Bill Text: CA AB347 | 2021-2022 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Health care coverage: step therapy.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2021-10-09 - Chaptered by Secretary of State - Chapter 742, Statutes of 2021. [AB347 Detail]
Download: California-2021-AB347-Amended.html
(d), (c), or an electronic prior authorization process described in subdivision (e), when requiring prior authorization for prescription drugs. This section does not apply in the event that a physician or physician group has been delegated the financial risk for prescription drugs by a health care service plan and does not use a prior authorization process. This
section does not apply to a health care service plan, or to its affiliated providers, if the health care service plan owns and operates its pharmacies and does not use a prior authorization process for prescription drugs.
Bill Title: Health care coverage: step therapy.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2021-10-09 - Chaptered by Secretary of State - Chapter 742, Statutes of 2021. [AB347 Detail]
Download: California-2021-AB347-Amended.html
|
Amended
IN
Assembly
April 08, 2021 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Assembly Bill
No. 347
| Introduced by Assembly Member Arambula (Coauthor: Assembly Member Nazarian) (Coauthor: Senator Wiener) |
January 28, 2021 |
An act to amend Sections 1367.241 and 1367.244 of, and to add Section 1367.206 to, the Health and Safety Code, and to amend Sections 10123.191, 10123.197, and 10123.201 of the Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 347, as amended, Arambula.
Health care coverage: step therapy.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene), 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 provides for the regulation of health insurers by the Department of Insurance. Existing law authorizes a health insurer to require step therapy if there is more than one drug that is appropriate for the treatment of a medical condition, and authorizes a health care service plan to utilize step therapy consistent with Knox-Keene. Under existing law, if a health care service plan, health insurer, or contracted physician group fails to respond to a completed prior authorization request from a prescribing provider within a specified timeframe, the prior authorization request is deemed to have been granted.
This bill would clarify that a health care service plan that provides coverage for prescription drugs may require step therapy therapy, as defined, if there is more than one drug that is appropriate for the treatment of a medical condition. The bill would require a health care service plan or health insurer to expeditiously grant a step therapy exception if the health care provider submits justification and supporting clinical documentation, if needed, that specified criteria are met. The bill would authorize an enrollee or insured or their designee, guardian, primary
care physician, or health care provider to file an appeal of a prior authorization or the denial of a step therapy exception request, and would require a health care service plan or health insurer to designate a clinical peer to review those appeals. The bill would require a health care service plan, health insurer, or utilization review organization to annually report specified information about their step therapy exception requests and prior authorization requests to the Department of Managed Health Care or the Department of Insurance, as appropriate. The bill would require a prior authorization request or step therapy exception request to be deemed to have been granted if a health care service plan, health insurer, or contracted physician group fails to send an approval or denial within a specified timeframe. Because a willful violation of the bill’s requirements relative to health care service plans 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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 1367.206 is added to the Health and Safety Code, to read:1367.206.
(a) If there is more than one drug that is appropriate for the treatment of a medical condition, a health care service plan that provides coverage for prescription drugs may require step therapy.(b) A step therapy exception shall be expeditiously granted if any of the following criteria are met: the health care provider submits justification and supporting clinical documentation, if needed, to support the health care provider’s statement that
any of the following apply:
(1) The required prescription drug is contraindicated or will likely cause an adverse reaction or physical or mental harm to the enrollee.
(2) The enrollee’s provider expects the required prescription drug is expected to be ineffective based on the known clinical characteristics of the enrollee and the known characteristics and history of the prescription drug regimen.
(3) The enrollee has tried the required
prescription drug, or another prescription drug in the same pharmacologic class or with the same mechanism of action, while covered by their current or previous health insurance policy or health benefit plan contract, contract or Medicaid, and that prescription drug was discontinued due to lack of efficacy or effectiveness, diminished effect, or an adverse event. The health care service plan may require the submission of completed documentation demonstrating that the enrollee has tried the required prescription drug before it was discontinued.
(4) The required prescription drug is not in the best interest of the
enrollee, based on medical necessity. necessity because the required drug is expected to cause any of the following:
(A) Worsen a comorbid condition of the enrollee.
(B) Decrease the enrollee’s ability to maintain a reasonable functional ability in performing daily activities.
(C) Be a significant barrier to the enrollee’s adherence
to or compliance with the enrollee’s plan of care.
(5) The enrollee is stable on a prescription drug selected by their health care provider for the medical condition under consideration while covered by their current or previous health care service plan contract or health insurance policy. policy or Medicaid.
(c) An enrollee or the enrollee’s designee, guardian, primary care physician, or health care provider may file an appeal of a prior authorization or the denial of a step therapy exception request. A health care service plan shall designate a clinical peer to review appeals, because these
appeals pertain to medical or clinical matters and an appeal must be reviewed by an appropriate health care professional. A clinical peer reviewing an appeal shall not have had any involvement in the initial determination that is the subject of the appeal.
(d) This section does not prohibit either of the following:
(1) A health care service plan or utilization review organization from requiring an enrollee to try an AB-rated generic equivalent or interchangeable biological product before providing coverage for the equivalent branded prescription drug.
(2) A health care provider from prescribing a prescription drug that is
determined to be medically appropriate.
(e) The health care service plan or utilization review organization shall report the following information to the department annually, in a manner and format prescribed by the department: department, including, but not limited to, any of the following:
(1) The number of step therapy exception requests and prior authorization requests received.
(2) The type of health care providers or the medical specialties of the health care
providers submitting requests.
(3) The number of step therapy exception requests that were initially denied and the reasons for the denials.
(4) The number of step therapy exception requests that were initially approved.
(5) The number of step therapy exception denials that were reversed by an internal appeal or an external review.
(6) The medical conditions for which patients are granted exceptions due to the likelihood that switching from the prescription drug will likely cause an adverse reaction or physical or mental harm to the insured.
enrollee.
(f)This section does not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code.
(f) This section does not require or authorize a health care service plan that contracts with the State Department of Health Care Services to provide services to Medi-Cal beneficiaries 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.
(g) For purposes of this section:
(1) “Clinical peer” means a health care professional who is in the same profession and the same or similar specialty as the health care provider who typically manages the medical condition, procedures, or treatment under review.
(2) “Step therapy exception” means a step therapy protocol that is overridden in favor of immediate coverage of
the prescription drug prescribed by a health care provider. the exception to the step therapy process and the determination of whether the exception will be granted, taking into consideration the enrollee’s needs and medical circumstances, along with the professional judgment of the enrollee’s provider.
SEC. 2.
Section 1367.241 of the Health and Safety Code is amended to read:1367.241.
(a) Notwithstanding any other law, on and after January 1, 2013, a health care service plan that provides coverage for prescription drugs shall accept only the prior authorization form developed pursuant to subdivision(b) (1) If a health care service plan or a contracted physician group fails to send an approval or denial within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon receipt of a completed prior authorization request or step therapy exception request from a prescribing provider, the prior authorization request or step therapy exception request shall be deemed to have been granted. The requirements of this subdivision shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or
Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code. Medi-Cal managed care health care service plans that contract under those chapters shall not be required to maintain an external exception request review as provided in Section 156.122 of Title 45 of the Code of Federal Regulations.
(2) If a request for a step therapy override exception is
incomplete or additional clinically relevant information is required, the health care service plan or utilization review organization shall notify the prescribing practitioner within 72 hours of submission, or 24 hours in exigent circumstances, what additional or clinically relevant information is required in order to approve or deny the step therapy exception request or appeal pursuant to the criteria disclosed in subdivision (a). appeal. Once the requested information is submitted, the applicable time period to grant or deny a step therapy exception request or appeal shall apply. If a determination or request for incomplete or clinically relevant information by a health care service plan or utilization review organization
is not received by the prescribing practitioner within the time allotted, the exception or appeal shall be deemed granted. In the event of a denial, the health care service plan or utilization review organization shall inform the patient of a potential appeal process.
(c) On or before January 1, 2017, the department and the Department of Insurance shall jointly develop a uniform prior authorization form. Notwithstanding any other law, on and after July 1, 2017, or six months after the form is completed pursuant to this section, whichever is later, every prescribing provider shall use that uniform prior authorization form, or an electronic prior authorization process described in subdivision (e), to request prior authorization for coverage of prescription drugs and every health care service plan shall accept that form or electronic process as
sufficient to request prior authorization for prescription drugs.
(d) The prior authorization form developed pursuant to subdivision (c) shall meet the following criteria:
(1) The form shall not exceed two pages.
(2) The form shall be made electronically available by the department and the health care service plan.
(3) The completed form may also be electronically submitted from the prescribing provider to the health care service plan.
(4) The department and the Department of Insurance shall develop the form with input from interested parties from at least one public meeting.
(5) The department and the Department of Insurance, in development of the standardized form, shall take into consideration the following:
(A) Existing prior authorization forms established by the federal Centers for Medicare and Medicaid Services and the State Department of Health Care Services.
(B) National standards pertaining to electronic prior authorization.
(e) A prescribing provider may use an electronic prior authorization system utilizing the standardized form described in subdivision (c) or an electronic process developed specifically for transmitting prior authorization information that meets the National Council for Prescription Drug Programs’
SCRIPT standard for electronic prior authorization transactions.
(f) Subdivision (a) does not apply if any of the following occurs:
(1) A contracted physician group is delegated the financial risk for prescription drugs by a health care service plan.
(2) A contracted physician group uses its own internal prior authorization process rather than the health care service plan’s prior authorization process for plan enrollees.
(3) A contracted physician group is delegated a utilization management function by the health care service plan concerning any prescription drug, regardless of the delegation of financial risk.
(g)
For prescription drugs, prior authorization requirements described in subdivisions (c) and (e) apply regardless of how that benefit is classified under the terms of the health plan’s group or individual contract.
(h) For purposes of this section:
(1) “Prescribing provider” shall include a provider authorized to write a prescription, pursuant to subdivision (a) of Section 4040 of the Business and Professions Code, to treat a medical condition of an enrollee.
(2) “Exigent circumstances” exist when an enrollee is suffering from a health condition that may seriously jeopardize the enrollee’s life, health, or ability to regain maximum function or when an enrollee is undergoing a current course of
treatment using a nonformulary drug.
(3) “Completed prior authorization request” means a completed uniform prior authorization form developed pursuant to subdivision (c), or a completed request submitted using an electronic prior authorization system described in subdivision (e), or, for contracted physician groups described in subdivision (f), the process used by the contracted physician group.
(4) “Step therapy exception” means a step therapy protocol that is overridden in favor of immediate coverage of the prescription drug prescribed by a health care provider.
the exception to the step therapy process and the determination of whether the exception will be granted, taking into consideration the enrollee’s needs and medical circumstances, along with the professional judgment of the enrollee’s provider.
SEC. 3.
Section 1367.244 of the Health and Safety Code is amended to read:1367.244.
(a) A request for an exception to a health care service plan’s step therapy process for prescription drugs may be submitted in the same manner as a request for prior authorization for prescription drugs pursuant to Section 1367.241, and shall be treated in the same manner, and shall be responded to by the health care service plan in the same manner, as a request for prior authorization for prescription drugs.(b) The department and the Department of Insurance shall include a provision for step therapy exception requests in the uniform prior authorization form developed pursuant to subdivision (c) of Section 1367.241.
(c) “Step therapy exception” means a step therapy protocol that is overridden in favor of immediate coverage of the prescription drug prescribed by a health care provider. the exception to the step therapy process and the determination of whether the exception will be granted, taking into consideration the enrollee’s needs and medical circumstances, along with the professional judgment of the enrollee’s provider.
SEC. 4.
Section 10123.191 of the Insurance Code is amended to read:10123.191.
(a) Notwithstanding any other law, on and after January 1, 2013, a health insurer that provides coverage for prescription drugs shall utilize and accept only the prior authorization form developed pursuant to subdivision (c), or an electronic prior authorization process described in subdivision (e), when requiring prior authorization for prescription drugs.(b) (1) If a health insurer or a contracted physician group fails to send an approval or denial within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon receipt of a completed prior authorization request or step therapy exception request from a prescribing provider,
the prior authorization request or step therapy exception request shall be deemed to have been granted.
(2) If a request for a step therapy override exception is incomplete or additional clinically relevant information is required, the insurer or utilization review organization shall notify the prescribing practitioner within 72 hours of submission, or 24 hours in exigent circumstances, what additional or clinically relevant information is required in order to approve or deny the step therapy exception request or appeal pursuant to the criteria disclosed in subdivision (a). appeal. Once the requested information is submitted, the applicable time period to grant or deny
a step therapy exception request or appeal shall apply. If a determination or request for incomplete or clinically relevant information by an insurer or utilization review organization is not received by the prescribing practitioner within the time allotted, the exception or appeal shall be deemed granted. In the event of a denial, the insurer or utilization review organization shall inform the patient of a potential appeal process.
(c) On or before January 1, 2017, the department and the Department of Managed Health Care shall jointly develop a uniform prior authorization form. Notwithstanding any other law, on and after July 1, 2017, or six months after the form is completed pursuant to this section, whichever is later, every prescribing provider shall use that uniform prior authorization form, or an electronic prior authorization
process described in subdivision (e), to request prior authorization for coverage of prescription drugs and every health insurer shall accept that form or electronic process as sufficient to request prior authorization for prescription drugs.
(d) The prior authorization form developed pursuant to subdivision (c) shall meet the following criteria:
(1) The form shall not exceed two pages.
(2) The form shall be made electronically available by the department and the health insurer.
(3) The completed form may also be electronically submitted from the prescribing provider to the health insurer.
(4) The
department and the Department of Managed Health Care shall develop the form with input from interested parties from at least one public meeting.
(5) The department and the Department of Managed Health Care, in development of the standardized form, shall take into consideration the following:
(A) Existing prior authorization forms established by the federal Centers for Medicare and Medicaid Services and the State Department of Health Care Services.
(B) National standards pertaining to electronic prior authorization.
(e) A prescribing provider may use an electronic prior authorization system utilizing the standardized form described in
subdivision (c) or an electronic process developed specifically for transmitting prior authorization information that meets the National Council for Prescription Drug Programs’ SCRIPT standard for electronic prior authorization transactions.
(f) Subdivision (a) does not apply if any of the following occurs:
(1) A contracted physician group is delegated the financial risk for the pharmacy or medical drug benefit by a health insurer.
(2) A contracted physician group uses its own internal prior authorization process rather than the health insurer’s prior authorization process for the health insurer’s insureds.
(3) A contracted physician group is delegated a
utilization management function by the health insurer concerning any prescription drug, regardless of the delegation of financial risk.
(g) For prescription drugs, prior authorization requirements described in subdivisions (c) and (e) apply regardless of how that benefit is classified under the terms of the health insurer’s group or individual policy.
(h) A health insurer shall maintain a process for an external exception request review that complies with subdivision (c) of Section 156.122 of Title 45 of the Code of Federal Regulations.
(i) For an individual, small group, or large group health insurance policy, a health insurer that provides coverage for outpatient prescription drugs shall comply with subdivision (c) of Section
156.122 of Title 45 of the Code of Federal Regulations.
(j) For purposes of this section:
(1) “Prescribing provider” shall include a provider authorized to write a prescription, pursuant to subdivision (a) of Section 4040 of the Business and Professions Code, to treat a medical condition of an insured.
(2) “Exigent circumstances” exist when an insured is suffering from a health condition that may seriously jeopardize the insured’s life, health, or ability to regain maximum function or when an insured is undergoing a current course of treatment using a nonformulary drug.
(3) “Completed prior authorization request” means a completed uniform prior authorization
form developed pursuant to subdivision (c), or a completed request submitted using an electronic prior authorization system described in subdivision (e), or, for contracted physician groups described in subdivision (f), the process used by the contracted physician group.
(4) “Step therapy exception” means a step therapy protocol that is overridden in favor of immediate coverage of the prescription drug prescribed by a health care provider. the exception to the step therapy process and the determination of whether the exception will be granted, taking into consideration the insured’s needs and medical circumstances, along with the professional judgment of the insured’s provider.
SEC. 5.
Section 10123.197 of the Insurance Code is amended to read:10123.197.
(a) A request for an exception to a health insurer’s step therapy process for prescription drugs may be submitted in the same manner as a request for prior authorization for prescription drugs pursuant to Section 10123.191, and shall be treated in the same manner, and shall be responded to by the health insurer in the same manner, as a request for prior authorization for prescription drugs.(b) The department and the Department of Managed Health Care shall include a provision for step therapy exception requests in the uniform prior authorization form developed pursuant to subdivision (c) of Section 10123.191.
(c) “Step therapy exception” means a step therapy protocol that is overridden in favor of immediate coverage of the prescription drug prescribed by a health care provider. the exception to the step therapy process and the determination of whether the exception will be granted, taking into consideration the insured’s needs and medical circumstances, along with the professional judgment of the insured’s provider.
SEC. 6.
Section 10123.201 of the Insurance Code is amended to read:10123.201.
(a) A policy of health insurance that covers outpatient prescription drugs shall cover medically necessary drugs. The policy may provide for step therapy and prior authorization consistent with Section 1342.7 of the Health and Safety Code and any regulations adopted pursuant to that section.(b) (1) Commencing January 1, 2017, an insurer shall maintain a pharmacy and therapeutics committee that shall be responsible for developing, maintaining, and overseeing any drug formulary list. If the insurer delegates responsibility for the formulary to any entity, the obligation of the insurer to comply with this part shall not be waived.
(2) The pharmacy and therapeutics committee board membership shall conform with both of the following:
(A) Represent a sufficient number of clinical specialties to adequately meet the needs of insureds.
(B) Consist of a majority of individuals who are practicing physicians, practicing pharmacists, and other practicing health professionals who are licensed to prescribe drugs.
(3) Members of the board shall abstain from voting on any issue in which the member has a conflict of interest with respect to the issuer or a pharmaceutical manufacturer.
(4) At least 20 percent of the board membership shall not have a
conflict of interest with respect to the issuer or any pharmaceutical manufacturer.
(5) The pharmacy and therapeutics committee shall meet at least quarterly and shall maintain written documentation of the rationale for its decisions regarding the development of, or revisions to, the formulary drug list.
(6) The pharmacy and therapeutics committee shall do all of the following:
(A) Develop and document procedures to ensure appropriate drug review and inclusion.
(B) Base clinical decisions on the strength of the scientific evidence and standards of practice, including assessing peer-reviewed medical literature, pharmacoeconomic studies, outcomes
research data, and other related information.
(C) Consider the therapeutic advantages of drugs in terms of safety and efficacy when selecting formulary drugs.
(D) Review policies that guide exceptions and other utilization management processes, including drug utilization review, quantity limits, and therapeutic interchange.
(E) Evaluate and analyze treatment protocols and procedures related to the insurer’s formulary at least annually.
(F) Review and approve all clinical prior authorization criteria, step therapy protocols, and quantity limit restrictions applied to each covered drug.
(G) Review new
United States Food and Drug Administration-approved drugs and new uses for existing drugs.
(H) Ensure the insurer’s formulary drug list or lists cover a range of drugs across a broad distribution of therapeutic categories and classes and recommended drug treatment regimens that treat all disease states and does not discourage enrollment by any group of insureds.
(I) Ensure the insurer’s formulary drug list or lists provide appropriate access to drugs that are included in broadly accepted treatment guidelines and that are indicative of general best practices at the time.
(7) This subdivision shall be interpreted consistent with federal guidance issued under paragraph (3) of subdivision (a) of Section 156.122 of Title 45
of the Code of Federal Regulations. This subdivision shall apply to the individual, small group, and large group markets.
(c) (1) A health insurer may impose prior authorization requirements on prescription drug benefits, consistent with the requirements of this part.
(2) (A) If there is more than one drug that is appropriate for the treatment of a medical condition, a health insurer may require step therapy.
(B) A step therapy exception shall be expeditiously granted if any of the following criteria are met: the healthcare
provider submits justification and supporting clinical documentation, if needed, to support the health care provider’s statement that any of the following are met:
(i) The required prescription drug is contraindicated or will likely cause an adverse reaction or physical or mental harm to the insured.
(ii) The insured’s provider expects the required prescription drug is expected to be ineffective based on the known clinical characteristics of the insured and the known characteristics and history of the
prescription drug regimen.
(iii) The insured has tried the required prescription drug, or another prescription drug in the same pharmacologic class or with the same mechanism of action, while covered by their current or previous health insurance policy or health benefit plan contract, contract or Medicaid, and that prescription drug was discontinued due to lack of efficacy or effectiveness, diminished effect, or an adverse event. The health insurer may require the submission of completed documentation demonstrating that the insured has tried the required prescription drug before it was discontinued.
(iv) The required prescription drug is not in the best interest of the insured, based on medical necessity. necessity because the required drug is expected to cause any of the following:
(I) Worsen a comorbid condition of the insured.
(II) Decrease the insured’s ability to maintain a reasonable functional ability in performing daily activities.
(III) Be a significant barrier to the insured’s adherence to or compliance with the insured’s plan of care.
(v) The insured is stable on a prescription drug selected by their health care provider for the medical condition under consideration while covered by their current or previous health insurance policy or health care service plan contract. contract or Medicaid.
(D) This section does not prohibit either of the following:
(i) An insurer, health benefit plan, or utilization review organization from requiring an insured to try an AB-rated generic equivalent or interchangeable biological
product before providing coverage for the equivalent branded prescription drug.
(ii) A health care provider from prescribing a prescription drug that is determined to be medically appropriate.
(3) An insurer shall provide coverage for the medically necessary dosage and quantity of the drug prescribed for the treatment of a medical condition consistent with professionally recognized standards of practice.
(4) For plan years commencing on or after January 1, 2017, an insurer that provides essential health benefits shall allow an insured to access prescription drug benefits at an in-network retail pharmacy unless the prescription drug is subject to restricted distribution by the United States Food and
Drug Administration or requires special handling, provider coordination, or patient education that cannot be provided by a retail pharmacy. A nongrandfathered individual or small group health insurer may charge an insured a different cost sharing for obtaining a covered drug at a retail pharmacy, but all cost sharing shall count toward the policy’s annual limitation on cost sharing consistent with Section 10112.28.
(d) An insured or the insured’s designee, guardian, primary care physician, or health care provider may file an appeal of a prior authorization or the denial of a step therapy exception request. A health insurer shall designate a clinical peer to review appeals, because these appeals pertain to medical or clinical matters and an appeal shall be reviewed by an appropriate health care professional. A clinical peer reviewing an
appeal shall not have had any involvement in the initial determination that is the subject of the appeal.
(e) Every health insurer that provides prescription drug benefits shall maintain all of the following information, which shall be made available to the commissioner upon request:
(1) The complete drug formulary or formularies of the insurer, if the insurer maintains a formulary, including a list of the prescription drugs on the formulary of the insurer by major therapeutic category with an indication of whether any drugs are preferred over other drugs.
(2) Records developed by the pharmacy and therapeutics committee of the insurer, or by others responsible for developing, modifying, and overseeing formularies,
including medical groups, individual practice associations, and contracting pharmaceutical benefit management companies, used to guide the drugs prescribed for the insureds of the insurer, that fully describe the reasoning behind formulary decisions.
(3) Any insurer arrangements with prescribing providers, medical groups, individual practice associations, pharmacists, contracting pharmaceutical benefit management companies, or other entities that are associated with activities of the insurer to encourage formulary compliance or otherwise manage prescription drug benefits.
(f) The health insurer or utilization review organization shall report
report, the following information to the department annually, in a manner and format prescribed by the department: department, including, but not limited to, any of the following:
(1) The number of step therapy exception requests and prior authorization requests received.
(2) The type of health care providers or the medical specialties of the health care providers submitting requests.
(3) The number of step therapy exception
requests that were initially denied and the reasons for the denials.
(4) The number of step therapy exception requests that were initially approved.
(5) The number of step therapy exception denials that were reversed by an internal appeal or an external review.
(6) The medical conditions for which patients are granted
exceptions due to the likelihood that switching from the prescription drug will likely cause an adverse reaction or physical or mental harm to the insured.
(g) If an insurer provides prescription drug benefits, the commissioner shall, as part of its market conduct examination, review the performance of the insurer in providing those benefits, including, but not limited to, a review of the procedures and information maintained pursuant to this section, and describe the performance of the insurer as part of its report issued as part of its market conduct examination.
(h) The commissioner shall not publicly disclose any information reviewed pursuant to this section that is determined by the commissioner to be confidential pursuant to state law.
(i) For purposes of this section, the following definitions shall apply:
(1) “Authorization” means approval by the health insurer to provide payment for the prescription drug.
(2) “Clinical peer” means a health care professional who is in the same profession and the same or similar specialty as the health care provider who typically manages the medical condition, procedures, or treatment under review.
(3) “Step therapy” means a type of protocol that specifies the sequence in which different prescription drugs for a given medical condition and medically appropriate for a particular patient are to be prescribed.
(4) “Step therapy exception” means a step therapy protocol that is overridden in favor of immediate coverage of the prescription drug prescribed by a health care provider. the exception to the step therapy process and the determination of whether the exception will be granted, taking into consideration the insured’s needs and medical circumstances, along with the professional judgment of the insured’s provider.
(5) “Utilization review organization” means an entity that conducts utilization review, other than a health insurer performing its own utilization review.
(j) Nonformulary prescription drugs shall include any
drug for which an insured’s copayment or out-of-pocket costs are different than the copayment for a formulary prescription drug, except as otherwise provided by law or regulation.
(k) This section does not affect an insured’s or policyholder’s eligibility to submit a complaint to the department for review or to apply to the department for an independent medical review under Article 3.5 (commencing with Section 10169).
(l) This section does not restrict or impair the application of any other provision of this part.
