Amended in Assembly April 23, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2418

Introduced by Assembly Members Bonilla and Skinner

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(Coauthors: Assembly Members Bonta, Maienschein, and Nestande)

end insert

February 21, 2014

An act to add begin delete Section end delete begin insert Sections end insert 1367.247 begin insert , 1367.248, and 1367.249 end insert to the Health and Safety Code, and to add begin delete Section 10123.192 end delete begin insert Sections 10123.207, 10123.208, and 10123.209 end insert to the Insurance Code, relating to health care coverage.

LEGISLATIVE COUNSEL’S DIGEST

AB 2418, as amended, Bonilla. Health care coverage: prescription begin delete drug end delete begin insert drugs: end insert refills.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law imposes various requirements on contracts and policies that cover prescription drug benefits. Existing law, the Pharmacy Law, provides for the licensure and regulation of pharmacists by the California State Board of Pharmacy and prohibits the refilling of a prescription without the authorization of the prescriber, except as specified.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, begin delete 2015, end delete begin insert 2016, end insert that provides begin insert coverage for end insert prescription drug benefits and imposes a mandatory mail order restriction for all or some covered prescription drugs to establish a process allowing enrollees and insureds to opt out of the restriction, as specified. begin delete This end delete begin insert The end insert bill would begin delete prohibit end delete begin insert require end insert a health care service plan contract or a health insurance policy issued, amended, or renewed on or after January 1, begin delete 2015, end delete begin insert 2016, end insert that provides begin insert coverage for end insert prescription drug benefits begin delete from denying coverage for the refill of an otherwise covered drug when the refill is ordered for the purpose of placing all of the enrollee’s or insured’s medications on the same schedule for refill end delete begin insert to permit and apply a prorated daily cost-sharing rate to refills of prescriptions that are dispensed by a network pharmacy for less than the standard refill amount if the prescriber or pharmacist indicates that the refill could be in the best interest of the enrollee or insured and is for the purpose of synchronizing the enrollee’s or insured’s medications, provided that certain requirements are satisfied end insert . The bill would also begin delete prohibit the contract or policy from denying coverage for the end delete begin insert require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2016, that provides coverage for prescription drug benefits to allow for the early end insert refill of covered topical ophthalmic products at 70% of the predicted days of use. Because a willful violation of the bill’s requirements by a health care service plan would be 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:

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begin insert SECTION 1. end insert   

end insert

begin insert The Legislature hereby finds and declares all of
the following: end insert

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(a) As much as 75 percent of patients do not take their
medications as prescribed. Poor adherence to prescribed
treatments poses serious health risks to nonadhering patients,
particularly those with chronic diseases.

end insert begin insert

(b) Poor adherence to prescribed treatments leads to
unnecessary disease progression, avoidable utilization of inpatient
and outpatient medical care, higher mortality rates, and increased
medical spending. According to the New England Healthcare
Institute, poor adherence to medication results in $100 billion in
excess hospital visits and a total of $290 billion in avoidable
medical spending each year -- 13 percent of all health care
expenditures in the United States. Adherence to prescription
medication prevents these unnecessary complications and is a cost
effective and simple tool in the treatment of health conditions.

end insert begin insert

(c) Given the evidence showing benefits to patients, the federal
Centers for Medicare and Medicaid Services requires Medicare
Part D plans to permit beneficiaries to choose between mail order
delivery or community pharmacy access to prescription drugs,
requires Part D plans to allow for the synchronization of refill
dates for patients with multiple prescriptions, and recommends
that Part D plans authorize early refills of topical ophthalmic
products at 70 percent of the predicted days of use.

end insert begin insert

(d) It is the intent of the Legislature to enact legislation that
promotes policies designed to improve patient medication
adherence.

end insert

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 1367.247 is added to the Health and Safety
Code, to read:

1367.247.  

(a)  begin delete (1) end delete begin delete   end delete A health care service plan contract issued,
amended, or renewed on or after January 1, begin delete 2015, end delete begin insert 2016, end insert that
provides begin insert coverage for end insert prescription drug benefits and that imposes
a mandatory mail order restriction for some or all covered
prescription drugs shall establish a process for enrollees to opt out
of that restriction. begin insert The opt out process may require the use of a
plan’s network pharmacy that, at the discretion of the plan, is
suited to special handling of the prescription drug and patient
care. The opt out process may require 30 days’ written notice
before the election to opt out is effective. end insert The opt out process shall
comply with all of the following requirements:

begin delete

(A)

end delete

begin insert (1) end insert  Not impose conditions or restrictions on an enrollee opting
out of the mandatory mail order restriction. For purposes of this
subparagraph, “conditions or restrictions” include, but are not
limited to, requiring prescriber approval or submission of
documentation by the enrollee or prescriber.

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(B)

end delete

begin insert (2) end insert  Allow an enrollee to opt out of the mandatory mail order
restriction, and revoke his or her prior opt out of the restriction, at
any time.

begin delete

(C)

end delete

begin insert (3) end insert  The choice by an enrollee to opt out shall be valid for begin delete as
long as the enrollee remains enrolled in the plan contract or elects
to revoke the opt out. end delete begin insert the duration of the plan year or until the
enrollee elects to revoke the opt out, whichever occurs first,
provided that the enrollee remains enrolled in the same product
with either the same subscriber, with respect to individual plan
contracts, or the same plan sponsor, with respect to group plan
contracts. end insert

begin delete

(D)

end delete

begin insert (4) end insert  A health care service plan shall provide an enrollee who
obtains a covered prescription drug that is subject to the mandatory
mail order restriction with a separate written notice of the
restriction begin insert and any exceptions upon dispensing of the first fill of
the drug or end insert no less than 30 days prior to the restriction taking effect
for begin delete each drug subject to the restriction end delete begin insert the first refill of the drug end insert .
This written notice shall be in addition to any information contained
in the plan’s evidence of coverage or evidence of benefits. The
notice shall inform the enrollee of the right to opt out of the
mandatory mail order restriction and instructions on how to do begin delete so,
including designating a mailing address, electronic mail address,
and, if the plan chooses to receive opt out elections by telephone
or facsimile, a toll-free telephone or facsimile number, to which
the enrollee may deliver his or her opt out election. end delete begin insert so. end insert

begin delete

(2)

end delete

begin insert (b) end insert  This begin delete subdivision end delete begin insert section end insert shall not apply to begin delete drugs that are end delete begin insert a
drug that is end insert not available at begin delete an in-network end delete begin insert a network end insert community
pharmacy due to begin delete a end delete begin insert any of the following: end insert

begin insert

(1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration
(FDA).

end insert

begin insert (2) end insert begin insert   end insert begin insert A end insert manufacturer’s instructions or begin delete restrictions, or due to any end delete
begin insert restrictions. end insert

begin insert (3) end insert begin insert   end insert begin insert Any end insert risk evaluation and management strategy approved by
the begin delete federal Food and Drug Administration. end delete begin insert FDA. end insert

begin delete

(b) A health care service plan contract issued, amended, or
renewed on or after January 1, 2015, that provides prescription
drug benefits shall not deny coverage for the refill of an otherwise
covered drug when the refill is ordered for the purpose of placing
all of the enrollee’s medications on the same schedule for refill.

end delete begin delete

(c) A health care service plan contract issued, amended, or
renewed on or after January 1, 2015, that provides prescription
drug benefits shall not deny coverage for the refill of covered
topical ophthalmic products at 70 percent of the predicted days of
use.

end delete begin insert

(4) A special shortage affecting the plan’s pharmacy network.

end insert begin delete

(d)

end delete

begin insert (c) end insert  Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a plan contract.

begin insert

(d) For purposes of this section, the following definitions shall
apply:

end insert begin insert

(1) For group health care service plan contracts, “plan year”
has the meaning set forth in Section 144.103 of Title 45 of the
Code of Federal Regulations.

end insert begin insert

(2) For individual health care service plan contracts, “plan
year” means the calendar year.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 1367.248 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 1367.248. end insert   

(a) A health care service plan contract issued,
amended, or renewed on or after January 1, 2016, that provides
coverage for prescription drug benefits shall permit and apply a
prorated daily cost-sharing rate to the refills of prescriptions that
are dispensed by a network pharmacy for less than the standard
refill amount if the prescriber or pharmacist indicates that the
refill for less than the standard amount could be in the best interest
of the enrollee and is for the purpose of synchronizing the
enrollee’s medications and all of the following apply:

(1) The prescription drugs being synchronized are covered and
authorized by the health care service plan contract.

(2) The prescription drugs being refilled for less than the
standard amount are not subject to quantity limits or other
utilization management controls that are inconsistent with the
synchronization plan, including, but not limited to, controlled
substance prescribing and dispensing guidelines intended to
prevent misuse or abuse.

(3) The prescription drugs being synchronized are dispensed
by a single network pharmacy.

(4) The patient has completed at least 90 consecutive days on
the prescription drugs being synchronized.

(5) The prescription drugs being refilled for less than the
standard amount are of a formulation that can be effectively split
over the required short fill period to achieve synchronization.

(6) The prescriber has not done either of the following with
respect to the prescriptions drugs being refilled for less than the
standard amount:

(A) Indicated, either orally or in his or her own handwriting,
“No change to quantity,” or words of similar meaning.

(B) Checked a box on the prescription marked “No change to
quantity,” and personally initialed the box or checkmark.

(b) This section shall not apply to a drug that is not available
at a network community pharmacy due to any of the following:

(1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration
(FDA).

(2) A manufacturer’s instructions or restrictions.

(3) Any risk evaluation and management strategy approved by
the FDA.

(4) A special shortage affecting the plan’s pharmacy network.

(c) Nothing in this section shall be construed to establish a new
or mandated benefit or to prevent the application of deductible or
copayment provisions in a plan contract.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 1367.249 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

begin insert

begin insert 1367.249. end insert   

(a) A health care service plan contract issued,
amended, or renewed on or after January 1, 2016, that provides
coverage for prescription drug benefits shall allow for early refills
of covered topical ophthalmic products at 70 percent of the
predicted days of use.

(b) Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a plan contract.

end insert

begin delete SEC. 2. end delete
begin insert SEC. 5. end insert   

Section begin delete 10123.192 end delete begin insert 10123.207 end insert is added to the Insurance
Code, to read:

begin delete 10123.192. end delete
begin insert 10123.207. end insert   

(a)  begin delete (1) end delete begin delete   end delete A health insurance policy issued, amended,
or renewed on or after January 1, begin delete 2015, end delete begin insert 2016, end insert that provides
begin insert coverage for end insert prescription drug benefits and that imposes a
mandatory mail order restriction for some or all covered
prescription drugs shall establish a process for insureds to opt out
of that restriction. begin insert The opt out process may require the use of a
plan’s network pharmacy that, at the discretion of the plan, is
suited to special handling of the prescription drug and patient
care. The opt out process may require 30 days’ written notice
before the election to opt out is effective. end insert The opt out process shall
comply with all of the following requirements:

begin delete

(A)

end delete

begin insert (1) end insert  Not impose conditions or restrictions on an insured opting
out of the mandatory mail order restriction. For purposes of this
subparagraph, “conditions or restrictions” include, but are not
limited to, requiring prescriber approval or submission of
documentation by the insured or prescriber.

begin delete

(B)

end delete

begin insert (2) end insert  Allow an insured to opt out of the mandatory mail order
restriction, and revoke his or her prior opt out of the restriction, at
any time.

begin delete

(C)

end delete

begin insert (3) end insert  The choice by an insured to opt out shall be valid for begin delete as long
as the insured remains covered under the policy or elects to revoke
the opt out. end delete begin insert the duration of the plan year or until the insured elects
to revoke the opt out, whichever occurs first, provided that the
insured remains enrolled in the same product with either the same
policyholder, with respect to individual policies, or the same plan
sponsor, with respect to group policies. end insert

begin delete

(D)

end delete

begin insert (4) end insert  A health insurer shall provide an insured who obtains a
covered prescription drug that is subject to the mandatory mail
order restriction with a separate written notice of the restriction
begin insert and any exceptions upon dispensing of the first fill of the drug or end insert
no less than 30 days prior to the restriction taking effect for begin delete each
drug subject to the restriction end delete begin insert the first refill of the drug end insert . This written
notice shall be in addition to any information contained in the
insurer’s evidence of coverage or evidence of benefits. The notice
shall inform the insured of the right to opt out of the mandatory
mail order restriction and instructions on how to do begin delete so, including
designating a mailing address, electronic mail address, and, if the
insurer chooses to receive opt out elections by telephone or
facsimile, a toll-free telephone or facsimile number, to which the
insured may deliver his or her opt out election. end delete begin insert so. end insert

begin delete

(2)

end delete

begin insert (b) end insert  This begin delete subdivision end delete begin insert section end insert shall not apply to begin delete drugs that are end delete begin insert a
drug that is end insert not available at an in-network community pharmacy
due to begin delete a end delete begin insert any of the following: end insert

begin insert

(1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration
(FDA).

end insert

begin insert (2) end insert begin insert   end insert begin insert A end insert manufacturer’s instructions or begin delete restrictions, or due to any end delete
begin insert restrictions. end insert

begin insert (3) end insert begin insert   end insert begin insert Any end insert risk evaluation and management strategy approved by
the begin delete federal Food and Drug Administration. end delete begin insert FDA. end insert

begin delete

(b) A health insurance policy issued, amended, or renewed on
or after January 1, 2015, that provides prescription drug benefits
shall not deny coverage for the refill of an otherwise covered drug
when the refill is ordered for the purpose of placing all of the
insured’s medications on the same schedule for refill.

(c) A health insurance policy issued, amended, or renewed on
or after January 1, 2015, that provides prescription drug benefits
shall not deny coverage for the early refill of covered topical
ophthalmic products at 70 percent of the predicted days of use.

end delete begin insert

(4) A special shortage affecting the insurer’s pharmacy network.

end insert begin delete

(d)

end delete

begin insert (c) end insert  Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a policy.

begin insert

(d) For purposes of this section, the following definitions shall
apply:

end insert begin insert

(1) For group health insurance policies, “plan year” has the
meaning set forth in Section 144.103 of Title 45 of the Code of
Federal Regulations.

end insert begin insert

(2) For individual health insurance policies, “plan year” means
the calendar year.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 10123.208 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 10123.208. end insert   

(a) A health insurance policy issued, amended, or
renewed on or after January 1, 2016, that provides coverage for
prescription drug benefits shall permit and apply a prorated daily
cost-sharing rate to the refills of prescriptions that are dispensed
by a network pharmacy for less than the standard refill amount if
the prescriber or pharmacist indicates that the refill for less than
the standard amount could be in the best interest of the insured
and is for the purpose of synchronizing the insured’s medications
and all of the following apply:

(1) The prescription drugs being synchronized are covered and
authorized by the health insurance policy.

(2) The prescription drugs being refilled for less than the
standard amount are not subject to quantity limits or other
utilization management controls that are inconsistent with the
synchronization plan, including, but not limited to, controlled
substance prescribing and dispensing guidelines intended to
prevent misuse or abuse.

(3) The prescription drugs being synchronized are dispensed
by a single network pharmacy.

(4) The insured has completed at least 90 consecutive days on
the prescription drugs being synchronized.

(5) The prescription drugs being refilled for less than the
standard amount are of a formulation that can be effectively split
over the required short fill period to achieve synchronization.

(6) The prescriber has not done either of the following with
respect to the prescriptions drugs being refilled for less than the
standard amount:

(A) Indicated, either orally or in his or her own handwriting,
“No change to quantity,” or words of similar meaning.

(B) Checked a box on the prescription marked “No change to
quantity,” and personally initialed the box or checkmark.

(b) This section shall not apply to a drug that is not available
at a network community pharmacy due to any of the following:

(1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration
(FDA).

(2) A manufacturer’s instructions or restrictions.

(3) Any risk evaluation and management strategy approved by
the FDA.

(4) A special shortage affecting the insurer’s pharmacy network.

(c) Nothing in this section shall be construed to establish a new
or mandated benefit or to prevent the application of deductible or
copayment provisions in a policy.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 10123.209 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 10123.209. end insert   

(a) A health insurance policy issued, amended, or
renewed on or after January 1, 2016, that provides coverage for
prescription drug benefits shall allow for early refills of covered
topical opthalmic products at 70 percent of the predicted days of
use.

(b) Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a policy.

end insert

begin delete SEC. 3. end delete
begin insert SEC. 8. end insert   

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.