BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  May 4, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2752 (Nazarian) - As Amended April 26, 2016


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          Urgency:  No  State Mandated Local Program:  YesReimbursable:   
          No


          SUMMARY:


          This bill requires health plans and insurers to include, in  
          annual renewal materials, a notice to enrollees that a  
          prescription drug is no longer covered by the plan or has  
          changed tiers in the plan's drug formulary, if that is the case.  
          It also requires inclusion of information regarding a provider  
          directory or directories.


          FISCAL EFFECT:










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          Estimated costs to the Department of Managed Health Care of  
          $65,000 for the first year to assess the plans' processes,  
          policies, and procedures for identifying providers, drugs, and  
          impacted enrollees, and $390,000 in future years for enforcement  
          (Managed Care Fund). Ongoing costs in any given year could be  
          higher or lower depending on compliance and the level of  
          enforcement activity. 


          COMMENTS:


          1)Purpose. The author of this bill states that for people with  
            serious and chronic conditions, making sure that the health  
            insurance plan they choose covers the prescription drugs they  
            need is important.  This bill also builds upon recent  
            legislation relating to provider directories and requires the  
            plan or insurer to provide information about the plan's or  
            insurer's provider directories.


          2)Provider directories.  Existing law imposes requirements  
            related to provider directories. SB 137 (Hernandez), Chapter  
            649, Statutes of 2015, beginning July 1, 2016, requires DMHC  
            and the California Department of Insurance to develop uniform  
            provider directory standards.  The bill also requires a health  
            plan or insurer to ensure the accuracy of the information  
            contained in the directory or directories, and requires the  
            plan or insurer, at least annually, to review and update the  
            entire provider directory or directories for each product  
            offered.  Finally, it requires a health plan or health  
            insurer, at least weekly, to update its online provider  
            directory or directories, and requires a plan or insurer, at  
            least quarterly, to update its printed provider directory or  
            directories.  


          3)Prescription drugs.  Existing law imposes requirements related  
            to drug benefits, including transparency about what is  








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            covered. AB 339 (Gordon), Chapter 619, Statutes of 2015,  
            standardizes prescription drug tiers and setting cost-sharing  
            limits.  Additionally, SB 1052 (Torres), Chapter 575, Statutes  
            of 2014, requires health plans and insurers to use a standard  
            drug formulary template to display their drug formularies and  
            to post their formularies on their Web sites. This recent  
            legislation is currently being implemented. 


          4)Support. California Chronic Care Coalition (CCCC), the sponsor  
            of this bill, states that this bill will fill a continuity of  
            care gap by providing an important information tool for  
            consumers to better understand health plan changes.  CCCC  
            additionally states that this bill takes the first step to  
            ensure, at least at the point of plan or policy renewal, that  
            an enrollee or insured is notified of formulary and network  
            changes.  


          5)Opposition. Blue Shield of California opposes this bill,  
            citing lack of necessity and an increase in administrative  
            activities that will not add value.  They also state current  
            law requires health plans to notify a member when a drug is  
            moved from formulary to non-formulary.  



          Analysis Prepared by:Lisa Murawski / APPR. / (916)  
          319-2081


















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