BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 282 (Hernandez) - Health care coverage: prescription drugs ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 9, 2015 |Policy Vote: HEALTH 8 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 4, 2015 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- 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 SB 282 (Hernandez) Page 1 of ? 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. SB 282 (Hernandez) Page 2 of ? -- END --