BILL ANALYSIS Ó
AB 2050
Page 1
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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