BILL NUMBER: AB 974 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 3, 1998
AMENDED IN SENATE APRIL 23, 1998
AMENDED IN SENATE JULY 22, 1997
AMENDED IN SENATE JULY 10, 1997
AMENDED IN ASSEMBLY APRIL 16, 1997
INTRODUCED BY Assembly Member Gallegos
(Principal coauthor: Senator Leslie)
(Coauthors: Assembly Members Alquist, Aroner, Bordonaro, Cardoza,
Cunneen, Kuehl, Machado, Murray, and Wayne)
(Coauthor: Senator Watson)
FEBRUARY 27, 1997
An act to add Sections 1363.01, 1367.20, and 1367.22 to the Health
and Safety Code, relating to health care service plans.
LEGISLATIVE COUNSEL'S DIGEST
AB 974, as amended, Gallegos. Health care service plans:
prescription drug benefits.
Under existing law, the Knox-Keene Health Care Service Plan Act of
1975, health care service plans are regulated by the Department of
Corporations. Willful violation of the act is a crime.
Existing law requires health care service plans to furnish
services in a manner providing continuity of care and to be able to
demonstrate to the department that medical decisions are rendered by
qualified medical providers, unhindered by fiscal and administrative
management.
This bill would require, for health care service plan contracts
covering prescription drug benefits issued, amended, or renewed on or
after July 1, 1999, that benefits shall not limit or exclude
coverage for a drug for an enrollee if the drug previously had been
approved for coverage by the plan for a medical condition of the
enrollee and the plan's prescribing provider continues to prescribe
the drug for the medical condition, provided that it is appropriately
prescribed, and is considered safe and effective for treatment. It
would prohibit construing this provision as precluding the
prescribing provider from prescribing another drug that is covered by
the plan and is medically appropriate. It would also prohibit
construing this provision to prohibit generic drug substitutions,
pursuant to specified existing law.
Existing law prohibits any plan from being issued, amended,
delivered, or renewed in this state if the plan limits or excludes
coverage for a drug on the basis that the drug is prescribed for a
use that is different from the use for which that drug has been
approved for marketing by the federal Food and Drug Administration.
This bill would provide that coverage for those different-use
drugs is subject to those provisions of existing law and not
by to this bill.
The bill would also require every health care service plan that
covers prescription drug benefits to comply with certain requirements
regarding providing notice to enrollees regarding whether
the plan uses a formulary and providing certain information
about drugs on the formulary to the public, upon request . The
bill would require plans that use a formulary to provide an enrollee
or member of the public, upon request, a list of all of the drugs
contained in the plan's formulary, and would require the plan to
provide information, by telephone, about whether specific drugs are
on the plan's formulary.
By changing the definition of a crime, the 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 1363.01 is added to the Health and Safety Code,
to read:
1363.01. (a) Every plan that covers prescription drug benefits
shall provide notice in the evidence of coverage and disclosure form
to enrollees regarding whether the plan uses a formulary. The notice
shall be in language that is easily understood and in a format that
is easy to understand. The notice shall include an explanation of
what a formulary is, how the plan determines which prescription drugs
are included or excluded, and how often the plan reviews the
contents of the formulary.
(b) Every plan that covers prescription drug benefits shall
provide to members of the public, upon request,
information regarding whether a specific drug or drugs are on the
plan's formulary. Notice of the opportunity to secure this
information from the plan, including the plan's telephone number for
making a request of this nature, shall be included in the evidence of
coverage and disclosure form to enrollees.
(c) Every plan shall notify enrollees, and members of the public
who request formulary information, that the presence of a drug on the
plan's formulary does not guarantee that an enrollee will be
prescribed that drug by his or her prescribing provider for a
particular medical condition.
SEC. 2. Section 1367.20 is added to the Health and Safety Code, to
read:
1367.20. Every health care service plan that provides
prescription drug benefits and maintains one or more drug formularies
shall provide to members of the public, upon request, a copy of the
most current list of prescription drugs on the formulary of the plan
by major therapeutic category, with an indication of whether any
drugs on the list are preferred over other listed drugs. If the
health care service plan maintains more than one formulary, the plan
shall notify the requester that a choice of formulary lists is
available.
SEC. 3. Section 1367.22 is added to the Health and Safety Code, to
read:
1367.22. (a) A health care service plan contract, issued,
amended, or renewed on or after July 1, 1999, that covers
prescription drug benefits shall not limit or exclude coverage for a
drug for an enrollee if the drug previously had been approved for
coverage by the plan for a medical condition of the enrollee and the
plan's prescribing provider continues to prescribe the drug for the
medical condition, provided that the drug is appropriately prescribed
and is considered safe and effective for treating the enrollee's
medical condition. Nothing in this section shall preclude the
prescribing provider from prescribing another drug covered by the
plan that is medically appropriate for the enrollee, nor shall
anything in this section be construed to prohibit generic drug
substitutions as authorized by Section 4073 of the Business and
Professions Code. For purposes of this section, a prescribing
provider shall include a provider authorized to write a prescription,
pursuant to subdivision (a) of Section 4059 of the Business and
Professions Code, to treat a medical condition of an enrollee.
(b) This section does not apply to coverage for any drug that is
prescribed for a use that is different from the use for which that
drug has been approved for marketing by the federal Food and Drug
Administration. Coverage for different-use drugs is subject to
Section 1367.21.
(c) 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 plans 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.
(d) Nothing in this section shall prohibit a health care service
plan from charging a subscriber or enrollee a copayment or a
deductible for prescription drug benefits or from setting forth, by
contract, limitations on maximum coverage of prescription drug
benefits, provided that the copayments, deductibles, or limitations
are reported to, and held unobjectionable by, the commissioner and
set forth to the subscriber or enrollee pursuant to the disclosure
provisions of Section 1363.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB 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 XIIIB of the California Constitution.
Notwithstanding Section 17580 of the Government Code, unless
otherwise specified, the provisions of this act shall become
operative on the same date that the act takes effect pursuant to the
California Constitution.