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SB-524 Health care coverage: patient steering.(2021-2022)

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Date Published: 05/03/2021 10:00 AM
SB524:v95#DOCUMENT

Amended  IN  Senate  May 03, 2021
Amended  IN  Senate  April 19, 2021
Amended  IN  Senate  April 13, 2021
Amended  IN  Senate  March 11, 2021

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill
No. 524


Introduced by Senator Skinner

February 17, 2021


An act to add Chapter 9.6 (commencing with Section 4450) to Division 2 of the Business and Professions Code, to add Section 1367.44 to the Health and Safety Code, and to add Section 10123.66 to the Insurance Code, relating to health care coverage.


LEGISLATIVE COUNSEL'S DIGEST


SB 524, as amended, Skinner. Health care coverage: patient steering.
Existing law provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan, a health insurer, and a self-insured employer plan, or the agent thereof from engaging in patient steering, as specified. The bill would define “patient steering” to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, self-insured employer plan, or agent thereof. The bill would provide that these provisions do not apply to an entity that is part of a “fully integrated delivery system,” and as specified. The bill would also make related findings and declarations.
Because a willful violation of these provisions by a health care service plan is 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.

 The Legislature finds and declares all of the following:
(a) When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patient’s health at risk.
(b) Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c) Therefore, it is necessary to limit the practice of “patient steering,” used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.

SEC. 2.

 Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:
CHAPTER  9.6. Patient Steering

4450.
 (a) A self-insured employer plan or the agent of a self-insured employer plan shall not engage in patient steering.
(b) “Patient steering” means either of the following:
(1) Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2) Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees’ or insureds’ access to only those pharmacy providers that are owned or operated by the self-insured employer plan or self-insured employer plan’s agent, or owned or operated by a corporate affiliate of the self-insured employer plan or self-insured employer plan’s agent.
(c) “Patient steering” does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the self-insured employer plan or self-insured employer plan’s agent.
(d) Nothing in this chapter shall prevent a self-insured employer plan or the agent of a self-insured employer plan from offering enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.

(e)This chapter does not apply to a self-insured employer plan or its health insurer affiliate that is part of a fully integrated delivery system where enrollees or insureds primarily use pharmacies that are entirely owned and operated by the self-insured employer plan, and the self-insured employer plan’s enrollees or insureds may use any pharmacy in the self-insured employer plan’s network that has the ability to dispense the medication or provide the services.

(e) This chapter does not apply to a self-insured employer plan administered by a health care service plan or its health insurer affiliate that is part of a fully integrated delivery system in which enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, primarily use pharmacies that are entirely owned and operated by the health care service plan and the enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, may use any pharmacy in the self-insured employer plan’s network that has the ability to dispense the medication or provide the services.

SEC. 3.

 Section 1367.44 is added to the Health and Safety Code, to read:

1367.44.
 (a) A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b) “Patient steering” means either of the following:
(1) Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2) Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees’ access to only those pharmacy providers that are owned or operated by the health care service plan or plan’s agent, or are owned or operated by a corporate affiliate of the health care service plan or plan’s agent.
(c) “Patient steering” does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plan’s agent.
(d) Nothing in this section shall prevent a health care service plan or the agent of a health care service plan from offering enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(e) This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plan’s enrollees may use any pharmacy in the health care service plan’s network that has the ability to dispense the medication or provide the services.

SEC. 4.

 Section 10123.66 is added to the Insurance Code, to read:

10123.66.
 (a) A health insurer or the agent of a health insurer shall not engage in patient steering.
(b) “Patient steering” means either of the following:
(1) Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2) Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit insureds’ access to only those pharmacy providers that are owned or operated by the health insurer or insurer’s agent, or owned or operated by a corporate affiliate of the health insurer or insurer’s agent.
(c) “Patient steering” does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurer’s agent.
(d) Nothing in this section shall prevent a health insurer or the agent of a health insurer from offering insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
(e) This section does not apply to a health insurer that uses as its provider network the network of its affiliated health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plan’s enrollees may use any pharmacy in the health care service plan’s network that has the ability to dispense the medication or provide the services.

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.