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AB-2203 Insulin cost-sharing cap.(2019-2020)

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Date Published: 07/09/2020 09:00 PM
AB2203:v96#DOCUMENT

Amended  IN  Senate  July 09, 2020
Amended  IN  Assembly  May 20, 2020
Amended  IN  Assembly  May 04, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2203

Introduced by Assembly Member Nazarian
(Coauthors: Assembly Members Wood, Santiago, Waldron, and Weber)

February 12, 2020

An act to amend Section 1367.51 of the Health and Safety Code, and to amend Section 10176.61 of the Insurance Code, relating to health insurance.


LEGISLATIVE COUNSEL'S DIGEST


AB 2203, as amended, Nazarian. Insulin cost-sharing cap.
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’s requirements a crime. Existing law requires every health care service plan contract that covers hospital, medical, or surgical expenses to include coverage for specified equipment and supplies for the management and treatment of diabetes.
Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health an insurance policy that covers hospital, medical, or surgical expenses that is issued, amended, delivered, or renewed on or after January 1, 2000, to include coverage for specified equipment and supplies for the management and treatment of insulin-using diabetes, non-insulin-using diabetes, and gestational diabetes as medically necessary, even if the items are available without a prescription. Existing law requires a health an insurance policy issued, amended, delivered, or renewed on or after January 1, 2000, that covers prescription benefits to include coverage for specified diabetes management prescription items, including insulin and glucagon.
This bill would prohibit a health care service plan contract or a health specified disability insurance policy that is issued, amended, delivered, or renewed on or after January 1, 2021, from imposing cost sharing on a covered insulin prescription, except for a copayment not to exceed $50 per 30-day supply of insulin, and no more than $100 total per month, regardless of the amount or type of insulin. The bill would apply these cost-sharing limitations until January 1, 2024.
The bill would also authorize the Attorney General to investigate pricing of prescription insulin drugs to ensure adequate pricing protections for consumers, and would authorize the Attorney General, by November 1, 2022, to issue and make publicly available a report detailing its findings from any insulin pricing investigations. The bill would exempt trade secret or proprietary business information submitted to the Attorney General pursuant to these provisions from specified disclosure requirements. The bill would make these provisions applicable until January 1, 2024.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
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.

 The Legislature finds and declares that:
(a) Approximately 263,000 Californians are diagnosed with type 1 diabetes each year. Approximately 4,037,000 Californian adults have diabetes.
(b) Every Californian with type 1 diabetes, and many with type 2 diabetes, rely on daily doses of insulin to survive.
(c) Insulin prices have nearly tripled, creating financial hardships for people who rely on it to survive.
(d) One in four people using insulin have reported insulin underuse due to the high cost of insulin.
(e) Diabetes is the seventh leading cause of death and a leading cause of disabling and life-threatening complications, including heart disease, stroke, kidney failure, amputation of the lower extremities, and new cases of blindness among adults.
(f) Studies have shown that managing diabetes can prevent the complications associated with diabetes.
(g) Therefore, it is important to enact policies to reduce the costs for Californians with diabetes to obtain life-saving and life-sustaining insulin.

SEC. 2.

 Section 1367.51 of the Health and Safety Code is amended to read:

1367.51.
 (a)  A health care service plan contract, except a specialized health care service plan contract, that is issued, amended, delivered, or renewed on or after January 1, 2000, and that covers hospital, medical, or surgical expenses shall include coverage for the following equipment and supplies for the management and treatment of insulin-using diabetes, non-insulin-using diabetes, and gestational diabetes as medically necessary, even if the items are available without a prescription:
(1)  Blood glucose monitors and blood glucose testing strips.
(2)  Blood glucose monitors designed to assist the visually impaired.
(3)  Insulin pumps and all related necessary supplies.
(4)  Ketone urine testing strips.
(5)  Lancets and lancet puncture devices.
(6)  Pen delivery systems for the administration of insulin.
(7)  Podiatric devices to prevent or treat diabetes-related complications.
(8)  Insulin syringes.
(9)  Visual aids, excluding eyewear, to assist the visually impaired with proper dosing of insulin.
(b)  Every health care service plan contract, except a specialized health care service plan contract, that is issued, amended, delivered, or renewed on or after January 1, 2000, that covers prescription benefits shall include coverage for the following prescription items if the items are determined to be medically necessary:
(1)  Insulin.
(2)  Prescriptive medications for the treatment of diabetes.
(3)  Glucagon.
(c)  The copayments and deductibles for the benefits specified in subdivisions (a) and (b) shall not exceed those established for similar benefits within the given plan.
(d) (1) Notwithstanding subdivision (c), for every health care service plan contract that is issued, amended, delivered, or renewed on or after January 1, 2021, the copayment for an insulin prescription covered pursuant to subdivision (b) shall not exceed fifty dollars ($50) per 30-day supply, and no more than one hundred dollars ($100) total per month, regardless of the amount or type of insulin needed to fill the covered person’s prescription or prescriptions.
(2) A health care service plan contract that is issued, amended, delivered, or renewed on or after January 1, 2021, shall not impose a deductible, coinsurance, or other cost-sharing requirement on an insulin prescription, except for a copayment subject to the limitations in paragraph (1).
(3) When the State of California has the capacity to label or produce insulin, the copayment limitations in paragraph (1) shall apply to an insulin product, or any therapeutic equivalent, labeled or produced by the State.
(e) Every plan shall provide coverage for diabetes outpatient self-management training, education, and medical nutrition therapy necessary to enable an enrollee to properly use the equipment, supplies, and medications set forth in subdivisions (a) and (b), and additional diabetes outpatient self-management training, education, and medical nutrition therapy upon the direction or prescription of those services by the enrollee’s participating physician. If a plan delegates outpatient self-management training to contracting providers, the plan shall require contracting providers to ensure that diabetes outpatient self-management training, education, and medical nutrition therapy are provided by appropriately licensed or registered health care professionals.
(f) The diabetes outpatient self-management training, education, and medical nutrition therapy services identified in subdivision (e) shall be provided by appropriately licensed or registered health care professionals as prescribed by a participating health care professional legally authorized to prescribe the service. These benefits shall include, but not be limited to, instruction that will enable diabetic patients and their families to gain an understanding of the diabetic disease process, and the daily management of diabetic therapy, in order to thereby avoid frequent hospitalizations and complications.
(g) The copayments for the benefits specified in subdivision (e) shall not exceed those established for physician office visits by the plan.
(h) Every health care service plan governed by this section shall disclose the benefits covered pursuant to this section in the plan’s evidence of coverage and disclosure forms.
(i) A health care service plan may not reduce or eliminate coverage as a result of the requirements of this section.
(j) Nothing in this section shall be construed to deny or restrict in any way the department’s authority to ensure plan compliance with this chapter when a plan provides coverage for prescription drugs.
(k) (1) The Attorney General is authorized to investigate pricing of prescription insulin drugs made available to California consumers, considering the role of each entity in the entire supply chain, to ensure adequate consumer protections in pricing of prescription insulin drugs and determine whether additional consumer protections are needed.
(2) As part of the investigation by the Attorney General, the Attorney General is authorized to do the following:
(A) Gather, compile, and analyze information concerning the organization, business practices, pricing information, data, reports, or other information that the Attorney General finds necessary to accomplish the purposes of paragraph (1) from companies that manufacture, or offer for sale, prescription insulin drugs in California. The Attorney General may also consider any publicly available information related to drug pricing.
(B) Issue a civil investigative demand requiring a state department, health care service plan, pharmacy benefit manager, or manufacturer of prescription insulin drugs that are manufactured or offered for sale in California, to furnish material, answers, data, or other relevant information.
(3) By November 1, 2022, the Attorney General may issue and make available to the public a report detailing its findings from the investigation conducted pursuant to this subdivision. Upon completion of the report, the Attorney General shall present the report to the Governor, the Insurance Commissioner, and the Legislature. The report may include:
(A) A summary of insulin pricing practices and variables that contribute to pricing of health care service plans.
(B) Public policy recommendations to control and prevent overpricing of prescription insulin drugs made available to California consumers.
(C) Any recommendations for improvements to California consumer protection laws to prevent deceptive sales practices related to the sale of prescription insulin drugs, including the pricing of those drugs.
(D) Any other information the Attorney General finds necessary.
(4) A person or business subject to this subdivision shall not be compelled to reveal information that is considered a trade secret or proprietary business information. Trade secret or proprietary business information submitted to the Attorney General pursuant to this subdivision is exempt from the disclosure requirements of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and shall not be made available. The report created pursuant to paragraph (3) shall not reveal any information considered a trade secret or proprietary business information.
(l) Subdivisions (d) and (k) of this section shall remain in effect only until January 1, 2024, and as of that date are inoperative.

SEC. 3.

 Section 10176.61 of the Insurance Code is amended to read:

10176.61.
 (a) An insurer issuing, amending, delivering, or renewing a health disability insurance policy that covers hospital, medical, or surgical expenses on or after January 1, 2000, shall include coverage for the following equipment and supplies for the management and treatment of insulin-using diabetes, non-insulin-using diabetes, and gestational diabetes as medically necessary, even if the items are available without a prescription:
(1) Blood glucose monitors and blood glucose testing strips.
(2) Blood glucose monitors designed to assist the visually impaired.
(3) Insulin pumps and all related necessary supplies.
(4) Ketone urine testing strips.
(5) Lancets and lancet puncture devices.
(6) Pen delivery systems for the administration of insulin.
(7) Podiatric devices to prevent or treat diabetes-related complications.
(8) Insulin syringes.
(9) Visual aids, excluding eyewear, to assist the visually impaired with proper dosing of insulin.
(b) An insurer issuing, amending, delivering, or renewing a health disability insurance policy on or after January 1, 2000, that covers prescription benefits shall include coverage for the following prescription items if the items are determined to be medically necessary:
(1) Insulin.
(2) Prescriptive medications for the treatment of diabetes.
(3) Glucagon.
(c) The coinsurances and deductibles for the benefits specified in subdivisions (a) and (b) shall not exceed those established for similar benefits within the given policy.
(d) (1) Notwithstanding subdivision (c), for every insurer issuing, amending, delivering, or renewing a health disability insurance policy that covers prescription drug benefits on or after January 1, 2021, the copayment for an insulin prescription covered pursuant to subdivision (b) shall not exceed fifty dollars ($50) per 30-day supply, and no more than one hundred dollars ($100) total per month, regardless of the amount or type of insulin needed to fill the covered person’s prescription or prescriptions.
(2) An insurer issuing, amending, delivering, or renewing a health disability insurance policy that covers prescription drug benefits on or after January 1, 2021, shall not impose a deductible, coinsurance, or other cost-sharing requirement on an insulin prescription, except for a copayment subject to the limitations in paragraph (1).
(3) When the State of California has the capacity to label or produce insulin, the copayment limitations in paragraph (1) shall apply to an insulin product, or any therapeutic equivalent, labeled or produced by the State.
(e) An insurer shall provide coverage for diabetes outpatient self-management training, education, and medical nutrition therapy necessary to enable an insured to properly use the equipment, supplies, and medications set forth in subdivisions (a) and (b) and additional diabetes outpatient self-management training, education, and medical nutrition therapy upon the direction or prescription of those services by the insured’s participating physician. If an insurer delegates outpatient self-management training to contracting providers, the insurer shall require contracting providers to ensure that diabetes outpatient self-management training, education, and medical nutrition therapy are provided by appropriately licensed or registered health care professionals.
(f) The diabetes outpatient self-management training, education, and medical nutrition therapy services identified in subdivision (e) shall be provided by appropriately licensed or registered health care professionals as prescribed by a health care professional legally authorized to prescribe the services.
(g) The coinsurances and deductibles for the benefits specified in subdivision (e) shall not exceed those established for physician office visits by the insurer.
(h) A health disability insurer governed by this section shall disclose the benefits covered pursuant to this section in the insurer’s evidence of coverage and disclosure policy forms.
(i) An insurer may not reduce or eliminate coverage as a result of the requirements of this section.
(j) This section does not apply to vision-only, dental-only, accident-only, specified disease, hospital indemnity, Medicare supplement, long-term care, or disability income insurance, except that for accident-only, specified disease, and hospital indemnity insurance coverage, benefits under this section only apply to the extent that the benefits are covered under the general terms and conditions that apply to all other benefits under the policy. Nothing in this section may be construed as imposing a new benefit mandate on accident-only, specified disease, or hospital indemnity insurance.
(k) (1) The Attorney General is authorized to investigate pricing of prescription insulin drugs made available to California consumers, considering the role of each entity in the entire supply chain, to ensure adequate consumer protections in pricing of prescription insulin drugs and determine whether additional consumer protections are needed.
(2) As part of the investigation by the Attorney General, the Attorney General is authorized to do the following:
(A) Gather, compile, and analyze information concerning the organization, business practices, pricing information, data, reports, or other information that the Attorney General finds necessary to accomplish the purposes of paragraph (1) from companies that manufacture, or offer for sale, prescription insulin drugs in California. The Attorney General may also consider any publicly available information related to drug pricing.
(B) Issue a civil investigative demand requiring a state department, health insurer, pharmacy benefit manager, or manufacturer of prescription insulin drugs that are manufactured or offered for sale in California, to furnish material, answers, data, or other relevant information.
(3) By November 1, 2022, the Attorney General may issue and make available to the public a report detailing its findings from the investigation conducted pursuant to this subdivision. Upon completion of the report, the Attorney General shall present the report to the Governor, the Insurance Commissioner, and the Legislature. The report may include:
(A) A summary of insulin pricing practices and variables that contribute to pricing of health insurance policies.
(B) Public policy recommendations to control and prevent overpricing of prescription insulin drugs made available to California consumers.
(C) Any recommendations for improvements to California consumer protection laws to prevent deceptive sales practices related to the sale of prescription insulin drugs, including the pricing of those drugs.
(D) Any other information the Attorney General finds necessary.
(4) A person or business subject to this subdivision shall not be compelled to reveal information that is considered a trade secret or proprietary business information. Trade secret or proprietary business information submitted to the Attorney General pursuant to this subdivision is exempt from the disclosure requirements of the California Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code) and shall not be made available. The report created pursuant to paragraph (3) shall not reveal any information considered a trade secret or proprietary business information.
(l) Subdivisions (d) and (k) of this section shall remain in effect only until January 1, 2024, and as of that date are inoperative.

SEC. 4.

 The Legislature finds and declares that Section 2 of this act, which amends Section 1367.51 of the Health and Safety Code, and Section 3 of this act, which amends Section 10176.61 of the Insurance Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:
In order to protect trade secrets and proprietary business information, the trade secrets and proprietary business information submitted to the Attorney General as part of its drug pricing investigation must remain confidential.

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.