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SB-853 Prescription drug coverage.(2021-2022)

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Date Published: 06/02/2022 09:00 PM
SB853:v96#DOCUMENT

Amended  IN  Assembly  June 02, 2022
Amended  IN  Senate  April 25, 2022
Amended  IN  Senate  February 28, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 853

Introduced by Senator Wiener

January 19, 2022

An act to amend Sections 1367.21 and 1367.22 of, and to add Section Sections 1367.26 and 1367.28 to, the Health and Safety Code, and to amend Section 10123.195 of, and to add Section Sections 10123.134 and 10123.190 to, the Insurance Code, relating to health care coverage.


LEGISLATIVE COUNSEL'S DIGEST


SB 853, as amended, Wiener. Prescription drug coverage.
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 provides for the regulation of health insurers disability insurers, including health insurers, by the Department of Insurance. Existing law generally authorizes a health care service plan or health insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law prohibits a health care service plan contract that covers prescription drug benefits or a specified health insurance policy from limiting or excluding coverage for a drug on the basis that the drug is prescribed for a use that is different from the use for which it was approved by the federal Food and Drug Administration if specified conditions are met. Existing law also prohibits a health care service plan that covers prescription drug benefits from limiting or excluding coverage for a drug that was previously approved for coverage if an enrollee continues to be prescribed that drug, as specified.
This bill would expand the above-described prohibitions to prohibit limiting or excluding coverage of a dose of a drug or dosage form. The bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2023, that covers prescription drug benefits to provide coverage for a drug, dose of a drug, or dosage form during utilization review and any appeals if that drug has been previously approved for a medical condition of the enrollee or insured and has been prescribed by a health care provider. The bill would prohibit a plan or insurer from seeking reimbursement, other than applicable cost sharing, for that coverage if the final utilization review decision is to deny coverage for the prescription drug, dose, or dosage form. drug, dose, or dosage form, and would apply the prohibition to blanket disability insurance policies and certificates. The bill would prohibit a health care service plan or disability insurer that provides coverage for prescription drugs from limiting or declining to cover a drug or dose of a drug as prescribed, or imposing additional cost sharing for covering a drug as prescribed, if specified criteria apply. The bill would provide that a reduction or termination of an ongoing and approved course of treatment before the end of the treatment or the end or amendment of the policy is an adverse benefit determination, and would require a health care service plan or disability insurer to notify an enrollee or insured, or their representative, and the enrollee’s or insured’s provider in writing of the adverse benefit determination no fewer than 7 calendar days before the effective date. The bill would require a plan or insurer that has approved an ongoing course of treatment to provide continuing coverage pending appeal or review. 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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 1367.21 of the Health and Safety Code is amended to read:

1367.21.
 (a) A health care service plan contract that covers prescription drug benefits shall not be issued, amended, delivered, or renewed in this state if the plan limits or excludes coverage for a drug or dose drug, dose, or dosage form of a drug on the basis that the drug or dose drug, dose, or dosage form of the drug is prescribed for a use or dose use, dose, or dosage form that is different from the use or dose use, dose, or dosage form for which that drug has been approved for marketing by the federal Food and Drug Administration (FDA), provided that all of the following conditions have been met:
(1) The drug is approved by the FDA.
(2) One of the following is true:
(A) The drug is prescribed by a participating licensed health care professional for the treatment of a life-threatening condition.
(B) The drug is prescribed by a participating licensed health care professional for the treatment of a chronic and seriously debilitating condition, condition and the drug is medically necessary to treat that condition, and the drug is on the plan formulary. If the drug is not on the plan formulary, the participating subscriber’s request shall be considered pursuant to the process required by Section 1367.24. condition.
(3) The drug has been recognized for treatment of that condition by any of the following:
(A) The American Hospital Formulary Service’s Drug Information.
(B) One of the following compendia, if recognized by the federal Centers for Medicare and Medicaid Services as part of an anticancer chemotherapeutic regimen:
(i) The Elsevier Gold Standard’s Clinical Pharmacology.
(ii) The National Comprehensive Cancer Network Drug and Biologics Compendium.
(iii) The Thomson Micromedex DrugDex.
(C) Two articles from major peer reviewed medical journals that present data supporting the proposed off-label use or uses as generally safe and effective unless there is clear and convincing contradictory evidence presented in a major peer reviewed medical journal.
(b) It shall be the responsibility of the participating prescriber to submit to the plan documentation supporting compliance with the requirements of subdivision (a), if requested by the plan.
(c) Any coverage required by this section shall also include medically necessary services associated with the administration of a drug, subject to the conditions of the contract.
(d) For purposes of this section, “life-threatening” means either or both of the following:
(1) Diseases or conditions conditions, including mental health and substance use disorders as defined in Section 1374.72, where the likelihood of death is high unless the course of the disease is interrupted.
(2) Diseases or conditions conditions, including mental health and substance use disorders as defined in Section 1374.72, with potentially fatal outcomes, where the end point of clinical intervention is survival.
(e) For purposes of this section, “chronic and seriously debilitating” means diseases or conditions conditions, including mental health and substance use disorders as defined in Section 1374.72, that require ongoing treatment to maintain remission or prevent deterioration and cause significant long-term morbidity.
(f) The provision of drugs and services when required by this section shall not, in itself, give rise to liability on the part of the plan.

(g)This section does not prohibit the use of a formulary, copayment, technology assessment panel, or similar mechanism as a means for appropriately controlling the utilization of a drug that is prescribed for a use that is different from the use for which that drug has been approved for marketing by the FDA.

(h)

(g) If a plan denies coverage pursuant to this section on the basis that its use is experimental or investigational, that decision is subject to review under Section 1370.4.

(i)

(h) Health care service plan contracts for the delivery of Medi-Cal services under the Waxman-Duffy Prepaid Health Plan Act (Chapter 8 (commencing with Section 14200) of Part 3 of Division 9 of the Welfare and Institutions Code) are exempt from the requirements of this section.

SEC. 2.

 Section 1367.22 of the Health and Safety Code is amended to read:

1367.22.
 (a)  A health care service plan contract issued, amended, or renewed on or after July 1, 1999, that covers prescription drug benefits shall not limit or exclude coverage for a drug, dose of a drug, or dosage form 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, dose of the drug, or dosage form is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition. This section does not preclude the prescribing provider from prescribing another drug covered by the plan that is medically appropriate for the enrollee, and does not prohibit generic drug substitutions as authorized by Section 4073 of the Business and Professions Code. For purposes of this section, a prescribing provider shall include a provider authorized to write a prescription, pursuant to subdivision (a) of Section 4059 of the Business and Professions Code, to treat a medical condition of an enrollee.
(b)  This section does not apply to coverage for any drug that is prescribed for a use that is different from the use for which that drug has been approved for marketing by the federal Food and Drug Administration. Coverage for different-use drugs is subject to Section 1367.21.
(c) This section does not apply to coverage for any drug that was denied in a final utilization review pursuant to Section 1367.28.
(d) This section shall not be construed to restrict or impair the application of any other provision of this chapter, including, but not limited to, Section 1367, which includes among its requirements that plans furnish services in a manner providing continuity of care and demonstrate that medical decisions are rendered by qualified medical providers unhindered by fiscal and administrative management.
(e) This section does not prohibit a health care service plan from charging a subscriber or enrollee a copayment or a deductible for prescription drug benefits or from setting forth, by contract, limitations on maximum coverage of prescription drug benefits, provided that the copayments, deductibles, or limitations are reported to, and held unobjectionable by, the director and set forth to the subscriber or enrollee pursuant to the disclosure provisions of Section 1363.

SEC. 3.Section 1367.28 is added to the Health and Safety Code, to read:
1367.28.

(a)A health care service plan contract issued, amended, or renewed on or after January 1, 2023, that covers prescription drug benefits shall provide coverage for a drug, dose of a drug, or dosage form during the entire duration of utilization review and any appeals of utilization review if that drug has been previously approved for coverage by a health care service plan for a medical condition of the enrollee and has been prescribed by a health care provider.

(b)A health care service plan shall not seek reimbursement, other than applicable cost sharing, if any, from an enrollee, health care provider, or other person for prescription drug coverage during utilization review if the final utilization review decision is to deny coverage for that prescription drug, dose, or dosage form.

(c)For purposes of this section, “utilization review” means prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, a request by a health care provider, enrollee, or authorized representative of a provider or enrollee for coverage of a prescription drug. The “final utilization review decision” includes independent medical review, pursuant to Section 1374.30.

SEC. 4.Section 10123.190 is added to the Insurance Code, to read:
10123.190.

(a)A health insurance policy issued, amended, or renewed on or after January 1, 2023, that covers prescription drug benefits shall provide coverage for a drug, dose of a drug, or dosage form during the entire duration of utilization review and any appeals of utilization review if that drug has been previously approved for coverage by a health insurer for a medical condition of the insured and has been prescribed by a health care provider.

(b)A health insurer shall not seek reimbursement, other than applicable cost sharing, if any, from an insured, health care provider, or other person for prescription drug coverage during utilization review if the final utilization review decision is to deny coverage for that prescription drug, dose, or dosage form.

(c)For purposes of this section, “utilization review” means prospectively, retrospectively, or concurrently reviewing and approving, modifying, delaying, or denying, based in whole or in part on medical necessity, a request by a health care provider, insured, or authorized representative of a provider or insured for coverage of a prescription drug. The “final utilization review decision” includes independent medical review, pursuant to Section 10169.

SEC. 3.

 Section 1367.26 is added to the Health and Safety Code, to read:

1367.26.
 (a) (1) A reduction or termination of an ongoing course of treatment approved by a health care service plan to be provided over a period of time or number of treatments, other than by lawful amendment or termination of a policy, before the end of the period of time or number of treatments shall constitute an adverse benefit determination.
(2) A health care service plan shall notify the enrollee or the enrollee’s authorized representative, and the enrollee’s provider, in writing of an adverse benefit determination under paragraph (1) on a date sufficiently in advance of, and no fewer than seven calendar days before, the effective date of the reduction or termination to allow the enrollee time to initiate an appeal of the adverse benefit determination.
(b) (1) A request by an enrollee, an enrollee’s authorized representative, or an enrollee’s provider to extend a course of treatment for urgent care beyond the period of time or number of treatments previously approved by a health care service plan shall be decided as soon as possible, taking into account the medical exigencies. The plan shall notify the enrollee or the enrollee’s authorized representative, and the enrollee’s provider, of the benefit determination, whether adverse or not, within 24 hours after the plan’s receipt of the request, if the request is made to the plan orally or in writing at least 24 hours before the expiration of the prescribed period of time or number of treatments.
(2) The information required by paragraph (1) may be provided to the enrollee or enrollee’s authorized representative, and the enrollee’s provider, orally within the 24-hour time limit, if a written notice of an adverse benefit determination is furnished to the enrollee or enrollee’s authorized representative, and the enrollee’s provider, within 24 hours of the oral notification.
(c) (1) A health care service plan that has approved an ongoing course of treatment to be provided over a period of time or number of treatments shall provide continuing coverage pending the outcome of an internal appeal under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any regulations issued thereunder, an independent medical review under Article 5.5 (commencing with Section 1374.30), or an external independent review under Section 1367.241. A plan shall provide coverage during the entire course of the internal and external appeals process, including during successive appeals.
(2) This subdivision does not prevent a health care service plan from continuing to apply generally applicable cost sharing under the terms of an enrollee’s policy during the appeals process.
(3) With respect to an ongoing course of treatment with a prescription drug to which Section 1367.28 does not apply, providing continuing coverage pending the outcome of the appeals process shall include covering any increase in prescribed dose of a disputed drug during the appeals process.
(d) A health care service plan shall include the content required under Section 1374.30 of this code and Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any regulations issued thereunder in an adverse benefit determination notice required under this section or Section 1367.01.
(e) For purposes of this section:
(1) “Adverse benefit determination” has the same meaning as in regulations issued pursuant to Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19).
(2) “Urgent care” has the same meaning as in Section 1367.03. A health care service plan shall defer to the determination of an enrollee’s provider on whether a request or claim for benefits involves urgent care.
(f) This section applies to a health care service plan and health care service plan contract that provides coverage for hospital, medical, surgical, or prescription drug benefits. This section does not apply to a specialized health care service plan contract that provides coverage only for dental or vision benefits, or a Medicare supplement policy.

SEC. 4.

 Section 1367.28 is added to the Health and Safety Code, to read:

1367.28.
 (a) (1) Notwithstanding any other law, a health care service plan that provides coverage for prescription drugs shall not limit or decline to cover a drug or dose of a drug as prescribed, or impose additional cost sharing for covering a drug as prescribed, if all the following apply:
(A) An enrollee is undergoing a current course of treatment with the prescription drug for a covered medical condition or is seeking an authorization for continued coverage within a month of the date of expiration of the last prescription or refill.
(B) The drug was previously covered by the plan or the enrollees’s prior private or public health care coverage for the enrollees’s medical condition.
(C) A prescribing provider prescribed the drug for the enrollee’s medical condition, and the drug is appropriately prescribed and considered safe and effective under generally accepted standards of medical care for treating the enrollee’s medical condition.
(2) A health care service plan that verifies that a condition in paragraph (1) is satisfied shall not delay or deny coverage during the verification process, except if a drug is unsafe as prescribed. If a drug is unsafe as prescribed, a plan shall notify the provider of its coverage determination, as provided by Section 1367.241. If a plan determines that another condition in paragraph (1) is unsatisfied, it shall comply with Section 1367.26.
(3) This subdivision does not do any of the following:
(A) Preclude a provider from prescribing another drug that is clinically appropriate for an enrollee.
(B) Prohibit generic drug substitutions under Section 4073 of the Business and Professions Code.
(b) This section applies to a prescription drug that is prescribed off-label in accordance with Section 1367.21.
(c) This section applies to a health care service plan and health care service plan contract that provides coverage for hospital, medical, surgical, or prescription drug benefits. This section does not apply to a specialized health care service plan contract that provides coverage only for dental or vision benefits, or a Medicare supplement policy.

SEC. 5.

 Section 10123.134 is added to the Insurance Code, to read:

10123.134.
 (a) (1) A reduction or termination of an ongoing course of treatment approved by a disability insurer to be provided over a period of time or number of treatments, other than by lawful amendment or termination of a policy, before the end of the period of time or number of treatments shall constitute an adverse benefit determination.
(2) An insurer shall notify the insured or the insured’s authorized representative, and the insured’s provider, in writing of an adverse benefit determination under paragraph (1) on a date sufficiently in advance of, and no fewer than seven calendar days before, the effective date of the reduction or termination to allow the insured time to initiate an appeal of the adverse benefit determination.
(b) (1) A request by an insured, an insured’s authorized representative, or an insured’s provider to extend a course of treatment for urgent care beyond the period of time or number of treatments previously approved by a disability insurer shall be decided as soon as possible, taking into account the medical exigencies. The insurer shall notify the insured or the insured’s authorized representative, and the insured’s provider, of the benefit determination, whether adverse or not, within 24 hours after the insurer’s receipt of the request, provided that the request is made to the insurer orally or in writing at least 24 hours before the expiration of the prescribed period of time or number of treatments.
(2) The information required by paragraph (1) may be provided to the insured or insured’s authorized representative, and the insured’s provider, orally within the 24-hour time limit, if a written notice of an adverse benefit determination is furnished to the insured or insured’s authorized representative, and the insured’s provider, within 24 hours of the oral notification.
(c) (1) A disability insurer that has approved an ongoing course of treatment to be provided over a period of time or number of treatments shall provide continuing coverage pending the outcome of an internal appeal under Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any regulations issued thereunder, an independent medical review under Article 3.5 (commencing with Section 10169), or an external independent review under Section 10123.191. An insurer shall provide coverage during the entire course of the internal and external appeals process, including during successive appeals.
(2) This subdivision does not prevent an insurer from continuing to apply generally applicable cost sharing under the terms of an insured’s policy during the appeals process.
(3) With respect to an ongoing course of treatment with a prescription drug to which Section 10123.190 does not apply, providing continuing coverage pending the outcome of the appeals process shall include covering any increase in prescribed dose of a disputed drug during the appeals process.
(d) A disability insurer shall include the content required under Section 10169 of this code and Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19) and any regulations issued thereunder in an adverse benefit determination notice required under this section or Section 10123.135.
(e) For purposes of this section:
(1) “Adverse benefit determination” has the same meaning as in regulations issued pursuant to Section 2719 of the federal Public Health Service Act (42 U.S.C. Sec. 300gg-19).
(2) “Urgent care” has the same meaning as in Section 10133.54. A disability insurer shall defer to the determination of an insured’s provider on whether a request or claim for benefits involves urgent care.
(f) This section applies to a disability insurer and disability insurance policy that provides coverage for hospital, medical, surgical, or prescription drug benefits. This section does not apply to the insurance listed in paragraphs (1) through (8) of subdivision (b) of Section 106, a specialized health insurance policy that provides coverage only for dental or vision benefits, or a Medicare supplement policy.

SEC. 6.

 Section 10123.190 is added to the Insurance Code, to read:

10123.190.
 (a) (1) Notwithstanding Sections 10123.134, 10123.191, 10123.201, or another section of this code to the contrary, a disability insurer that provides coverage for prescription drugs shall not limit or decline to cover a drug or dose of a drug as prescribed, or impose additional cost sharing for covering a drug as prescribed, if all the following apply:
(A) An insured is undergoing a current course of treatment with the prescription drug for a covered medical condition or is seeking an authorization for continued coverage within a month of the date of expiration of the last prescription or refill.
(B) The drug was previously covered by the insurer or the insured’s prior private or public health care coverage for the insured’s medical condition.
(C) A prescribing provider prescribed the drug for the insured’s medical condition, and the drug is appropriately prescribed and considered safe and effective under generally accepted standards of medical care for treating the insured’s medical condition.
(2) An insurer that verifies that a condition in paragraph (1) is satisfied shall not delay or deny coverage during the verification process, except if a drug is unsafe as prescribed. If a drug is unsafe as prescribed, an insurer shall notify the provider of its coverage determination, as provided by Section 10123.191. If an insurer determines that another condition in paragraph (1) is unsatisfied, it shall comply with Section 10123.134.
(3) This subdivision does not do any of the following:
(A) Preclude a provider from prescribing another drug that is clinically appropriate for an insured.
(B) Prohibit generic drug substitutions under Section 4073 of the Business and Professions Code.
(b) This section applies to a prescription drug that is prescribed off-label in accordance with Section 10123.195.
(c) This section applies to a disability insurer and disability insurance policy that provides coverage for hospital, medical, surgical, or prescription drug benefits. This section does not apply to the insurance listed in paragraphs (1) through (8) of subdivision (b) of Section 106, a specialized health insurance policy that provides coverage only for dental or vision benefits, or a Medicare supplement policy.

SEC. 5.SEC. 7.

 Section 10123.195 of the Insurance Code is amended to read:

10123.195.
 (a) A group group, blanket, or individual disability insurance policy issued, delivered, or renewed in this state or certificate of group or blanket disability insurance issued, delivered, or renewed in this state pursuant to a master group policy issued, delivered, or renewed in another state that, as a provision of hospital, medical, or surgical services, directly or indirectly covers prescription drugs shall not limit or exclude coverage for a drug or dose drug, dose, or dosage form of a drug on the basis that the drug or dose drug, dose, or dosage form of the drug is prescribed for a use or dose use, dose, or dosage form that is different from the use or dose use, dose, or dosage form for which that drug has been approved for marketing by the federal Food and Drug Administration (FDA), provided that all of the following conditions have been met:
(1) The drug is approved by the FDA.
(2) One of the following is true:
(A) The drug is prescribed by a contracting licensed health care professional for the treatment of a life-threatening condition.
(B) The drug is prescribed by a contracting licensed health care professional for the treatment of a chronic and seriously debilitating condition, and the drug is medically necessary to treat that condition, and the drug is on the insurer’s formulary, if any. condition.
(3) The drug has been recognized for treatment of that condition by any of the following:
(A) The American Hospital Formulary Service’s Drug Information.
(B) One of the following compendia, if recognized by the federal Centers for Medicare and Medicaid Services as part of an anticancer chemotherapeutic regimen:
(i) The Elsevier Gold Standard’s Clinical Pharmacology.
(ii) The National Comprehensive Cancer Network Drug and Biologics Compendium.
(iii) The Thomson Micromedex DrugDex.
(C) Two articles from major peer reviewed medical journals that present data supporting the proposed off-label use or uses as generally safe and effective unless there is clear and convincing contradictory evidence presented in a major peer reviewed medical journal.
(b) It shall be the responsibility of the contracting prescriber to submit to the insurer documentation supporting compliance with the requirements of subdivision (a), if requested by the insurer.
(c) Any coverage required by this section shall also include medically necessary services associated with the administration of a drug subject to the conditions of the contract.
(d) For purposes of this section, “life-threatening” means either or both of the following:
(1) Diseases or conditions conditions, including mental health and substance use disorders as defined in Section 10144.5, where the likelihood of death is high unless the course of the disease is interrupted.
(2) Diseases or conditions conditions, including mental health and substance use disorders as defined in Section 10144.5, with potentially fatal outcomes, where the end point of clinical intervention is survival.
(e) For purposes of this section, “chronic and seriously debilitating” means diseases or conditions conditions, including mental health and substance use disorders as defined in Section 10144.5, that require ongoing treatment to maintain remission or prevent deterioration and cause significant long-term morbidity.
(f) The provision of drugs and services when required by this section shall not, in itself, give rise to liability on the part of the insurer.
(g) This section shall not apply to a policy of disability insurance that covers hospital, medical, or surgical expenses which is issued outside of California to an employer whose principal place of business is located outside of California.

(h)This section does not prohibit the use of a formulary, copayment, technology assessment panel, or similar mechanism as a means for appropriately controlling the utilization of a drug that is prescribed for a use that is different from the use for which that drug has been approved for marketing by the FDA.

(i)

(h) If an insurer denies coverage pursuant to this section on the basis that its use is experimental or investigational, that decision is subject to review under the Independent Medical Review System of Article 3.5 (commencing with Section 10169).

(j)

(i) This section is not applicable to vision-only, dental-only, Medicare or Champus supplement, disability income, long-term care, accident-only, specified disease or hospital confinement indemnity insurance.

SEC. 6.SEC. 8.

 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.