BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:   April 19, 2016


                            ASSEMBLY COMMITTEE ON HEALTH


                                   Jim Wood, Chair


          AB 2050  
          (Steinorth) - As Amended March 18, 2016


          SUBJECT:  Health care coverage:  prescription drugs:  refills.


          SUMMARY:  Requires a health care service plan (health plan)  
          contract or insurance policy that provides prescription drug  
          coverage, to implement a medication synchronization policy.   
          Specifically, this bill:  


          1)Requires a health plan contract or insurance policy, issued,  
            amended, or renewed on or after January 1, 2017, that provides  
            coverage for prescription drug benefits shall implement a  
            synchronization policy for the dispensing of prescription  
            drugs to the plan's enrollees.


          2)Defines synchronization policy as a procedure for aligning the  
            refill dates of an enrollee's or insured's prescription drugs  
            so that prescriptions are refilled at the same frequency may  
            be refilled concurrently.  


          EXISTING LAW:  


          1)Requires health care service plans to be regulated by the  








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            Department of Managed Health Care and health insurers to be  
            regulated by the California Department of Insurance.

          2)Provides for the licensure and regulation of pharmacists by  
            the California State Board of Pharmacy and prohibits the  
            refilling of a prescription without the authorization of the  
            prescriber, except as specified.

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

          4)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.
          
          5)Requires, under regulations, a plan that provides coverage for  
            prescription drugs through a mail order pharmacy to have  
            written policies and procedures documenting that the plan's  
            mail order arrangements are in compliance with applicable  
            California and federal laws regarding pharmacists and pharmacy  
            services. 

          6)Requires, under regulations, the mail order pharmacy process  
            to conform effectively and efficiently to a plan's processes  
            for prior authorization for coverage of medically necessary  
            drugs as required, and to include standards for timely  
            delivery and a contingency mechanism for providing the drug if  
            a mail order provider fails to meet the delivery standards.


          FISCAL EFFECT:  This bill has yet to be analyzed by a fiscal  
          committee.  


          COMMENTS:  








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          1)PURPOSE OF THIS BILL.  The author states that existing law  
            does not require health plans or insurers to establish  
            policies for prescription refill synchronization.   
            Synchronization is possible, but typically, a pharmacist does  
            a partial-fill of a prescription in order to synchronize the  
            fill date with the next medication (from then on, it can be  
            filled regularly). According to the author, the partial-fill  
            often triggers a sort of "red flag" to insurance plans, who  
            then have to go through an approval process to allow the  
            partial-fill.  This is burdensome and time consuming for both  
            pharmacists as well as insurance providers, discouraging  
            pharmacists to offer synchronization services to patients.   
            Additionally, health plans do not currently offer pro-rated  
            co-payments for patients receiving a partial fill, unless they  
            are covered under Medicare Part D, under which it is required.  
             This causes patients to pay an additional, full co-payment,  
            even though they are not receiving any additional medication.

          The lack of a streamlined process makes it difficult for  
            pharmacists and other healthcare providers to synchronize  
            refill dates, and results in increased out-of-pocket costs to  
            patients.  Streamlining prescription refill synchronization  
            makes it more convenient for patients to pick up all their  
            chronic medications on one trip to the pharmacy.  Establishing  
            one monthly refill date also enhances the ability of  
            pharmacists to assist patients in understanding and monitoring  
            their medications. According to the author, patients enrolled  
            in a refill synchronization program have been shown to be  
            three to six times more likely to remain adherent in taking  
            their medications. 

          Furthermore, the author states that medication non-adherence has  
            become a major public health issue in California and in the  
            United States. Studies show that 30 to 50 percent of Americans  
            with prescriptions for chronic illnesses do not take their  
            medications as prescribed. Poor medication adherence  
            significantly increases the risks of hospitalization,  








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            outpatient visits and death particularly among patients with  
            chronic diseases such as diabetes, hypertension and heart  
            disease.

          2)BACKGROUND.  A 2015 Journal of Managed Care & Specialty  
            Pharmacy study provided by the author to the Committee found  
            that appointment-based medication synchronization is  
            associated with greater adherence and persistence in patients  
            who had been taking chronic medications for at least six  
            months.  The study also found that after controlling for prior  
            adherence behavior between appointment-based medication  
            synchronization and patients without the synchronization, the  
            results still showed significant improvement in adherence and  
            persistence.  





             a)   Other states.  Twelve states have passed legislation  
               that requires health insurance companies to offer  
               prescription refill synchronization programs (Arizona,  
               Connecticut, Colorado, Kentucky, Maine, North Carolina, New  
               Jersey, New Mexico, Oregon, Utah, Vermont, and Washington).  
                In addition, several states currently have bills related  
               to synchronization for 2016.

             b)   Medicare Part D.  Beginning in 2014, Medicare Part D  
               Plans were required by Centers for Medicare & Medicaid  
               Services (CMS) to cover short refills and to prorate  
               patient copayments.  CMS states that it has taken a  
               meaningful step forward in its commitment to improving  
               medication adherence by making it easier for patients to  
               have their prescription medications "synchronized," or  
               refilled all at the same time.  By coordinating all of a  
               patient's medications to be refilled on the same day each  
               month, pharmacists are able to prevent gaps in therapy and  
               look for cost-saving alternatives, both of which can  
               improve adherence.








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             c)   California Health Benefits Review Program (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.  SB  
               125 (Ed Hernandez), Chapter 9, Statutes of 2015, added an  
               impact assessment on EHBs, and legislation that impacts  
               health insurance benefit designs, cost sharing, premiums,  
               and other health insurance topics.  



             AB 2418 (Bonilla and Skinner) of 2014 is substantially  
               similar to the provisions of this bill and would have  
               required health plans and insurers to cover prescription  
               drug refills intended to synchronize refill dates.  As part  
               of CHBRP's analysis of AB 2418, CHBRP defined medication  
               adherence as "...the extent to which patients take  
               medications as prescribed by their health care providers".   
               Direct measurement of adherence is very difficult as it  
               requires either observation of the patients actually taking  
               their medication or measurement of a metabolite of the  
               medication through laboratory testing. CHBRP finds  
               insufficient evidence to suggest that any of the provisions  
               in AB 2418, (which included opt-outs from mandatory mail  
               order, refill synchronization, or early refills for topical  
               ophthalmic products) would improve medication adherence.

             The Committee requested CHBRP to provide an updated analysis  
               on this bill and it found the evidence to be insufficient  
               to make a determination on effectiveness.  CHBRP also noted  
               that the additional statewide cost in the first post  
               mandate year for refill schedule synchronizing would be  








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               minimal.

          1)SUPPORT.  The California Pharmacists Association (CPhA), the  
            sponsor of this bill, states that one of the many problems  
            with medication nonadherence for individuals taking multiple  
            medications is that the refill schedule often has different  
            dates for different prescriptions resulting in multiple trips  
            to the pharmacy causing patient frustration and failure to  
            refill one or more medications. 2) According to CPhA, poor  
            medication adherence significantly increases the risks of  
            hospitalization, outpatient visits and death particularly  
            among patients with chronic diseases such as diabetes,  
            hypertension and heart disease.  Additionally, CPhA notes that  
            refill synchronization aligns with the Appointment Based Model  
            in which pharmacists are able to perform a comprehensive  
            review of all their patients' medications each month which  
            provides the opportunity to identify therapeutic and  
            compliance issues that a chronic patient may be encountering.   
            Furthermore, CPhA points out that in response to the CMS  
            requirement, the National Council for Prescription Drug  
            Programs (NCPDP) which is the entity that establishes all  
            pharmacy coding for health insurance plans and pharmacy  
            benefit managers (PBMs), established universal clarification  
            codes to help meet the market needs for prescription refill  
            synchronization.  Because the NCPDP codes are in place, all  
            commercial health plans in California should implement this  
            functionality to support medication synchronization for their  
            beneficiaries or enrollees.

          Congress of California Seniors (CCS) states that many seniors  
            take multiple medications prescribed by different specialists  
            during visits throughout the month, requiring several trips to  
            the pharmacy.  CCS contends that often seniors have limited  
            options for transportation making it difficult to get to the  
            pharmacy frequently and causing dangerous delays or lapses in  
            treatment.  Furthermore, CCS notes that about half of patients  
            with chronic health conditions such as heart disease,  
            diabetes, and glaucoma, do not take their medications as  
            directed.  As such, they do not benefit from prescribed  








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            treatments and are more likely to experience deteriorating  
            health and complications that require hospitalization, leading  
            to increased healthcare spending and a loss of independence.

          3)SUPPORT IF AMENDED.  The National Association of Chain Drug  
            Stores (NACDS) and the California Retailers Association (CRA)  
            are seeking an amendment to clarify that pharmacies would  
            continue to receive a dispensing fee when short filled  
            medications are used in synchronization.  NACDS and CRA state  
            that refill synchronization is a new methodology that will  
            allow for pharmacists to prescribe a partial prescription so  
            that the next refill will synchronize with existing  
            medications and its benefit includes enhancing the ability of  
            pharmacists to assist patients in monitoring and understanding  
            the prescribed medications.



          4)PREVIOUS LEGISLATION.


          
             a)   AB 339 (Gordon), Chapter 619, Statutes of 2015, requires  
               health plans and health insurers that provide coverage for  
               outpatient prescription drugs to have formularies that do  
               not discourage the enrollment of individuals with health  
               conditions, and requires combination antiretroviral drug  
               treatment coverage of a single-tablet that is as effective  
               as a multitablet regimen for treatment of Human  
               immunodeficiency virus infection and acquired immune  
               deficiency syndrome, as specified.  AB 339 places in state  
               law, federal requirements related to pharmacy and  
               therapeutics committees, access to in-network retail  
               pharmacies, standardized formulary requirements, formulary  
               tier requirements similar to those required of health plans  
               and insurers participating in Covered California and  
               copayment caps of $250 and $500 for a supply of up to 30  
               days for an individual prescription, as specified. 









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             b)   AB 2418 (Bonilla and Skinner) of 2014 would have  
               required 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.  AB 2418 also allows for early refills of  
               covered eye products.  AB 2418 was vetoed by the Governor  
               indicating that it lacked explicit patient consent before  
               changes are made to refills; nor did it speak to the  
               supportive elements that have made synchronization programs  
               anecdotally successful. 


             c)   AB 1917 (Gordon) of 2014 would have established limits  
               on the copayment, coinsurance, or any other form of cost  
               sharing for a covered outpatient prescription drug for an  
               individual prescription of 1/12 (equivalent to $529 for  
               2014) or half ($3,175 for 2014) of the annual out-of-pocket  
               limit (which is $6,350 for 2014), as specified under the  
               federal Patient Protection and Affordable Care Act with  
               respect to a non-grandfathered individual or group health  
               plan contract or insurance policy.  AB 1917 died in the  
               Senate.



             d)   SB 1176 (Steinberg) of 2014 required a health plan or  
               health insurer to track the accumulation of cost sharing  
               for covered EHBs and makes a health plan or insurer  
               responsible for notifying the enrollee or insured when the  
               maximum accrual limit has been reached and requires the  
               plan or insurer to reimburse the enrollee or insured if  
               cost sharing exceeds annual limits.  SB 1176 died in the  
               Assembly.
             









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             e)   AB 299 (Holden) of 2013 would have prohibited a pharmacy  
               that delivers prescriptions via mail, from entering into,  
               or being a party to, an agreement with a health care  
               service plan or disability insurer that requires a plan  
               enrollee or insured to utilize mail order services or that  
               requires a plan enrollee or insured to opt out of a mail  
               order process.  AB 299 was held on the Assembly  
               Appropriations Committee Suspense File.
             
             f)   AB 219 (Perea), Chapter 661, Statutes of 2013, limits  
               the total amount of copayments and coinsurance an enrollee  
               or insured is required to pay for orally administered  
               anticancer medications to $200 for an individual  
               prescription of up to a 30-day supply. AB 219 also provided  
               that the provisions would repeal on January 1, 2019.   
               Governor Brown wrote in signing message approving AB 219  
               that this policy is not without the potential for  
               unintended consequences and that placing a price cap on a  
               specific class of drugs for a specific class of diseases  
               might not be a policy for the ages.  A sunset on the bill  
               allows for examination of intended and unintended  
               consequences before embracing the policy long term.



             g)   SB 1301 (Ed Hernandez), Chapter 455, Statutes of 2012,  
               authorizes a pharmacist to dispense not more than a 90-day  
               supply of a dangerous drug other than a controlled  
               substance pursuant to a valid prescription, except for  
               psychotropic medication or drugs or controlled substances,  
               as specified.



             h)   SB 1195 (Price), Chapter 706, Statutes of 2012, requires  
               a contract that is issued, amended, or renewed on or after  
               January 1, 2013, between a pharmacy and a carrier or a PBM  
               to provide pharmacy services to beneficiaries of a health  
               benefit plan to comply with standards and audit  








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               requirements.



          5)POLICY COMMENTS.  The author notes that potential amendments  
            are being discussed to address the issues with respect to  
            cost-sharing and health plan's abilities to pro-rate cost  
            sharing for partially-filled prescriptions, and for health  
            plans to implement a system with expedited approval when  
            claims are submitted with the correct submission clarification  
            code for synchronization. Since Medicare Part D already  
            addressed and implements this pro-rated cost sharing, the  
            author is confident that these features are possible for plans  
            to implement without significant burdens. 
          


          REGISTERED SUPPORT / OPPOSITION:


          Support
          California Chronic Care Coalition
          California Pharmacists Association
          Congress of California Seniors
          Opposition
          None on file.  
          Analysis Prepared by:Kristene Mapile / HEALTH / (916) 319-2097




















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