BILL ANALYSIS Ó
SB 282
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SENATE THIRD READING
SB
282 (Hernandez)
As Amended September 2, 2015
Majority vote
SENATE VOTE: 40-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Health |19-0 |Bonta, Maienschein, | |
| | |Bonilla, Burke, | |
| | |Chávez, Chiu, Gomez, | |
| | |Gonzalez, Roger | |
| | |Hernández, Lackey, | |
| | |Nazarian, Patterson, | |
| | |Ridley-Thomas, | |
| | |Rodriguez, Santiago, | |
| | |Steinorth, Thurmond, | |
| | |Waldron, Wood | |
| | | | |
|----------------+-----+-----------------------+---------------------|
|Appropriations |17-0 |Gomez, Bigelow, Bloom, | |
| | |Bonta, Calderon, | |
| | |Chang, Nazarian, | |
| | |Eggman, Gallagher, | |
| | | | |
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| | | | |
| | |Eduardo Garcia, | |
| | |Holden, Jones, Quirk, | |
| | |Rendon, Wagner, Weber, | |
| | |Wood | |
| | | | |
| | | | |
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SUMMARY: Authorizes a prescribing provider to use an electronic
process to transmit prior authorization (PA) requests for
prescription drugs, and modifies timeframes by which health
plans and insurers (collectively referred to as "carriers") must
respond to such PA requests. Specifically, this bill:
1)Authorizes a prescribing provider to use an electronic PA
system utilizing an established uniform PA form, or an
electronic process developed specifically for transmitting PA
information that meets the National Council for Prescription
Drug Programs' (NCPDP) SCRIPT standard for electronic PA.
2)Requires the Department of Managed Health Care (DMHC) and the
California Department of Insurance (CDI) to, on or before
January 1, 2017, jointly develop a uniform PA form, and
requires every prescribing provider to, on and after July 1,
2017, or six months after the form is completed, use the PA
form, or the electronic PA process.
3)Exempts contracted network physician groups from requirements
to use the uniform PA form if the contracted network physician
group is delegated financial risk or utilization management,
or uses its own internal PA process, as specified.
4)Modifies the timeframe by which a PA request would be deemed
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granted by a carrier from two business days to 72 hours for
non-urgent PA requests and 24 hours if exigent circumstances,
as defined, exist. Specifies that a completed PA request
submitted to a contracted network physician group is deemed
granted under these same timeframes.
5)Requires the grievance process established by a health care
service plan to comply with specified federal regulations.
6)Exempts Medi-Cal managed care health care service plans from
the provisions of this bill.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, this bill will result in:
1)One-time costs in the range of $200,000 over two years to the
CDI (Insurance Fund) to update regulations.
2)One-time costs in the range of $100,000 to DMHC (Managed Care
Fund) to update regulations.
COMMENTS: According to the author, until the passage of SB 866,
(Ed Hernandez), Chapter 648, Statutes of 2011, each insurer had
their own PA form, and some had multiple forms, depending on the
type of drug requested. The complexity of the process made it
confusing and costly for many prescribers. SB 866 streamlined
the process and improved timely access to prescription drugs by
creating a standardized electronic form. This bill further
increases efficiency by permitting additional methods of
electronic PA, including, innovative software programs and
user-friendly computer portals.
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PA is a common cost-containment and utilization review method
used by health plans, insurers, and some public coverage
programs. The practice of PA, also called prior approval or
preauthorization, requires a prescriber to obtain permission
from the health plan or insurer to prescribe a medication before
prescribing it. Health plans and insurers routinely require
physicians to fill out PA forms when the provider prescribes a
medicine or treatment not covered by the plan or insurer's
formulary. PA is intended to curb abuse and diversion of
controlled substances, and has been shown to be effective in
controlling prescription drug costs.
Pursuant to SB 866, DMHC and CDI jointly developed the
"Prescription Drug Prior Authorization Request Form" which
requires prescribing providers to include specified information,
including patient information, insurance information, prescriber
information, medication and dispensing information, patient
diagnoses, relevant clinical information to support the PA, and
other information. Through the use of this form, prescribing
provider face fewer issues regarding variation among PA forms
and processes used by carriers.
In February 2015, final regulations from the federal Health and
Human Services Agency became effective requiring carriers to
establish certain exceptions processes that allow enrollees, or
their prescribing provider, to request and gain access to
clinically appropriate drugs not covered by the carrier.
Specifically, the regulations require, for plan years beginning
on or after January 1, 2016, carriers to make determinations on
a standard exception request, and to notify the enrollee and the
prescribing provider of its coverage determination, no later
than 72 hours following receipt of the request, or 24 hours
based on exigent circumstances under which an enrollee suffers
from a health condition that may 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
non-formulary drug. Finally, the regulations require carriers
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that deny a standard or expedited exception request for a
non-formulary drug to have a process for the enrollee or the
enrollee's prescribing provider to request a review of the
denial by an independent review organization. The same timing
applied to the carrier's initial review of the exception request
apply.
Under this bill, consistent with the federal regulations,
carriers and physician groups using the PA process, either
through the uniform form or the electronic process, would be
required to make determinations within these same timeframes.
Supporters state that this bill modernizes the PA process by
allowing for the use of alternative programs and software to
electronically transmit PA information. In doing so, this bill
eliminates road blocks to the expeditious filing of prescription
drugs and can achieve improved outcomes. The California
Association of Physician Groups supports this bill, and states
that their members have implemented their own internal processes
for PA, and this bill will allow physician groups to utilize a
broader range of electronic systems than are currently allowed.
Other supporters include CoverMyMeds which states that current
law does not allow for deviation from the uniform PA form, and
this bill will streamline the process and reduce the time it
takes to secure drug approval; and Blue Shield of California
which states that electronic PA systems can be integrated with
electronic prescriptions and health records, and this bill will
increase efficiency in health care delivery by permitting
additional methods of electronic PA.
There is no known opposition.
Analysis Prepared by:
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An-Chi Tsou and Kelly Green / HEALTH / (916)
319-2097 FN: 0002009