BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 1831 --------------------------------------------------------------- |AUTHOR: |Low | |---------------+-----------------------------------------------| |VERSION: |June 9, 2016 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |June 22, 2016 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Teri Boughton | --------------------------------------------------------------- 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 AB 1831 (Low) Page 2 of ? 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 : AB 1831 (Low) Page 3 of ? ----------------------------------------------------------------- |Assembly Floor: |71 - 8 | |------------------------------------+----------------------------| |Assembly Appropriations Committee: |14 - 4 | |------------------------------------+----------------------------| |Assembly Health Committee: |17 - 0 | | | | ----------------------------------------------------------------- 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 AB 1831 (Low) Page 4 of ? 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 AB 1831 (Low) Page 5 of ? 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 AB 1831 (Low) Page 6 of ? 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 AB 1831 (Low) Page 7 of ? (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 -- END --