BILL ANALYSIS
AB 1144
Page 1
Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 1144 (Price) - As Amended: April 13, 2009
SUBJECT : Health care coverage: prescriptions.
SUMMARY : Requires health plans and health insurers to report
specified information relating to chronic pain medication
management requirements for their enrollees or insureds to the
Department of Managed Health Care (DMHC) and the California
Department of Insurance (CDI), respectively. Specifically,
this bill :
1)Directs a health plan or health insurer that covers
prescription drug benefits to report to DMHC or CDI
respectively whenever it requires an enrollee or insured to do
any of the following:
a) Use an off-label pain medication prior to providing
access to a drug supported by an indication approved by the
federal Food and Drug Administration (FDA);
b) Use more than two formulary alternative medications
prior to providing access to a pain medication prescribed
by the enrollee's or insured's health care provider; and,
c) Use a pain medication, other than the medication
prescribed by the enrollee's or insured's health care
provider, for more than seven days prior to providing
access to the prescribed pain medication.
2)Requires the report to include a statement describing why the
health plan or health insurer was authorized to impose any of
the requirements pursuant to 1) above on the enrollee or
insured.
EXISTING LAW :
1)Provides for the regulation of health plans by DMHC and health
insurers by CDI.
2)Prohibits health plans and health insurers that cover
prescription drugs from limiting or excluding coverage for a
drug on the basis that the drug is prescribed for a use
different from the use for which the drug has been approved by
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the FDA, provided that specified conditions have been met,
including that the drug is prescribed by a participating
licensed health care professional for the treatment of a
chronic and seriously debilitating condition, the drug is
medically necessary to treat that condition, and the drug is
on the plan formulary.
3)Prohibits health plans covering prescription drug benefits
from limiting or excluding coverage for a drug for an enrollee
if the drug was previously approved for coverage by the plan
for a medical condition of the enrollee and the plan's
prescribing provider continues to provide the drug for the
medical condition, provided that it is safe and effective for
treatment.
4)Clarifies that the prohibition in 3) above does not preclude
the prescribing provider from prescribing another drug that is
covered by the plan and is medically appropriate, nor does it
prohibit generic drug alternatives.
5)Requires health plans that provide prescription drug benefits
and maintain one or more drug formularies to provide to the
public, upon request, a copy of the most current list of
prescription drugs by major therapeutic category, with an
indication of whether any drugs on the list are preferred over
other listed drugs. Requires plans that maintain more than
one formulary to notify the requester that a choice of
formulary lists is available.
6)Requires health plans that provide prescription drug benefits
to maintain an expedited process by which prescribing
providers may obtain authorization for a medically necessary
non-formulary drug.
7)Requires any health plan disapproval pursuant to 6) above to
provide the enrollee with the reasons for the disapproval and
notify the enrollee of the right to file a grievance if the
enrollee objects to the disapproval; including any alternative
drug or treatment offered by the plan.
8)Requires the process for authorization of medically necessary
non-formulary drugs to be described in the health plan
disclosure form.
9)Requires, in regulations, health plans that cover outpatient
prescription drug benefits to cover all medically necessary
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outpatient prescription drugs, as specified.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . The author states that approximately 76
million Americans suffer from chronic pain, which is more than
those with diabetes, heart disease, and cancer combined. The
author maintains that this bill is needed to monitor the
practice of step therapy, or "fail first" therapy, which
requires pain patients to experiment with different
medications or treatments before receiving the one deemed best
by their health care provider. The author notes that, in some
cases, patients are required to try up to five different drugs
before receiving the appropriate medication. The author
asserts that decisions about which drugs a pain patient should
be allowed to receive are best left up to the patient and his
or her physician, who is best qualified to know the patient's
medical history and specific needs, rather than dictated by
the pharmacy benefits structure of the patient's health plan
or health insurer.
2)CHRONIC PAIN . According to the National Institutes of Health
(NIH), acute pain after surgery or trauma comes on suddenly
and lasts for a limited time, whereas chronic pain persists
for months or years. Common types of chronic pain include
back pain, headaches, arthritis, cancer pain, and neuropathic
pain, which results from injury to nerves. The NIH indicates
that common treatments include medication, acupuncture, local
electrical stimulation, brain stimulation, surgery,
psychotherapy, relaxation therapy, biofeedback, and behavior
modification. According to a 2006 survey by the National
Center for Health Statistics (NCHS), back pain is the leading
cause of disability in Americans under 45 years old, and more
than 26 million Americans between the ages of 20-64 experience
frequent back pain. The NCHS survey also indicated that
adults who reported low back pain were three times as likely
to be in poorer health and more than four times as likely to
experience serious psychological distress as people without
low back pain problems. The survey estimated that the annual
cost of chronic pain in the U.S., including health care
expenses, lost income, and lost productivity, is about $100
billion.
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3)STEP THERAPY . According to a 2001 report by the California
HealthCare Foundation (CHCF) relating to prescription drug
coverage and formulary use in California, step therapy
requires patients and physicians to follow a particular
sequence of drug treatment. In general, a patient must fail
to respond to a recommended first-line therapy before a
second- or third-line medication is prescribed. Typically,
this means that patients will be required to try medications
that have been on the market for a longer period of time and
are usually less expensive than the newer medications
available to treat a specific condition. For example, the
CHCF report suggests that newer inhibitors for the relief of
arthritic pain, such as Celebrex, which are part of a large
class of anti-inflammatory drugs, may be subject to step
therapy requirements.
4)RECENT STUDY . Findings from a recent study sponsored by
Pfizer, Inc. and published in the February 2009 issue of the
American Journal of Managed Care suggest that step therapy
programs may increase overall health care costs for employers.
In the study, researchers analyzed insurance claims data from
2003 through 2006 for 11,851 people with employer-sponsored
health coverage that incorporated a step therapy protocol for
anti-hypertensive drugs and compared their use of health care
services to a group of 30,882 anti-hypertensive drug users who
did not participate in a step therapy program. They found
that the patients treated for hypertension under step therapy
filled prescriptions for less anti-hypertensive medication, by
7.9%, than the comparison group with no step therapy
requirement. As drug utilization declined for the step
therapy patients, their hospital admissions and emergency room
visits increased. Two years after the step therapy protocol
was implemented, the step therapy patients incurred $99 more
in health care costs per quarter, on average, than the
comparison group. The researchers suggested the increase was
caused by patients not filling their prescriptions for
non-generic drugs when they learned that the drug was not
covered and more expensive than they expected. Conclusions
from the study indicated that step therapy patients who are
unwilling to switch or unable to overcome administrative
hurdles may go without medication, which, in turn, may cause
their medical condition to deteriorate and increase their need
for medical interventions in the future.
AB 1144
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5)PRIOR LEGISLATION .
a) AB 974 (Gallegos), Chapter 68, Statutes of 1998,
prohibits health plans that cover prescription drugs from
limiting or excluding coverage for a drug that had
previously been approved by the plan.
b) SB 625 (Rosenthal), Chapter 69, Statutes of 1998,
requires health plans that cover prescription drugs and
that have one or more formularies to publicly disclose,
upon request, a copy of the current list of prescription
drugs that includes specified information and to maintain
an expedited prior authorization process for medically
necessary non-formulary prescription drugs, and clarifies
the content of the notice, including grievance information,
that is required to be sent to an enrollee when a prior
authorization request is denied by the plan.
c) AB 1985 (Speier), Chapter 1268, Statutes of 1992,
prohibits health plans and health insurers that provide
coverage for prescription drugs from limiting or excluding
coverage for a drug on the basis that the drug is
prescribed for an off-label use, if specified criteria are
met.
6)SUPPORT . The sponsors of this bill, For Grace and Healthy
African American Families, contend that this bill is needed to
bring attention to the inadequacies of step therapy protocols
and shed light on the health disparities in pain treatment,
especially among women and people of color, whom, according to
the sponsors, studies have shown are disproportionately
under-treated, or go untreated for pain. The Alliance of
Minority Medical Associations points out that this bill will
ensure that the practice of step therapy is evaluated and
documented so that its overall impact on health outcomes can
be better studied, documented, and monitored. The Neuropathy
Action Foundation and the Community Life Improvement Program
state that this bill will help to provide documented evidence
of a cost-controlling practice that subjects patients who
already suffer persistent pain to unnecessary delays in access
and compromises patient care. Finally, the California Medical
Association and the Los Angeles County Medical Association
write in support that this bill will set the groundwork for
helping physicians practice medicine in an unhindered fashion.
7)OPPOSITION . Health plans and health insurers object to this
bill. The California Association of Health Plans (CAHP)
contends that there is no compelling evidence that the onerous
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and tedious reporting requirement in this bill will result in
better or safer use of medication. According to CAHP, the
evidence instead suggests that the current safeguards inherent
in step therapy protocols are needed to minimize a patient's
risk by requiring drug therapy for a medical condition to
begin with a safer or more established drug regimen before
progressing to other drug therapies. CAHP also states that
existing law already allows for exceptions to step therapy by
allowing a doctor to submit an authorization request if the
doctor chooses a non-formulary drug for the patient.
Consequently, CAHP believes this bill does nothing to enhance
the patient protection process. The Association of California
Life and Health Insurance Companies write in opposition that
imposing burdensome reporting requirements on health insurers
relating to pain medication management is counterproductive to
the industry's efforts to make health insurance more
affordable and available to all Californians.
8)POLICY QUESTION . Should the information reported to DMHC and
CDI pursuant to this bill also be provided to the relevant
policy committees of the Legislature?
REGISTERED SUPPORT / OPPOSITION :
Support
Healthy African American Families (sponsor)
For Grace (sponsor)
Alliance of Minority Medical Associations
California Medical Association
Community Life Improvement Program
Los Angeles County Medical Association
Neuropathy Action Foundation
Opposition
Anthem Blue Cross
Association of California Life and Health Insurance Companies
California Association of Health Plans
Analysis Prepared by : Cassie Rafanan / HEALTH / (916)
319-2097