BILL NUMBER: AB 1800 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Ma
FEBRUARY 21, 2012
An act to amend, repeal, and add Section 1342.7 of the Health and
Safety Code, and to add Section 10123.197.5 to the Insurance Code,
relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 1800, as introduced, Ma. Prescription drugs.
Existing law provides for licensing and regulation of health care
service plans by the Department of Managed Health Care. Existing law
provides that the willful violation of provisions regulating health
care service plans is a crime. Existing law provides for the
licensing and regulation of health insurers by the Insurance
Commissioner. Existing law requires health care service plans and
health insurers to provide certain benefits, but generally does not
require plans and insurers to cover prescription drugs. Existing law
imposes various requirements on plans and insurers if they offer
coverage for prescription drugs. Existing law, with respect to health
care service plans, authorizes a plan to file information with the
department to seek the approval of, among other things, a copayment,
deductible, or exclusion to a plan's prescription drug benefit and
specifies that an approved exclusion shall not be subject to review
through the independent medical review process.
Existing federal law, the Patient Protection and Affordable Care
Act, commencing January 1, 2014, imposes an annual limitation on cost
sharing incurred under a health plan that shall not exceed a
specified amount and defines "essential health benefits" to include,
among other things, prescription drugs.
This bill would, commencing January 1, 2013, require a health care
service plan contract and a health insurance policy offering
outpatient prescription drug coverage to provide for a limit on
annual out-of-pocket expenses for outpatient prescription drug
coverage and include the enrollee's out-of-pocket costs of covered
prescription drugs in that limit, except as specified. The would bill
also specify that this limit shall not exceed that federal limit.
The bill would also provide, commencing January 1, 2013, that these
provisions shall not be construed to affect the reduction in cost
sharing for eligible insureds described in federal law. The bill
would, commencing January 1, 2014, with respect to health care
service plans, delete the provision specifying that an approved
exclusion shall not be subject to review through the independent
medical review process. The bill would, commencing January 1, 2014,
provide that any deductible for basic health care services or
essential health benefits shall also apply to covered prescription
drugs.
Because this bill would impose new requirements on health care
service plans, the willful violation of which would be a crime, it
would thereby 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 1342.7 of the Health and Safety Code is amended
to read:
1342.7. (a) The Legislature finds that in enacting Sections
1367.215, 1367.25, 1367.45, 1367.51, and 1374.72, it did not intend
to limit the department's authority to regulate the provision of
medically necessary prescription drug benefits by a health care
service plan to the extent that the plan provides coverage for those
benefits.
(b) (1) Nothing in this chapter shall preclude a plan from filing
relevant information with the department pursuant to Section 1352 to
seek the approval of a copayment, deductible, limitation, or
exclusion to a plan's prescription drug benefits. If the department
approves an exclusion to a plan's prescription drug benefits, the
exclusion shall not be subject to review through the independent
medical review process pursuant to Section 1374.30 on the grounds of
medical necessity. The department shall retain its role in assessing
whether issues are related to coverage or medical necessity pursuant
to paragraph (2) of subdivision (d) of Section 1374.30.
(2) A plan seeking approval of a copayment or deductible may file
an amendment pursuant to Section 1352.1. A plan seeking approval of a
limitation or exclusion shall file a material modification pursuant
to subdivision (b) of Section 1352.
(c) Nothing in this chapter shall prohibit a plan from charging a
subscriber or enrollee a copayment or deductible for a prescription
drug benefit or from setting forth by contract, a limitation or an
exclusion from, coverage of prescription drug benefits, if the
copayment, deductible, limitation, or exclusion is reported to, and
found unobjectionable by, the director and disclosed to the
subscriber or enrollee pursuant to the provisions of Section 1363.
(d) The department in developing standards for the approval of a
copayment, deductible, limitation, or exclusion to a plan's
prescription drug benefits, shall consider alternative benefit
designs, including, but not limited to, the following:
(1) Different out-of-pocket costs for consumers, including
copayments and deductibles.
(2) Different limitations, including caps on benefits.
(3) Use of exclusions from coverage of prescription drugs to treat
various conditions, including the effect of the exclusions on the
plan's ability to provide basic health care services, the amount of
subscriber or enrollee premiums, and the amount of out-of-pocket
costs for an enrollee.
(4) Different packages negotiated between purchasers and plans.
(5) Different tiered pharmacy benefits, including the use of
generic prescription drugs.
(6) Current and past practices.
(e) The department shall develop a regulation outlining the
standards to be used in reviewing a plan's request for approval of
its proposed copayment, deductible, limitation, or exclusion on its
prescription drug benefits.
(f) (1) A health care service plan contract, except a specialized
health care service plan contract, that is issued, amended, or
renewed on or after January 1, 2013, that offers outpatient
prescription drug coverage, shall provide for a limit on annual
out-of-pocket expenses for outpatient prescription drug coverage and
include the enrollee's out-of-pocket costs of covered prescription
drugs in that limit.
(f)
(2) This limit shall apply to any copayment, coinsurance,
deductible, and any other form of cost sharing for covered benefits,
including prescription drugs, if covered.
(3) This limit shall not exceed the limit described in Section
1302(c) of the federal Patient Protection and Affordable Care Act, as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (42 U.S.C. Sec. 18022) and any subsequent rules, regulations,
or guidance issued under that section except that this limit shall
take effect on January 1, 2013.
(4) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible insureds described in Section
1402 of the federal Patient Protection and Affordable Care Act, as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (42 U.S.C. Sec. 18071) and any subsequent rules, regulations,
or guidance issued under that section.
(g) Nothing in subdivision (b) or (c) shall permit a
plan to limit prescription drug benefits provided in a manner that is
inconsistent with Sections 1367.215, 1367.25, 1367.45, 1367.51, and
1374.72.
(g)
(h) Nothing in this section shall be construed to
require or authorize a plan that contracts with the State Department
of Health Care Services to provide services to Medi-Cal
beneficiaries or with the Managed Risk Medical Insurance Board to
provide services to enrollees of the Healthy Families Program to
provide coverage for prescription drugs that are not required
pursuant to those programs or contracts, or to limit or exclude any
prescription drugs that are required by those programs or contracts.
(h)
(i) Nothing in this section shall be construed as
prohibiting or otherwise affecting a plan contract that does not
cover outpatient prescription drugs except for coverage for limited
classes of prescription drugs because they are integral to treatments
covered as basic health care services, including, but not limited
to, immunosuppressives, in order to allow for transplants of bodily
organs.
(i)
(j) (1) The department shall periodically review its
regulations developed pursuant to this section.
(2) On or before July 1, 2004, and annually thereafter, the
department shall report to the Legislature on the ongoing
implementation of this section.
(j)
(k) This section shall become operative on January 2,
2003, and shall only apply to contracts issued, amended, or renewed
on or after that date.
(l) This section shall become inoperative on July 1, 2013, and, as
of January 1, 2014, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2014, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 2. Section 1342.47 is added to the Health and Safety Code, to
read:
1342.47. (a) The Legislature finds that in enacting Sections
1367.215, 1367.25, 1367.45, 1367.51, and 1374.72, it did not intend
to limit the department's authority to regulate the provision of
medically necessary prescription drug benefits by a health care
service plan to the extent that the plan provides coverage for those
benefits.
(b) (1) Nothing in this chapter shall preclude a plan from filing
relevant information with the department pursuant to Section 1352 to
seek the approval of a copayment, deductible, limitation, or
exclusion to a plan's prescription drug benefits. The department
shall retain its role in assessing whether issues are related to
coverage or medical necessity pursuant to paragraph (2) of
subdivision (d) of Section 1374.30.
(2) A plan seeking approval of a copayment or deductible may file
an amendment pursuant to Section 1352.1. A plan seeking approval of a
limitation or exclusion shall file a material modification pursuant
to subdivision (b) of Section 1352.
(c) Nothing in this chapter shall prohibit a plan from charging a
subscriber or enrollee a copayment or deductible for a prescription
drug benefit or from setting forth by contract, a limitation or an
exclusion from, coverage of prescription drug benefits, if the
copayment, deductible, limitation, or exclusion is reported to, and
found unobjectionable by, the director and disclosed to the
subscriber or enrollee pursuant to the provisions of Section 1363.
(d) The department, in developing standards for the approval of a
copayment, deductible, limitation, or exclusion to a plan's
prescription drug benefits, shall consider alternative benefit
designs, including, but not limited to, the following:
(1) Different out-of-pocket costs for consumers, including
copayments and deductibles.
(2) Different limitations, including caps on benefits.
(3) Use of exclusions from coverage of prescription drugs to treat
various conditions, including the effect of the exclusions on the
plan's ability to provide basic health care services, the amount of
subscriber or enrollee premiums, and the amount of out-of-pocket
costs for an enrollee.
(4) Different packages negotiated between purchasers and plans.
(5) Different tiered pharmacy benefits, including the use of
generic prescription drugs.
(6) Current and past practices.
(e) The department shall develop a regulation outlining the
standards to be used in reviewing a plan's request for approval of
its proposed copayment, deductible, limitation, or exclusion on its
prescription drug benefits.
(f) (1) A health care service plan contract, except a specialized
health care service plan contract, that is issued, amended, or
renewed on or after January 1, 2014, that offers outpatient
prescription drug coverage, shall provide for a limit on annual
out-of-pocket expenses for outpatient prescription drug coverage and
include the enrollee's out-of-pocket costs of covered prescription
drugs in that limit.
(2) This limit shall apply to any copayment, coinsurance,
deductible, and any other form of cost sharing for covered benefits,
including prescription drugs, if covered.
(3) This limit shall not exceed the limit described in Section
1302(c) of the federal Patient Protection and Affordable Care Act, as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (42 U.S.C. Sec. 18022) and any subsequent rules, regulations,
or guidance issued under that section.
(4) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible insureds described in Section
1402 of the federal Patient Protection and Affordable Care Act, as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (42 U.S.C. Sec. 18071) and any subsequent rules, regulations,
or guidance issued under that section.
(g) Notwithstanding any other provision of law, any deductible for
basic health care services as defined in subdivision (b) of Section
1345 shall also apply to covered prescription drugs. There shall not
be separate deductibles for covered prescription drugs and basic
health care services.
(h) Nothing in subdivision (b) or (c) shall permit a plan to limit
prescription drug benefits provided in a manner that is inconsistent
with Sections 1367.215, 1367.25, 1367.45, 1367.51, and 1374.72.
(i) Nothing in this section shall be construed to require or
authorize a plan that contracts with the State Department of Health
Care Services to provide services to Medi-Cal beneficiaries or with
the Managed Risk Medical Insurance Board to provide services to
enrollees of the Healthy Families Program to provide coverage for
prescription drugs that are not required pursuant to those programs
or contracts, or to limit or exclude any prescription drugs that are
required by those programs or contracts.
(j) (1) The department shall periodically review its regulations
developed pursuant to this section.
(2) On or before July 1, 2014, and annually thereafter, the
department shall report to the Legislature on the ongoing
implementation of this section.
(j) This section shall become operative on January 1, 2014.
SEC. 3. Section 10123.197.5 is added to the Insurance Code, to
read:
10123.197.5. (a) (1) A health insurance policy that is issued,
amended, or renewed on or after January 1, 2013, that offers
outpatient prescription drug coverage, shall provide for a limit on
annual out-of-pocket expenses for outpatient prescription drug
coverage and include the insured's out-of-pocket costs of covered
prescription drugs in that limit.
(2) This limit shall apply to any copayment, coinsurance,
deductible, and any other form of cost sharing for covered benefits,
including prescription drugs, if covered.
(3) This limit shall not exceed the limit described in Section
1302(c) of the federal Patient Protection and Affordable Care Act, as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (42 U.S.C. Sec. 18022) and any subsequent rules, regulations,
or guidance issued under that section except that this limit shall
take effect on January 1, 2013, and shall remain in effect
thereafter.
(4) Nothing in this section shall be construed to affect the
reduction in cost sharing for eligible insureds described in Section
1402 of the federal Patient Protection and Affordable Care Act, as
amended by the federal Health Care and Education Reconciliation Act
of 2010 (42 U.S.C. Sec. 18071) and any subsequent rules, regulations,
or guidance issued under that section.
(b) Notwithstanding any other provision of law, on and after
January 1, 2014, any deductible for essential health benefits, as
described in subsection (b) of Section 1302 of the federal Patient
Protection and Affordable Care Act, as amended by the federal Health
Care and Education Reconciliation Act of 2010 (42 U.S.C. Sec. 18022)
and any subsequent rules, regulations, or guidance issued under that
section, shall also apply to covered prescription drugs. There shall
not be separate deductibles for covered prescription drugs and
essential health benefits.
SEC. 4. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B 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 XIII B of the California
Constitution.