorization determinations within five business
days. Urgent determinations must be made within 72 hours.
Existing regulations also state that a plan or insurer must
notify the patient of their right to appeal the dispute through
independent medical review.
Support and Opposition letters on file refer to a previous
version of this bill.
Analysis Prepared by: Dharia McGrew / HEALTH
/ (916) 319-2097 FN: 0002085
AB 374
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