Senate BillNo. 282


Introduced by Senator Hernandez

February 19, 2015


An act to amend Section 1367.241 of the Health and Safety Code, and to amend Section 10123.191 of the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

SB 282, as introduced, Hernandez. Health care coverage: prescription drugs.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Commonly referred to as utilization review, existing law governs the procedures that apply to every health care service plan and health insurer that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based on medical necessity, requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees or insureds, as specified. Existing law requires every prescribing provider, as defined, when requesting prior authorization for prescription drug benefits, to submit a prior authorization form developed jointly by the Department of Managed Health Care and the Department of Insurance to the health care service plan or health insurer, and requires those plans and insurers to accept only those prior authorization forms for prescription drug benefits. Existing law authorizes a prescribing provider to submit the form electronically to the plan or insurer.

This bill would authorize the prescribing provider to additionally use an electronic process developed specifically for transmitting prior authorization information that is consistent with the standardized form described above and that meets the National Council for Prescription Drug Programs’ SCRIPT electronic prior authorization standards. To the extent that the bill would thereby require plans and insurers to accept that form of submission, the bill would expand the scope of a crime and would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 1367.241 of the Health and Safety Code
2 is amended to read:

3

1367.241.  

(a) Notwithstanding any other provision of law, on
4and after January 1, 2013, a health care service plan that provides
5prescription drug benefits shall accept only the prior authorization
6form developed pursuant to subdivisionbegin delete (c)end deletebegin insert (c), or an electronic
7prior authorization process described in subdivision (e),end insert
when
8requiring prior authorization for prescription drug benefits. This
9section does not apply in the event that a physician or physician
10group has been delegated the financial risk for prescription drugs
11by a health care service plan and does not use a prior authorization
12process. This section does not apply to a health care service plan,
13or to its affiliated providers, if the health care service plan owns
14and operates its pharmacies and does not use a prior authorization
15process for prescription drugs.

16(b) If a health care service plan fails to utilize or accept the prior
17authorization form, or fails to respond within two business days
18upon receipt of a completed prior authorization request from a
19prescribing provider, pursuant to the submission of the prior
20authorization form developed as described in subdivision (c),begin insert or
21an electronic prior authorization process described in subdivision
22(e),end insert
the prior authorization request shall be deemed to have been
P3    1granted. The requirements of this subdivision shall not apply to
2contracts entered into pursuant to Article 2.7 (commencing with
3Section 14087.3), Article 2.8 (commencing with Section 14087.5),
4Article 2.81 (commencing with Section 14087.96), or Article 2.91
5(commencing with Section 14089) of Chapter 7 of, or Chapter 8
6(commencing with Section 14200) of, Part 3 of Division 9 of the
7Welfare and Institutions Code.

8(c) On or before July 1, 2012, the department and the
9Department of Insurance shall jointly develop a uniform prior
10authorization form. Notwithstanding any other provision of law,
11on and after January 1, 2013, or six months after the form is
12developed, whichever is later, every prescribing provider shall use
13that uniform prior authorizationbegin delete formend deletebegin insert form, or an electronic prior
14authorization process described in subdivision (e),end insert
to request prior
15authorization for coverage of prescription drug benefits and every
16health care service plan shall accept that form as sufficient to
17request prior authorization for prescription drug benefits.

18(d) The prior authorization form developed pursuant to
19subdivision (c) shall meet the following criteria:

20(1) The form shall not exceed two pages.

21(2) The form shall be made electronically available by the
22department and the health care service plan.

23(3) The completed form may also be electronically submitted
24from the prescribing provider to the health care service plan.

25(4) The department and the Department of Insurance shall
26develop the form with input from interested parties from at least
27one public meeting.

28(5) The department and the Department of Insurance, in
29development of the standardized form, shall take into consideration
30the following:

31(A) Existing prior authorization forms established by the federal
32Centers for Medicare and Medicaid Services and the State
33Department of Health Care Services.

34(B) National standards pertaining to electronic prior
35authorization.

begin insert

36(e) A prescribing provider may use an electronic prior
37authorization system utilizing the standardized form described in
38subdivision (c) or an electronic process developed specifically for
39transmitting prior authorization information that is consistent with
40the standardized form described in subdivision (c) and that meets
P4    1National Council for Prescription Drug Programs’ SCRIPT
2electronic prior authorization standards.

end insert
begin delete

3(e)

end delete

4begin insert(f)end insert For purposes of this section, a “prescribing provider” shall
5include a provider authorized to write a prescription, pursuant to
6subdivision (a) of Section 4040 of the Business and Professions
7Code, to treat a medical condition of an enrollee.

8

SEC. 2.  

Section 10123.191 of the Insurance Code is amended
9to read:

10

10123.191.  

(a) Notwithstanding any other provision of law,
11on and after January 1, 2013, a health insurer that provides
12prescription drug benefits shall utilize and accept only the prior
13authorization form developed pursuant to subdivisionbegin delete (c)end deletebegin insert (c), or
14an electronic prior authorization process described in subdivision
15(e),end insert
when requiring prior authorization for prescription drug
16benefits.

17(b) If a health insurer fails to utilize or accept the prior
18authorization form, or fails to respond within two business days
19upon receipt of a completed prior authorization request from a
20prescribing provider, pursuant to the submission of the prior
21authorization form developed as described in subdivision (c),begin insert or
22an electronic prior authorization process described in subdivision
23(e),end insert
the prior authorization request shall be deemed to have been
24granted. The requirements of this subdivision shall not apply to
25contracts entered into pursuant to Article 2.7 (commencing with
26Section 14087.3), Article 2.8 (commencing with Section 14087.5),
27Article 2.81 (commencing with Section 14087.96), or Article 2.91
28(commencing with Section 14089) of Chapter 7 of, or Chapter 8
29(commencing with Section 14200) of, Part 3 of Division 9 of the
30Welfare and Institutions Code.

31(c) On or before July 1, 2012, the department and the
32Department of Managed Health Care shall jointly develop a
33uniform prior authorization form. Notwithstanding any other
34provision of law, on and after January 1, 2013, or six months after
35the form is developed, whichever is later, every prescribing
36provider shall use that uniform prior authorizationbegin delete formend deletebegin insert form, or
37an electronic prior authorization process described in subdivision
38(e),end insert
to request prior authorization for coverage of prescription drug
39benefits and every health insurer shall accept that form as sufficient
40to request prior authorization for prescription drug benefits.

P5    1(d) The prior authorization form developed pursuant to
2subdivision (c) shall meet the following criteria:

3(1) The form shall not exceed two pages.

4(2) The form shall be made electronically available by the
5department and the health insurer.

6(3) The completed form may also be electronically submitted
7from the prescribing provider to the health insurer.

8(4) The department and the Department of Managed Health
9Care shall develop the form with input from interested parties from
10at least one public meeting.

11(5) The department and the Department of Managed Health
12Care, in development of the standardized form, shall take into
13consideration the following:

14(A) Existing prior authorization forms established by the federal
15Centers for Medicare and Medicaid Services and the State
16Department of Health Care Services.

17(B) National standards pertaining to electronic prior
18authorization.

begin insert

19(e) A prescribing provider may use an electronic prior
20authorization system utilizing the standardized form described in
21subdivision (c) or an electronic process developed specifically for
22transmitting prior authorization information that is consistent with
23the standardized form described in subdivision (c) and that meets
24National Council for Prescription Drug Programs’ SCRIPT
25electronic prior authorization standards.

end insert
begin delete

26(e)

end delete

27begin insert(f)end insert For purposes of this section, a “prescribing provider” shall
28include a provider authorized to write a prescription, pursuant to
29subdivision (a) of Section 4040 of the Business and Professions
30Code, to treat a medical condition of an insured.

31

SEC. 3.  

No reimbursement is required by this act pursuant to
32Section 6 of Article XIII B of the California Constitution because
33the only costs that may be incurred by a local agency or school
34district will be incurred because this act creates a new crime or
35infraction, eliminates a crime or infraction, or changes the penalty
36for a crime or infraction, within the meaning of Section 17556 of
37the Government Code, or changes the definition of a crime within
P6    1the meaning of Section 6 of Article XIII B of the California
2Constitution.



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