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AB-1353 Health care coverage: prescription drugs: continuity of care.(2017-2018)

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Date Published: 03/23/2017 09:00 PM
AB1353:v97#DOCUMENT

Amended  IN  Assembly  March 23, 2017
Amended  IN  Assembly  March 13, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 1353


Introduced by Assembly Member Waldron

February 17, 2017


An act to add Sections 1367.245 and 1367.246 to the Health and Safety Code, and to add Sections 10123.203 and 10123.204 to the Insurance Code, relating to health care coverage.


LEGISLATIVE COUNSEL'S DIGEST


AB 1353, as amended, Waldron. Health care coverage: prescription drugs: continuity of care.
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. Existing law makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Insurance Commissioner. Existing law requires a health care service plan contract or a health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs, including nonformulary drugs determined to be medically necessary, and authorizes a health care service plan or health insurer to utilize formulary, prior authorization, step therapy, or other reasonable medical management practices in the provision of outpatient prescription drug coverage. Existing law requires a health care service plan health insurer that provides coverage for prescription drugs to utilize a specified uniform prior authorization form or electronic authorization process for prescription drugs that require prior authorization by the plan or health insurer, and requires the plan or health insurer to respond to those prior authorization requests within 72 hours for nonurgent requests and 24 hours if exigent circumstances, as defined, exist. Existing law authorizes a request for an exception to a health care service plan’s or health insurer’s step therapy process for prescription drugs to be submitted in the same manner as a request for prior authorization for prescription drugs, and requires the plan or health insurer to treat, and respond to, those exception requests in the same manner as a request for prior authorization for prescription drugs. Existing law prohibits a health care service plan contract that covers prescription drug benefits from limiting or excluding coverage for a drug for an enrollee if the drug previously had been approved for coverage by the plan for a medical condition of the enrollee and the plan’s prescribing provider continues to prescribe the drug for the medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition.
This bill would require a health care service plan and health insurer that provides coverage for outpatient prescription drugs to establish an expeditious process, as described, by which enrollees and insureds, enrollees’ and insureds’ designees, or prescribing providers may request and obtain an exception to any prior authorization process or any other utilization management or medical management practices utilized by the plan or health insurer for medically necessary prescription drugs, and would require a plan or health insurer to grant an exception request under these provisions under specified circumstances to ensure continuity of care for an enrollee or insured who is medically stable and was either previously prescribed the prescription drug either within 100 days prior to enrollment or if if, within 100 days prior to the exception request, the prescription drug was previously approved for coverage by the plan or insurer. insurer for the same medical condition. The bill would require a plan or health insurer to respond to an exception request within 72 hours, or within 24 hours if exigent circumstances exist, following receipt of the exception request. The bill would require a plan or health insurer that denies an exception request to provide the reasons for the denial in a notice provided to the enrollee or insured, as specified.
The bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2018, that provides coverage for outpatient prescription drugs to provide coverage, without imposing a prior authorization or step therapy process, or any other reasonable utilization management or medical management practices, for a medically necessary nonformulary drug that was prescribed for an enrollee or insured that was, within the 100-day period immediately preceding the date of the prescription, previously included on a formulary or formularies maintained by the plan or health insurer if specified conditions are satisfied, including that the enrollee’s or insured’s prescribing provider has determined that prescribing an alternative formulary prescription drug is not medically appropriate for the enrollee or insured or represents a significant health risk to the enrollee or insured.
By imposing new requirements on a health care service plan, the willful violation of which is a crime, this 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   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1367.245 is added to the Health and Safety Code, immediately following Section 1367.244, to read:

1367.245.
 (a) Notwithstanding Section 1367.24, 1367.241, or any other law, a health care service plan that provides coverage for outpatient prescription drugs shall establish an expeditious process, as described in this section, by which enrollees, enrollees’ designees, or prescribing providers may request and obtain an exception to any prior authorization process or any other utilization management or medical management practices utilized by the plan for medically necessary prescription drugs.
(b) A health care service plan shall grant an exception request under this section if both of the following are met:
(1) Either the enrollee was previously prescribed the prescription drug prior to within 100 days prior to his or her enrollment in the health care service plan or the prescription drug had had, within 100 days prior to the exception request, been previously approved for coverage by the plan for a the same medical condition of the enrollee.
(2) The enrollee is medically stable and the enrollee’s prescribing provider continues continues, at least once every 100 days from the date of the last prescription for the same drug, to prescribe the drug for the same medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition.
(c) (1) A health care service plan shall respond to an exception request within 72 hours following receipt of the exception request. A plan that grants an exception request under this subdivision shall provide coverage of the prescription drug for the duration of the medical condition for which the medication was prescribed.
(2) A health care service plan shall provide that an exception request may be obtained within 24 hours if an enrollee is suffering from a health condition that may seriously jeopardize his or her life, health, or ability to regain maximum function or if an enrollee is undergoing a current course of treatment using that prescription drug. A plan that grants an exception request under this subdivision based on exigent circumstances shall provide coverage for the duration of the medical condition for which the medication was prescribed.
(d) If a health care service plan fails to respond within 72 hours, or within 24 hours if exigent circumstances exist, upon receipt of a completed exception request, the exception request shall be deemed to have been granted.
(e) A health care service plan that denies a request made pursuant to this section to obtain an exception to any prior authorization process or any other reasonable utilization management or medical management practices utilized by the plan for a medically necessary prescription drug shall provide the reasons for the denial in a notice provided to the enrollee. The notice shall indicate that the enrollee may file a grievance with the plan if the enrollee objects to the denial. The notice shall comply with subdivision (b) of Section 1368.02.

SEC. 2.

 Section 1367.246 is added to the Health and Safety Code, immediately following Section 1367.245, to read:

1367.246.
 Notwithstanding subdivision (c) of Section 1367.22, Section 1367.24, or any other law, a health care service plan contract issued, amended, or renewed on or after January 1, 2018, that provides coverage for outpatient prescription drugs shall provide coverage, without imposing a prior authorization or step therapy process, or any other reasonable utilization management or medical management practices, for a medically necessary nonformulary prescription drug that was prescribed for an enrollee that was, within the 100-day period immediately preceding the date of the prescription, previously included on a formulary or formularies for outpatient prescription drugs maintained by the plan if all of the following conditions are satisfied:
(a) The enrollee was was, within the immediately preceding 100 days, previously prescribed that nonformulary prescription drug.
(b) The enrollee is medically stable.
(c) The drug previously had been approved for coverage by the plan for a the same medical condition of the enrollee and the enrollee’s prescribing provider continues continues, at least once every 100 days from the date of the last prescription for the same drug, to prescribe the drug for the same medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition.
(d) The enrollee’s prescribing provider has determined that prescribing an alternative formulary prescription drug is not medically appropriate for the enrollee or represents a significant health risk to the enrollee.

SEC. 3.

 Section 10123.203 is added to the Insurance Code, to read:

10123.203.
 (a) Notwithstanding Section 10123.191 or any other law, a health insurer that provides coverage for outpatient prescription drugs shall establish an expeditious process, as described in this section, by which insureds, insureds’ designees, or prescribing providers may request and obtain an exception to any prior authorization process or any other utilization management or medical management practices utilized by the health insurer for medically necessary prescription drugs.
(b) A health insurer shall grant an exception request under this section if both of the following are met:
(1) Either the insured was previously prescribed the prescription drug within 100 days prior to enrollment or the prescription drug had had, within 100 days prior to the exception request, been previously approved for coverage by the health insurer for a the same medical condition of the insured.
(2) The insured is medically stable and the insured’s prescribing provider continues continues, at least once every 100 days from the date of the last prescription for the same drug, to prescribe the drug for the same medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the insured’s medical condition.
(c) (1) A health insurer shall respond to an exception request within 72 hours following receipt of the exception request. A health insurer that grants an exception request under this subdivision shall provide coverage of the prescription drug for the duration of the medical condition for which the medication was prescribed.
(2) A health insurer shall provide that an exception request may be obtained within 24 hours if an insured is suffering from a health condition that may seriously jeopardize his or her life, health, or ability to regain maximum function or if an insured is undergoing a current course of treatment using that prescription drug. A health insurer that grants an exception request under this subdivision based on exigent circumstances shall provide coverage for the duration of the medical condition for which the medication was prescribed.
(d) If a health insurer fails to respond within 72 hours, or within 24 hours if exigent circumstances exist, upon receipt of a completed exception request, the exception request shall be deemed to have been granted.
(e) A health insurer that denies a request made pursuant to this section to obtain an exception to any prior authorization process or any other reasonable utilization management or medical management practices utilized by the health insurer for a medically necessary prescription drug shall provide the reasons for the denial in a notice provided to the insured. The notice shall indicate that the insured may file a grievance with the health insurer if the insured objects to the denial.

SEC. 4.

 Section 10123.204 is added to the Insurance Code, to read:

10123.204.
 Notwithstanding any other law, a health insurance policy issued, amended, or renewed on or after January 1, 2018, that provides coverage for outpatient prescription drugs shall provide coverage, without imposing a prior authorization or step therapy process, or any other reasonable utilization management or medical management practices, for a medically necessary nonformulary prescription drug that was prescribed for an insured that was, within the 100-day period immediately preceding the date of the prescription, previously included on a formulary or formularies for outpatient prescription drugs maintained by the health insurer if all of the following conditions are satisfied:
(a) The insured was was, within the immediately preceding 100 days, previously prescribed that nonformulary prescription drug.
(b) The insured is medically stable.
(c) The drug previously had been approved for coverage by the health insurer for a the same medical condition of the insured and the insured’s prescribing provider continues continues, at least once every 100 days from the date of the last prescription for the same drug, to prescribe the drug for the same medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the insured’s medical condition.
(d) The insured’s prescribing provider has determined that prescribing an alternative formulary prescription drug is not medically appropriate for the insured or represents a significant health risk to the insured.

SEC. 5.

 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.