BILL ANALYSIS Ó
SB 282
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Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 282
(Hernandez) - As Amended July 8, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill updates the codes governing standard prior
authorization request forms, to conform to federal regulation
and modernize the allowable processes for standard prior
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authorization (PA). Specifically, this bill:
1)Allows providers to use newer, electronic processes that meet
certain data standards, in addition to the standard form in
current law.
2)Conforms to timelines in recent federal regulations, related
to reviews of exceptions to a plan's drug coverage guidelines
which must be conducted in order to ensure access medically
appropriate drugs.
3)Exempts contracted physician groups that manage their own drug
benefits from compliance with the existing standard PA law.
FISCAL EFFECT:
1)One-time costs in the range of $200,000 over two years to the
California Department of Insurance (Insurance Fund) to update
regulations.
2)One-time costs in the range of $100,000 to the Department of
Managed Health Care (Managed Care Fund) to update regulations.
COMMENTS:
1)Purpose. The main purpose of this bill is to remove statutory
roadblocks to electronic PA, which are specially designed
systems that interface with health plan coverage data to
provide quicker or real-time answers to PA queries, and also
populate the electronic PA request with data from a patient's
health record, saving time and expense. It also conforms to
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recent federal regulation and exempts certain physician groups
from compliance, many of whom use their own PA systems.
2)Prior Authorization (PA). Health plans and pharmaceutical
benefit managers attempt to balance the medical needs of the
patient and prescriber preferences with the provision of
affordable benefits that meet clinical standards of
appropriate care. In so doing, utilization review controls
such as PA are employed. PA is health plan approval for
coverage of a drug. It is not only employed to contain costs,
but to allow a clinical review to ensure medication is
prescribed appropriately and to allow consideration of safer
alternatives. In some instances, inappropriate prescribing
can be identified.
3)Related Legislation. AB 374 (Nazarian), pending in the Senate
Appropriations Committee, prohibits a carrier from applying a
step therapy protocol when a patient has made a "step therapy
override determination request," if the patient's physician
determines that step therapy would not be medically
appropriate, and requires a carrier to expeditiously review a
request made by a patient, if specific criteria are met and
adequate supporting rationale and documentation is provided by
the prescribing physician.
AB 339 (Gordon) pending in the Senate Appropriations
Committee, applies to covered outpatients prescription drugs,
restricts cost-sharing amounts for a 30-day supply to
one-twenty-fourth of the annual out-of-pocket limit, requires
coverage for specified drugs under a variety of specified
circumstances, standardizes tiers for prescription drug
formularies, and restricts the ability of health plans and
insurers to institute cost-sharing and place drugs on certain
cost-sharing tiers, unless specified conditions are met.
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4)Prior Legislation. SB 866, (Ed Hernandez) Chapter 648,
Statutes of 2011, created a standardized electronic PA form.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081