BILL ANALYSIS Ó AB 2752 Page 1 Date of Hearing: May 4, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2752 (Nazarian) - As Amended April 26, 2016 ----------------------------------------------------------------- |Policy |Health |Vote:|14 - 3 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- 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: AB 2752 Page 2 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 AB 2752 Page 3 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 AB 2752 Page 4