BILL NUMBER: SB 282 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY SEPTEMBER 2, 2015
AMENDED IN ASSEMBLY JULY 8, 2015
AMENDED IN ASSEMBLY JUNE 18, 2015
AMENDED IN SENATE APRIL 9, 2015
INTRODUCED BY Senator Hernandez
FEBRUARY 19, 2015
An act to amend Sections 1367.24, 1367.241, 1368, and 1368.01 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 amended, 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 the Department of Managed Health Care and
the Department of Insurance to jointly develop a uniform prior
authorization form for prescription drug benefits on or before July
1, 2012, and requires, 6 months after the form is developed, every
prescribing provider, when requesting prior authorization for
prescription drug benefits, to submit the request to the health care
service plan or health insurer using the uniform form, and requires
those plans and insurers to accept only the uniform form. Existing
law authorizes a prescribing provider to submit the prior
authorization form electronically to the plan or insurer, and, if the
plan or insurer fails to respond to a request within 2 business
days, the request is deemed granted. Existing law also requires
health care service plans to maintain a process by which prescribing
providers may obtain authorization for a medically necessary
nonformulary prescription drug.
This bill would authorize the prescribing provider to additionally
use an electronic process developed specifically for transmitting
prior authorization information that meets the National Council for
Prescription Drug Programs' SCRIPT standard for electronic prior
authorization transactions. The bill would require the departments to
develop the uniform prior authorization form on or before January 1,
2017, and would require prescribing providers to use, and health
care service plans and health insurers to accept, only those forms
or electronic process on and after July 1, 2017, or 6
months after the form is developed, whichever is later. This bill
would deem a prior authorization request to be granted if the plan or
insurer fails to respond within 72 hours for nonurgent requests, and
within 24 hours when exigent circumstances exist.
This bill would specify that the provisions described above
relating to prior authorization for prescription drugs do not apply
if a contracted network physician group is
delegated the financial risk for the prescription drugs by a health
care service plan or health insurer, if a contracted network
physician group uses its own internal prior authorization
process rather than the health care service plan's or the health
insurer's prior authorization process for its enrollees or insureds,
or if a contracted network physician group is
delegated a utilization management function by the health care
service plan or the health insurer concerning any prescription drug,
regardless of the delegation of financial risk.
Existing law requires health care service plans to establish a
grievance process approved by the Department of Managed Health Care.
This bill would require require, subject
to exceptions, the grievance process established by a health
care service plan or a health insurer to comply with
specified federal regulations.
Because a willful violation of the bill's requirements relative to
health care service plans would be a crime, this bill 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:
SECTION 1. Section 1367.24 of the Health and Safety Code is
amended to read:
1367.24. (a) Every health care service plan that provides
prescription drug benefits shall maintain an expeditious process by
which prescribing providers may obtain authorization for a medically
necessary nonformulary prescription drug. On or before July 1, 1999,
every health care service plan that provides prescription drug
benefits shall file with the department a description of its process,
including timelines, for responding to authorization requests for
nonformulary drugs. Any changes to this process shall be filed with
the department pursuant to Section 1352. Each plan shall provide a
written description of its most current process, including timelines,
to its prescribing providers. For purposes of this section, a
prescribing provider shall include a provider authorized to write a
prescription, pursuant to subdivision (a) of Section 4040 of the
Business and Professions Code, to treat a medical condition of an
enrollee.
(b) Any plan that disapproves a request made pursuant to
subdivision (a) by a prescribing provider to obtain authorization for
a nonformulary drug shall provide the reasons for the disapproval in
a notice provided to the enrollee. The notice shall indicate that
the enrollee may file a grievance seeking an external
exception request review with the plan if the enrollee
objects to the disapproval, including any alternative drug or
treatment offered by the plan. The notice shall comply with
subdivision (b) of Section 1368.02, and the health care
service plan shall comply with subdivision (l) of this section.
1368.02. Any health plan that is required to maintain
an extern al exception request review process pursuant to
subdivision (k) shall indicate in the notice required under this
subdivision that the enrollee may file a grievance seeking an
external exception request review.
(c) The process described in subdivision (a) by which prescribing
providers may obtain authorization for medically necessary
nonformulary drugs shall not apply to a nonformulary drug that has
been prescribed for an enrollee in conformance with the provisions of
Section 1367.22.
(d) The process described in subdivision (a) by which enrollees
may obtain medically necessary nonformulary drugs, including
specified timelines for responding to prescribing provider
authorization requests, shall be described in evidence of coverage
and disclosure forms, as required by subdivision (a) of Section 1363,
issued on or after July 1, 1999.
(e) Every health care service plan that provides prescription drug
benefits shall maintain, as part of its books and records under
Section 1381, all of the following information, which shall be made
available to the director upon request:
(1) The complete drug formulary or formularies of the plan, if the
plan maintains a formulary, including a list of the prescription
drugs on the formulary of the plan by major therapeutic category with
an indication of whether any drugs are preferred over other drugs.
(2) Records developed by the pharmacy and therapeutic committee of
the plan, or by others responsible for developing, modifying, and
overseeing formularies, including medical groups, individual practice
associations, and contracting pharmaceutical benefit management
companies, used to guide the drugs prescribed for the enrollees of
the plan, that fully describe the reasoning behind formulary
decisions.
(3) Any plan arrangements with prescribing providers, medical
groups, individual practice associations, pharmacists, contracting
pharmaceutical benefit management companies, or other entities that
are associated with activities of the plan to encourage formulary
compliance or otherwise manage prescription drug benefits.
(f) If a plan provides prescription drug benefits, the department
shall, as part of its periodic onsite medical survey of each plan
undertaken pursuant to Section 1380, review the performance of the
plan in providing those benefits, including, but not limited to, a
review of the procedures and information maintained pursuant to this
section, and describe the performance of the plan as part of its
report issued pursuant to Section 1380.
(g) The director shall not publicly disclose any information
reviewed pursuant to this section that is determined by the director
to be confidential pursuant to state law.
(h) For purposes of this section, "authorization" means approval
by the health care service plan to provide payment for the
prescription drug.
(i) Nonformulary prescription drugs shall include any drug for
which an enrollee's copayment or out-of-pocket costs are different
than the copayment for a formulary prescription drug, except as
otherwise provided by law or regulation or in cases in which the drug
has been excluded in the plan contract pursuant to Section 1342.7.
(j) Nothing in this section shall be construed to restrict or
impair the application of any other provision of this chapter,
including, but not limited to, Section 1367, which includes among its
requirements that a health care service plan furnish services in a
manner providing continuity of care and demonstrate that medical
decisions are rendered by qualified medical providers unhindered by
fiscal and administrative management.
(k) A For any individual, small group, or
large health plan contracts, a health care service plan's
process described in subdivision (a) shall comply with the
request for exception and external exception request
review processes described in subdivision (c) of Section
156.122 of Title 45 of the Code of Federal Regulations. This
subdivision shall not apply to Medi-Cal managed care health care
service plan contracts as described in subdivision (l).
(l) A health care service plan shall maintain a process for an
external exception request review that complies with subdivision (c)
of Section 156.122 of Title 45 of the Code of Federal Regulations.
(l) "Medi-Cal managed care health care service plan contract"
means any entity that enters into a contract with the State
Department of Health Care Services pursuant to Chapter 7 (commencing
with Section 14000), Chapter 8 (commencing with Section 14200), or
Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9
of the Welfare and Institutions Code.
(m) Nothing in this section shall be construed to affect an
enrollee's or subscriber's eligibility to submit a grievance to the
department for review under Section 1368 or to apply to the
department for an independent medical review under Section 1370.4, or
Article 5.55 (commencing with Section 1374.30) of this chapter.
SEC. 2. Section 1367.241 of the Health and Safety Code is amended
to read:
1367.241. (a) Notwithstanding any other law, on and after January
1, 2013, a health care service plan that provides coverage for
prescription drugs shall accept only the prior authorization form
developed pursuant to subdivision (c), or an electronic prior
authorization process described in subdivision (e), when requiring
prior authorization for prescription drugs. This section does not
apply in the event that a physician or physician group has been
delegated the financial risk for prescription drugs by a health care
service plan and does not use a prior authorization process. This
section does not apply to a health care service plan, or to its
affiliated providers, if the health care service plan owns and
operates its pharmacies and does not use a prior authorization
process for prescription drugs.
(b) If a health care service plan or a contracted physician
group fails to utilize or accept the prior
authorization form, or fails to respond within 72 hours for
nonurgent requests, and within 24 hours if exigent circumstances
exist, upon receipt of a completed prior authorization request from a
prescribing provider, pursuant to the submission of the
prior authorization form developed as described in subdivision (c),
or an electronic prior authorization process described in subdivision
(e), the prior authorization request shall be deemed to
have been granted. The requirements of this subdivision shall not
apply to contracts entered into pursuant to Article 2.7
(commencing with Section 14087.3), Article 2.8 (commencing with
Section 14087.5), Article 2.81 (commencing with Section 14087.96), or
Article 2.91 (commencing with Section 14089) of Chapter 7 of, or
Chapter 7 (commencing with Section 14000),
Chapter 8 (commencing with Section 14200) of,
14200), or Chapter 8.75 (commencing with Section 14591) of
Part 3 of Division 9 of the Welfare and Institutions Code.
Medi-Cal managed care health care service plans that contract under
those chapters shall not be required to maintain an external
exception request review as provided in Section 156.12 2
of Title 45 of the Code of Federal Regulations.
(c) On or before January 1, 2017, the department and the
Department of Insurance shall jointly develop a uniform prior
authorization form. Notwithstanding any other law, on and after July
1, 2017, or six months after the form is completed pursuant to this
section, whichever is later, every prescribing provider shall use
that uniform prior authorization form, or an electronic prior
authorization process described in subdivision (e), to request prior
authorization for coverage of prescription drugs and every health
care service plan shall accept that form or electronic process
as sufficient to request prior authorization for prescription
drugs.
(d) The prior authorization form developed pursuant to subdivision
(c) shall meet the following criteria:
(1) The form shall not exceed two pages.
(2) The form shall be made electronically available by the
department and the health care service plan.
(3) The completed form may also be electronically submitted from
the prescribing provider to the health care service plan.
(4) The department and the Department of Insurance shall develop
the form with input from interested parties from at least one public
meeting.
(5) The department and the Department of Insurance, in development
of the standardized form, shall take into consideration the
following:
(A) Existing prior authorization forms established by the federal
Centers for Medicare and Medicaid Services and the State Department
of Health Care Services.
(B) National standards pertaining to electronic prior
authorization.
(e) A prescribing provider may use an electronic prior
authorization system utilizing the standardized form described in
subdivision (c) or an electronic process developed specifically for
transmitting prior authorization information that meets the National
Council for Prescription Drug Programs' SCRIPT standard for
electronic prior authorization transactions.
(f) Subdivision (a) does not apply if any of the following occurs:
(1) A contracted network physician group is
delegated the financial risk for prescription drugs by a health care
service plan.
(2) A contracted network physician group uses
its own internal prior authorization process rather than the health
care service plan's prior authorization process for plan enrollees.
(3) A contracted network physician group is
delegated a utilization management function by the health care
service plan concerning any prescription drug, regardless of the
delegation of financial risk.
(g) Prior For prescription
drugs, prior authorization requirements for
prescription drugs under this section described in
subdivisions (c) and (e) apply regardless of how that benefit
is classified under the terms of the health plan's
subscriber group or provider
individual contract.
(h) For purposes of this section:
(1) "Prescribing provider" shall include a provider authorized to
write a prescription, pursuant to subdivision (a) of Section 4040 of
the Business and Professions Code, to treat a medical condition of an
enrollee.
(2) "Exigent circumstances" exist when an enrollee is suffering
from a health condition that may seriously jeopardize the enrollee's
life, health, or ability to regain maximum function or when an
enrollee is undergoing a current course of treatment using a
nonformulary drug.
(3) "Completed prior authorization request" means a completed
uniform prior authorization form developed pursuant to subdivision
(c), or a completed request submitted using an electronic prior
authorization system described in subdivision (e), or, for contracted
physician groups described in subdivision (f), the process used by
the contracted physician group.
SEC. 3. Section 1368 of the Health and Safety Code is amended to
read:
1368. (a) Every plan shall do all of the following:
(1) Establish and maintain a grievance system approved by the
department under which enrollees may submit their grievances to the
plan. Each system shall provide reasonable procedures in accordance
with department regulations that shall ensure adequate consideration
of enrollee grievances and rectification when appropriate.
(2) Inform its subscribers and enrollees upon enrollment in the
plan and annually thereafter of the procedure for processing and
resolving grievances. The information shall include the location and
telephone number where grievances may be submitted.
(3) Provide forms for grievances to be given to subscribers and
enrollees who wish to register written grievances. The forms used by
plans licensed pursuant to Section 1353 shall be approved by the
director in advance as to format.
(4) (A) Provide for a written acknowledgment within five calendar
days of the receipt of a grievance, except as noted in subparagraph
(B). The acknowledgment shall advise the complainant of the
following:
(i) That the grievance has been received.
(ii) The date of receipt.
(iii) The name of the plan representative and the telephone number
and address of the plan representative who may be contacted about
the grievance.
(B) (i) Grievances received by telephone, by facsimile, by email,
or online through the plan's Internet Web site pursuant to Section
1368.015, that are not coverage disputes, disputed health care
services involving medical necessity, or experimental or
investigational treatment and that are resolved by the next business
day following receipt are exempt from the requirements of
subparagraph (A) and paragraph (5). The plan shall maintain a log of
all these grievances. The log shall be periodically reviewed by the
plan and shall include the following information for each complaint:
(I) The date of the call.
(II) The name of the complainant.
(III) The complainant's member identification number.
(IV) The nature of the grievance.
(V) The nature of the resolution.
(VI) The name of the plan representative who took the call and
resolved the grievance.
(ii) A For health plan contracts in the
individual, small group, or large group markets, a health care
service plan's response to grievances subject to Section 1367.24
shall also comply with subdivision (c) of Section 156.122 of Title 45
of the Code of Federal Regulations. This paragraph shall not
apply to Medi-Cal managed care health care service plan contracts or
any entity that enters into a contract with the State Department of
Health Care Services pursuant to Chapter 7 (commencing
with Section 14000), Chapter 8 (commencing with Section
14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of
Division 9 of the Welfare and Institutions Code.
(5) Provide subscribers and enrollees with written responses to
grievances, with a clear and concise explanation of the reasons for
the plan's response. For grievances involving the delay, denial, or
modification of health care services, the plan response shall
describe the criteria used and the clinical reasons for its decision,
including all criteria and clinical reasons related to medical
necessity. If a plan, or one of its contracting providers, issues a
decision delaying, denying, or modifying health care services based
in whole or in part on a finding that the proposed health care
services are not a covered benefit under the contract that applies to
the enrollee, the decision shall clearly specify the provisions in
the contract that exclude that coverage.
(6) For grievances involving the cancellation, rescission, or
nonrenewal of a health care service plan contract, the health care
service plan shall continue to provide coverage to the enrollee or
subscriber under the terms of the health care service plan contract
until a final determination of the enrollee's or subscriber's request
for review has been made by the health care service plan or the
director pursuant to Section 1365 and this section. This paragraph
shall not apply if the health care service plan cancels or fails to
renew the enrollee's or subscriber's health care service plan
contract for nonpayment of premiums pursuant to paragraph (1) of
subdivision (a) of Section 1365.
(7) Keep in its files all copies of grievances, and the responses
thereto, for a period of five years.
(b) (1) (A) After either completing the grievance process
described in subdivision (a), or participating in the process for at
least 30 days, a subscriber or enrollee may submit the grievance to
the department for review. In any case determined by the department
to be a case involving an imminent and serious threat to the health
of the patient, including, but not limited to, severe pain, the
potential loss of life, limb, or major bodily function,
cancellations, rescissions, or the nonrenewal of a health care
service plan contract, or in any other case where the department
determines that an earlier review is warranted, a subscriber or
enrollee shall not be required to complete the grievance process or
to participate in the process for at least 30 days before submitting
a grievance to the department for review.
(B) A grievance may be submitted to the department for review and
resolution prior to any arbitration.
(C) Notwithstanding subparagraphs (A) and (B), the department may
refer any grievance that does not pertain to compliance with this
chapter to the State Department of Public Health, the California
Department of Aging, the federal Health Care Financing
Administration, or any other appropriate governmental entity for
investigation and resolution.
(2) If the subscriber or enrollee is a minor, or is incompetent or
incapacitated, the parent, guardian, conservator, relative, or other
designee of the subscriber or enrollee, as appropriate, may submit
the grievance to the department as the agent of the subscriber or
enrollee. Further, a provider may join with, or otherwise assist, a
subscriber or enrollee, or the agent, to submit the grievance to the
department. In addition, following submission of the grievance to the
department, the subscriber or enrollee, or the agent, may authorize
the provider to assist, including advocating on behalf of the
subscriber or enrollee. For purposes of this section, a "relative"
includes the parent, stepparent, spouse, adult son or daughter,
grandparent, brother, sister, uncle, or aunt of the subscriber or
enrollee.
(3) The department shall review the written documents submitted
with the subscriber's or the enrollee's request for review, or
submitted by the agent on behalf of the subscriber or enrollee. The
department may ask for additional information, and may hold an
informal meeting with the involved parties, including providers who
have joined in submitting the grievance or who are otherwise
assisting or advocating on behalf of the subscriber or enrollee. If
after reviewing the record, the department concludes that the
grievance, in whole or in part, is eligible for review under the
independent medical review system established pursuant to Article
5.55 (commencing with Section 1374.30), the department shall
immediately notify the subscriber or enrollee, or agent, of that
option and shall, if requested orally or in writing, assist the
subscriber or enrollee in participating in the independent medical
review system.
(4) If after reviewing the record of a grievance, the department
concludes that a health care service eligible for coverage and
payment under a health care service plan contract has been delayed,
denied, or modified by a plan, or by one of its contracting
providers, in whole or in part due to a determination that the
service is not medically necessary, and that determination was not
communicated to the enrollee in writing along with a notice of the
enrollee's potential right to participate in the independent medical
review system, as required by this chapter, the director shall, by
order, assess administrative penalties. A proceeding for the issuance
of an order assessing administrative penalties shall be subject to
appropriate notice of, and the opportunity for, a hearing with regard
to the person affected in accordance with Section 1397. The
administrative penalties shall not be deemed an exclusive remedy
available to the director. These penalties shall be paid to the
Managed Care Administrative Fines and Penalties Fund and shall be
used for the purposes specified in Section 1341.45.
(5) The department shall send a written notice of the final
disposition of the grievance, and the reasons therefor, to the
subscriber or enrollee, the agent, to any provider that has joined
with or is otherwise assisting the subscriber or enrollee, and to the
plan, within 30 calendar days of receipt of the request for review
unless the director, in his or her discretion, determines that
additional time is reasonably necessary to fully and fairly evaluate
the relevant grievance. In any case not eligible for the independent
medical review system established pursuant to Article 5.55
(commencing with Section 1374.30), the department's written notice
shall include, at a minimum, the following:
(A) A summary of its findings and the reasons why the department
found the plan to be, or not to be, in compliance with any applicable
laws, regulations, or orders of the director.
(B) A discussion of the department's contact with any medical
provider, or any other independent expert relied on by the
department, along with a summary of the views and qualifications of
that provider or expert.
(C) If the enrollee's grievance is sustained in whole or in part,
information about any corrective action taken.
(6) In any department review of a grievance involving a disputed
health care service, as defined in subdivision (b) of Section
1374.30, that is not eligible for the independent medical review
system established pursuant to Article 5.55 (commencing with Section
1374.30), in which the department finds that the plan has delayed,
denied, or modified health care services that are medically
necessary, based on the specific medical circumstances of the
enrollee, and those services are a covered benefit under the terms
and conditions of the health care service plan contract, the
department's written notice shall do either of the following:
(A) Order the plan to promptly offer and provide those health care
services to the enrollee.
(B) Order the plan to promptly reimburse the enrollee for any
reasonable costs associated with urgent care or emergency services,
or other extraordinary and compelling health care services, when the
department finds that the enrollee's decision to secure those
services outside of the plan network was reasonable under the
circumstances.
The department's order shall be binding on the plan.
(7) Distribution of the written notice shall not be deemed a
waiver of any exemption or privilege under existing law, including,
but not limited to, Section 6254.5 of the Government Code, for any
information in connection with and including the written notice, nor
shall any person employed or in any way retained by the department be
required to testify as to that information or notice.
(8) The director shall establish and maintain a system of aging of
grievances that are pending and unresolved for 30 days or more that
shall include a brief explanation of the reasons each grievance is
pending and unresolved for 30 days or more.
(9) A subscriber or enrollee, or the agent acting on behalf of a
subscriber or enrollee, may also request voluntary mediation with the
plan prior to exercising the right to submit a grievance to the
department. The use of mediation services shall not preclude the
right to submit a grievance to the department upon completion of
mediation. In order to initiate mediation, the subscriber or
enrollee, or the agent acting on behalf of the subscriber or
enrollee, and the plan shall voluntarily agree to mediation. Expenses
for mediation shall be borne equally by both sides. The department
shall have no administrative or enforcement responsibilities in
connection with the voluntary mediation process authorized by this
paragraph.
(c) The plan's grievance system shall include a system of aging of
grievances that are pending and unresolved for 30 days or more. The
plan shall provide a quarterly report to the director of grievances
pending and unresolved for 30 or more days with separate categories
of grievances for Medicare enrollees and Medi-Cal enrollees. The plan
shall include with the report a brief explanation of the reasons
each grievance is pending and unresolved for 30 days or more. The
plan may include the following statement in the quarterly report that
is made available to the public by the director:
"Under Medicare and Medi-Cal law, Medicare enrollees and Medi-Cal
enrollees each have separate avenues of appeal that are not available
to other enrollees. Therefore, grievances pending and unresolved may
reflect enrollees pursuing their Medicare or Medi-Cal appeal rights."
If requested by a plan, the director shall include this statement in
a written report made available to the public and prepared by the
director that describes or compares grievances that are pending and
unresolved with the plan for 30 days or more. Additionally, the
director shall, if requested by a plan, append to that written report
a brief explanation, provided in writing by the plan, of the reasons
why grievances described in that written report are pending and
unresolved for 30 days or more. The director shall not be required to
include a statement or
append a brief explanation to a written report that the director is
required to prepare under this chapter, including Sections 1380 and
1397.5.
(d) Subject to subparagraph (C) of paragraph (1) of subdivision
(b), the grievance or resolution procedures authorized by this
section shall be in addition to any other procedures that may be
available to any person, and failure to pursue, exhaust, or engage in
the procedures described in this section shall not preclude the use
of any other remedy provided by law.
(e) Nothing in this section shall be construed to allow the
submission to the department of any provider grievance under this
section. However, as part of a provider's duty to advocate for
medically appropriate health care for his or her patients pursuant to
Sections 510 and 2056 of the Business and Professions Code, nothing
in this subdivision shall be construed to prohibit a provider from
contacting and informing the department about any concerns he or she
has regarding compliance with or enforcement of this chapter.
(f) To the extent required by Section 2719 of the federal Public
Health Service Act (42 U.S.C. Sec. 300gg-19) and any subsequent rules
or regulations, there shall be an independent external review
pursuant to the standards required by the United States Secretary of
Health and Human Services of a health care service plan's
cancellation, rescission, or nonrenewal of an enrollee's or
subscriber's coverage.
SEC. 4. Section 1368.01 of the Health and Safety Code is amended
to read:
1368.01. (a) The grievance system shall require the plan to
resolve grievances within 30 days, except as provided in subdivision
(c).
(b) The grievance system shall include a requirement for
expedited plan review of grievances for cases involving an imminent
and serious threat to the health of the patient, including, but not
limited to, severe pain, potential loss of life, limb, or major
bodily function. When the plan has notice of a case requiring
expedited review, the grievance system shall require the plan to
immediately inform enrollees and subscribers in writing of their
right to notify the department of the grievance. The grievance system
shall also require the plan to provide enrollees, subscribers, and
the department with a written statement on the disposition or pending
status of the grievance no later than three days from receipt of the
grievance, except as provided in subdivision (c). Paragraph (4) of
subdivision (a) of Section 1368 shall not apply to grievances handled
pursuant to this section.
(c) A health care service plan contract in the individual,
small group, or large group markets that provides coverage for
outpatient prescription drugs shall comply with subdivision (c) of
Section 156.122 of Title 45 of the Code of Federal Regulations.
This subdivision shall not apply to Medi-Cal managed care health care
service plan contracts or any entity that enters into a contract
with the State Department of Health Care Services pursuant to Chapt
er 7 (commencing with Section 14000), Chapter 8
(commencing with Section 14200), or Chapter 8.75 (commencing with
Section 14591) of Part 3 of Division 9 of the Welfare and
Institutions Code.
SEC. 5. Section 10123.191 of the Insurance Code is amended to
read:
10123.191. (a) Notwithstanding any other law, on and after
January 1, 2013, a health insurer that provides coverage for
prescription drugs shall utilize and accept only the prior
authorization form developed pursuant to subdivision (c), or an
electronic prior authorization process described in subdivision (e),
when requiring prior authorization for prescription drugs.
(b) If a health insurer or a contracted p hysician
group fails to utilize or accept the prior
authorization form, or fails to respond within 72 hours for
nonurgent requests, and within 24 hours if exigent circumstances
exist, upon receipt of a completed prior authorization request from a
prescribing provider, pursuant to the submission of the
prior authorization form developed as described in subdivision (c),
or an electronic prior authorization process described in subdivision
(e), the prior authorization request shall be deemed to
have been granted. The requirements of this subdivision
shall not apply to contracts entered into pursuant to Article 2.7
(commencing with Section 14087.3), Article 2.8 (commencing with
Section 14087.5), Article 2.81 (commencing with Section 14087.96), or
Article 2.91 (commencing with Section 14089) of Chapter 7 of, or
Chapter 8 (commencing with Section 14200) of, Part 3 of Division 9 of
the Welfare and Institutions Code.
(c) On or before January 1, 2017, the department and the
Department of Managed Health Care shall jointly develop a uniform
prior authorization form. Notwithstanding any other law, on and after
July 1, 2017, or six months after the form is completed pursuant to
this section, whichever is later, every prescribing provider shall
use that uniform prior authorization form, or an electronic prior
authorization process described in subdivision (e), to request prior
authorization for coverage of prescription drugs and every health
insurer shall accept that form or electronic process as
sufficient to request prior authorization for prescription drugs.
(d) The prior authorization form developed pursuant to subdivision
(c) shall meet the following criteria:
(1) The form shall not exceed two pages.
(2) The form shall be made electronically available by the
department and the health insurer.
(3) The completed form may also be electronically submitted from
the prescribing provider to the health insurer.
(4) The department and the Department of Managed Health Care shall
develop the form with input from interested parties from at least
one public meeting.
(5) The department and the Department of Managed Health Care, in
development of the standardized form, shall take into consideration
the following:
(A) Existing prior authorization forms established by the federal
Centers for Medicare and Medicaid Services and the State Department
of Health Care Services.
(B) National standards pertaining to electronic prior
authorization.
(e) A prescribing provider may use an electronic prior
authorization system utilizing the standardized form described in
subdivision (c) or an electronic process developed specifically for
transmitting prior authorization information that meets the National
Council for Prescription Drug Programs' SCRIPT standard for
electronic prior authorization transactions.
(f) Subdivision (a) does not apply if any of the following occurs:
(1) A contracted network physician group is
delegated the financial risk for the pharmacy or medical drug benefit
by a health insurer.
(2) A contracted network physician group uses
its own internal prior authorization process rather than the health
insurer's prior authorization process for the health insurer's
insureds.
(3) A contracted network physician group is
delegated a utilization management function by the health insurer
concerning any prescription drug, regardless of the delegation of
financial risk.
(g) Prior For prescription drugs, prior
authorization requirements for prescription drugs
under this section described in subdivisions (c) and
(e) apply regardless of how that benefit is classified under
the terms of the health insurer's policyholder or provider
contract. group or individual policy.
(h) A health insurer shall maintain a process for an external
exception request review that complies with subdivision (c) of
Section 156.122 of Title 45 of the Code of Federal Regulations.
(i) For an individual, small group, or large group health
insurance policy, a health insurer that provides coverage for
outpatient prescription drugs shall comply with subdivision (c) of
Section 156.122 of Title 45 of the Code of Federal Regulations.
(h)
(j) For purposes of this section:
(1) "Prescribing provider" shall include a provider authorized to
write a prescription, pursuant to subdivision (a) of Section 4040 of
the Business and Professions Code, to treat a medical condition of an
insured.
(2) "Exigent circumstances" exist when an insured is suffering
from a health condition that may seriously jeopardize the insured's
life, health, or ability to regain maximum function or when an
insured is undergoing a current course of treatment using a
nonformulary drug.
(3) "Completed prior authorization request" means a completed
uniform prior authorization form developed pursuant to subdivision
(c), or a completed request submitted using an electronic prior
authorization system described in subdivision (e), or, for contracted
physician groups described in subdivision (f), the process used by
the contracted physician group.
SEC. 6. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.