BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 1831             
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          |AUTHOR:        |Low                                            |
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          |VERSION:       |June 9, 2016                                   |
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          |HEARING DATE:  |June 22, 2016  |               |               |
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          |CONSULTANT:    |Teri Boughton                                  |
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           SUBJECT  :  Health care coverage: prescription drugs: refills

         SUMMARY  :1)  Requires a health plan contract or health insurance policy  
          issued, amended, or renewed on or after July 1, 2017 that  
          provides coverage for prescription drug benefits to allow for  
          early refills of covered topical ophthalmic products, as  
          specified. 
          
          Existing law:
          1)Regulates health plans by the Department of Managed Health  
            Care (DMHC) and health insurers by the California Department  
            of Insurance (CDI).  Establishes the Department of Health Care  
            Services to administer the Medi-Cal program.

          2)Requires health plans and health insurers that cover  
            prescription drug benefits to provide notice in the evidence  
            of coverage and disclosure form to enrollees/insureds  
            regarding whether the plan uses a formulary. 

          3)Mandates the ten federally required Essential Health Benefits  
            (EHBs) including prescription drug coverage and establishes  
            Kaiser Small Group health plan as California's EHB benchmark  
            plan for non-grandfathered individual and small group health  
            plan contracts and insurance policies.
          
          This bill:
          1)Requires a health plan contract or health insurance policy  
            issued, amended, or renewed on or after July 1, 2017 that  
            provides coverage for prescription drug benefits to allow for  
            early refills of covered topical ophthalmic products (TOPs)  
            according to the following standards:

                  a)        For a 30-day supply, at least 23 days and less  







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                    than 30 days from the later of either the original  
                    date that the prescription was distributed to the  
                    enrollee, or the date of the most recent refill that  
                    was distributed to the enrollee; 
                  b)        For a 90-day supply, at least 68 days and less  
                    than 90 days from the later of either the original  
                    date that the prescription was distributed to the  
                    enrollee or the date of the most recent refill that  
                    was disturbed to the enrollee; and, 
                  c)        The refills requested by the enrollee not  
                    exceed the number of additional quantities prescribed  
                    by the enrollee's participating health plan provider.

          2)Prohibits anything in this bill from being construed to  
            establish a new mandated benefit or to prevent the application  
            of deductible or copayment provisions in a plan contract.

           FISCAL  
          EFFECT  :  According to the Assembly Appropriations Committee:
          1)According to the California Health Benefits Review Program  
            (CHBRP): 


             a)   Costs of $360,000 to Medi-Cal (General Fund/federal) and  
               $4,000 to the California Public Employees' Retirement  
               System for increased premiums. 


             b)   Increased employer-funded premium costs in the private  
               insurance market of approximately $260,000.


             c)   Increased premium expenditures by employees and  
               individuals purchasing insurance of $200,000, and increased  
               out-of-pocket expenses of $110,000.


          2)Minor costs to CDI (Insurance Fund) and DMHC (Managed Care  
            Fund) to verify plans and insurers comply with this  
            requirement.


           PRIOR  
          VOTES  :  
          








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          |Assembly Floor:                     |71 - 8                      |
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          |Assembly Appropriations Committee:  |14 - 4                      |
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          |Assembly Health Committee:          |17 - 0                      |
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          COMMENTS  :
          1)Author's statement.  According to the author, TOPs are used to  
            treat a wide array of acute and chronic conditions, such as  
            glaucoma and conjunctivitis. Patients often have difficulty  
            self-administering the appropriate amount of eye drops,  
            thereby requiring early refills of their medication.  
            Interruptions in drug therapy for eye-related conditions  
            potentially have serious consequences, like irreversible  
            vision loss. Thus, AB 1831 seeks to provide better patient  
            outcomes by improving a patient's ability to adhere to  
            medication dispensing requirements. Moreover, this bill aligns  
            state law with federal Medicare guidelines as it relates to  
            refill standards for topical ophthalmic products.

          2)CHBRP analysis.  AB 1996 (Thomson, Chapter 795, Statutes of  
            2002), requests the University of California to assess  
            legislation proposing a mandated benefit or service and  
            prepare a written analysis with relevant data on the medical,  
            economic, and public health impacts of proposed health plan  
            and health insurance benefit mandate legislation. CHBRP was  
            created in response to AB 1996.  Below are key findings of  
            CHBRP's analysis.
            
            TOPs are a class of drugs that include eye drops and ointments  
            that are used to treat multiple eye diseases and conditions.  
            TOPs can be prescribed for both acute and chronic conditions.  
            Chronic eye conditions would include diseases with long-term  
            treatments, lasting months, years, or the rest of patients'  
            lives. AB 1831 would most likely affect a subset of patients  
            who require multiple refills of TOPs to treat chronic  
            diseases. 

            Studies using pharmacy claims data have shown that up to 90%  
            of glaucoma patients do not refill their TOP medication  
            consistently (i.e., in a way that would permit continuous  
            availability of TOPs) and that approximately 25% of patients  








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            may be without eye drops an average of 109 days per year  
            (Gurwitz et al., 1998; Nordstrom et al., 2005; Quigley and  
            Broman, 2006). However, these studies could not clarify the  
            reasons or consequences of refill inconsistency, such as if  
            this is due to behavioral factors or issues with obtaining a  
            refill, or if patients' vision was deteriorating as a result.  
            Specific to the issue of running out of TOP medication, 25% of  
            a sample of glaucoma patients reported experiencing any early  
            exhaustion of eye drop bottles (i.e., running out of eye drops  
            before they were due to be refilled), with 5% reporting early  
            bottle exhaustion five or more times a year (Moore et al.,  
            2014). Poor vision was a risk factor for early exhaustion  
            among those who run out at least five times per year. The top  
            reasons patients cited for early TOP exhaustion were that more  
            than one drop came out (31%), there was an insufficient amount  
            in the bottle (18%), or the drop size was too large or  
            inconsistent (18%) (Moore et al., 2014).

               a)     Enrollees.  CHBRP estimates that in 2017, 25.2  
                 million Californians will have health insurance that  
                 would be subject to AB 1831.
               b)     Impact on expenditures.  An increase of 0.0007% or  
                 $955,000 (premiums and cost sharing) would occur.
               c)     EHBs.  The mandate would alter the terms but not  
                 require new benefit coverage and so would not exceed  
                 EHBs.
               d)     Medical effectiveness.  There is insufficient  
                 evidence to suggest that the limited number of additional  
                 days of adherence made possible by AB 1831 would  
                 measurably impact the effectiveness of treatment or  
                 related health outcomes.
               e)     Benefit coverage.  The terms of coverage for 85% of  
                 enrollees would change, where coverage had been available  
                 for TOPs refills at and after 75% to 85% of projected  
                 use, refills would be covered at 70% of projected use.
               f)     Utilization.  Due to earlier refills, annual  
                 utilization of TOPs would increase by 0.5%.
               g)     Public health.  Due to insufficient medical  
                 effectiveness evidence and unlikely impact on adherence  
                 despite very limited increases in filled prescriptions,  
                 the public health impact on health outcomes, gender or  
                 racial/ethnic disparities, and premature death in the  
                 first year, post-mandate, is unknown.  CHBRP notes that  
                 the absence of evidence is not evidence of no effect. It  
                 is possible that an impact, positive or negative, could  








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                 result, but current evidence is insufficient to inform an  
                 estimate.

          3)Other states and Medicare.  According to CHBRP, there are laws  
            relevant to coverage for early refills for TOPs in a number of  
            other states, including AK, CT, KY, MO, NJ, NY, OR, RI, and  
            WY. 

          4)Medicare Part D.  On June 2, 2010 the Centers for Medicare &  
            Medicaid Services (CMS) released the following guidance to  
            Medicare Part D sponsors related to TOPs. "CMS is re-issuing  
            this guidance based on complaints we have received regarding  
            the application of early refill edits (i.e. refill-too-soon  
            edits) to TOPs. CMS recognizes that early refill edits are an  
            important utilization management tool used to promote  
            compliance and prevent waste. However, it is equally important  
            that Part D sponsors implement such edits in a manner that  
            does not unreasonably put beneficiaries at risk of  
            interruptions in drug therapy that potentially have serious  
            consequences. Part D sponsors need to take into consideration  
            differences that some dosage forms, such as topical  
            ophthalmics, present when establishing early refill edits.  
            Edits based on an algorithm that is appropriate for tablets  
            and capsules are not necessarily appropriate for other dosage  
            forms for which administration is not as easily measured and  
            controlled. This is not to say that Part D sponsors should not  
            implement early refill edits for such medications, especially  
            given that these edits can identify inappropriate use, but it  
            does mean that such edits need to reasonably accommodate waste  
            that can be anticipated given the nature of these products and  
            their self-administration among the Medicare patient  
            population. Part D sponsors also should be prepared to allow  
            overrides of these edits on a case-by-case basis when  
            appropriate and necessary to prevent unintended interruptions  
            in drug therapy."

          5)Related legislation.  AB 2050 (Steinorth) would require health  
            plans and health insurers to cover the synchronization of  
            prescription drugs under specified circumstances.  AB 2050 is  
            pending in the Senate Health Committee.

          6)Prior legislation.  AB 2418 (Bonilla of 2014), would have  
            required health plan contracts and health insurance policies  
            to allow for the synchronization of prescription refills, and  
            permit refill of topical ophthalmic medications at 70% of the  








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            predicted days of use, effective January 1, 2016.  AB 2418 was  
            vetoed by the Governor.  The Governor's veto message included  
            the following: "The bill would require health plans and  
            insurers to apply a prorated daily cost-sharing rate to the  
            refills of certain medications if the prescriber or pharmacist  
            indicates it is in the best interest of the patient and it is  
            for the purpose of synchronizing refill dates for the  
            patient's medications. The bill also allows for early refills  
            of covered eye products. While I understand the importance of  
            encouraging people to take their prescribed medications, the  
            bill lacks explicit patient consent before changes are made to  
            refills; nor does the bill speak to the supportive elements  
            that have made synchronization programs anecdotally  
            successful. Medication adherence is complicated. Solutions to  
            this problem will likely require a more holistic approach and  
            collaboration between doctors, patients, pharmacists and  
            health plans."

          7)Support.  The California Academy of Eye Physicians writes this  
            legislation is in patient's best interests, particularly for  
            anti-glaucoma and antibiotic agents that can be viewed as site  
            saving.  The California Optometric Association writes that CMS  
            stressed the necessity for early refills to prevent  
            interruptions in drug therapy that potentially have serious  
            consequences. According to the California Life Sciences  
            Association TOPs, such as eye drops, can be difficult to apply  
            and it is often common for patients to waste or use more eye  
            drops than necessary when drops hit their cheeks or two eye  
            drops come out at once.  They are used to treat a variety of  
            conditions including glaucoma, conjunctivitis, among others.   
            Diseases like glaucoma, when inadequately treated or  
            untreated, can result in irreversible vision impairment and  
            blindness.  The Community Health Partnership writes that when  
            a patient runs out of eye drops, a patient may have to pay the  
            full cost of the prescription if he or she runs out of eye  
            drops before the scheduled refill.  When faced with the option  
            of paying full price for the prescription or waiting until the  
            scheduled refill date, many low-income patients may choose to  
            go without the medication for weeks instead of paying out of  
            pocket.  Interruptions in drug therapy for eye-related  
            conditions potentially have serious consequences, including  
            irreversible vision loss.
          
           SUPPORT AND OPPOSITION  :
          Support:  California Academy of Eye Physicians and Surgeons  








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          (cosponsor)
                    California Optometric Association (cosponsor)
                    American Federation of State, county and Municipal  
                    Employees
                    California Life Sciences Association
                    California Pharmacists Association 
                    Community Health Partnership
                    Congress of California Seniors
                    Health Access California
                    Roots Community Health Center
                    Several Individuals
          
          Oppose:   None received


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