BILL ANALYSIS �
AB 2418
Page 1
ASSEMBLY THIRD READING
AB 2418 (Bonilla and Skinner)
As Amended May 27, 2014
Majority vote
HEALTH 19-0 APPROPRIATIONS 17-0
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|Ayes:|Pan, Maienschein, |Ayes:|Gatto, Bigelow, |
| |Ammiano, Chau, Bonilla, | |Bocanegra, Bradford, Ian |
| |Bonta, Ch�vez, Chesbro, | |Calderon, Campos, |
| |Gomez, Gonzalez, Roger | |Donnelly, Eggman, Gomez, |
| |Hern�ndez, Lowenthal, | |Holden, Jones, Linder, |
| |Waldron, Nazarian, | |Pan, Quirk, |
| |Nestande, Patterson, | |Ridley-Thomas, Wagner, |
| |Ridley-Thomas, Wagner, | |Weber |
| |Wieckowski | | |
| | | | |
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SUMMARY : Requires health plans and insurers to allow enrollees
to opt out of any mandatory mail order prescription program,
allows for the synchronization of prescription refills, and
permits early refill of topical ophthalmic medications,
effective January 1, 2016. Specifically, this bill :
1)Requires a health plan or insurer, if it imposes a mandatory
mail-order restriction for some or all covered prescription
drugs, to establish a process for enrollees to opt out of that
restriction.
2)Requires a health plan or insurer to permit and apply a
prorated daily cost-sharing rate to the refills of
prescriptions dispensed at a participating pharmacy for less
than the standard amount in order to synchronize an enrollee's
medications, as specified.
3)Requires a health plan or insurer to provide for refills of
covered ophthalmic products (e.g., eye drops) at 70% of the
predicted days of use. This provision is intended to account
for potential spillage.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill has been amended and implications of the
mandatory mail order provisions have been clarified since the
AB 2418
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California Health Benefits Review Program (CHBRP) analyzed it.
Cost estimates from CHBRP have been modified, and costs are
estimated as follows:
1)Potential one-time costs to the Department of Managed Health
Care of $200,000 for plan licensing, regulatory, and
enforcement costs (Managed Care Fund). Ongoing costs are
likely to be minor.
2)Minor one-time costs to the California Department of
Insurance, in the range of $30,000 (Insurance Fund) for
oversight and enforcement.
3)Negligible costs for provision of services through the
California Public Employees' Retirement System benefit plans
(General Fund/federal/special/local funds).
4)State expenditures for Medi-Cal Managed Care Plans are
estimated to increase by at least $154,000 annually.
5)Increased employer-funded premium costs in the private
insurance market of at least $845,000 annually.
6)Increased premium expenditures by employees and individuals
purchasing insurance of at least $500,000 annually, as well as
increased out-of-pocket expenditures of at least $1.8 million.
7)To the extent this bill precludes the ability of plans and
insurers to direct enrollees, for certain drugs, to mandatory
mail order pharmacies with which plans have pricing agreements
for certain drugs, there could be significant cost pressures
to the market beyond that estimated by CHBRP. This cost
pressure is likely to grow over time, as this bill will limit
the ability of pharmaceutical benefits managers to use
mandatory mail order pharmacies for certain high-cost drugs.
COMMENTS : According to the author, this bill is aimed at
improving patient medication adherence and health outcomes
through streamlining the medication refill process using the
three strategies mandated.
California Pharmacists Association and California Healthcare
Institute, co-sponsors of this bill, write that improving
medication adherence requires a multi-faceted approach,
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including the strategies outlined in this bill. The sponsors
argue that pharmacists play a key role in helping improve
medication adherence and contend that hundreds of clinical
studies show improvement in medication adherence and benefits to
patient health outcomes when pharmacists work with other members
of the care team on medication therapy.
Health plans, insurers, and pharmacy benefit managers oppose
this bill concerned about the costs and administrative
complexity of the proposed changes. Health plans and insurers
view this bill as micromanaging the prescription refill process
and argue that this bill will eviscerate the benefits members
realize from mandatory mail order programs.
Analysis Prepared by : Ben Russell / HEALTH / (916) 319-2097
FN: 0003858