BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 282 (Hernandez) - Health care coverage:  prescription drugs
          
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          |Version: April 9, 2015          |Policy Vote: HEALTH 8 - 0       |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: May 4, 2015       |Consultant: Brendan McCarthy    |
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          This bill meets the criteria for referral to the Suspense File.



          


          Bill  
          Summary:  SB 282 would authorize prescribing providers to use an  
          electronic process for transmitting prior authorization  
          information.


          Fiscal  
          Impact:  
           One-time costs of $134,000 in 2015-16 and $169,000 in 2016-17  
            to revise existing regulations by the Department of Insurance  
            (Insurance Fund).

           One-time costs of about $90,000 to amend regulations by the  
            Department of Managed Health Care (Managed Care Fund).


          Background:  Under current law, the Department of Insurance and the  







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          Department of Managed Health Care have developed a uniform prior  
          authorization form that health plans and health insurers  
          (collectively referred to as "carriers") must accept from  
          prescribing providers when the carrier requires prior  
          authorization before certain prescription drugs are authorized  
          for coverage. The standard form is two pages and by regulation  
          carriers must accept the standard form in paper form, by  
          telephone, web portal, or other means of transmission. Under  
          current law, if a carrier fails to accept the standardized prior  
          authorization form or fails to respond within two business days,  
          the request is deemed authorized. (Medi-Cal managed care plans  
          are required to accept the standardized form but are exempt from  
          the two business day response requirement and are instead  
          governed by the requirements of the Medi-Cal program.)


          Proposed Law:  
            SB 282 would authorize prescribing providers to use an  
          electronic process for transmitting prior authorization  
          information.
          The authority to use an electronic prior authorization process  
          would be in addition to the existing requirement to use the  
          standardized prior authorization form. 


          The electronic prior authorization form must be consistent with  
          the requirements of the existing standardized form and meet  
          specified national standards.


          The bill exempts contracted network physician groups that have  
          accepted financial risk for pharmacy benefits, a contracted  
          network physician group that uses its own internal prior  
          authorization process, or a contracted physician network that  
          has been delegated utilization management responsibility by a  
          carrier.




          Staff  
          Comments:  The only costs that may be incurred by a local agency  
          relate to crimes and infractions. Under the California  
          Constitution, such costs are not reimbursable by the state.








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