Bill Text: CA AB2180 | 2023-2024 | Regular Session | Amended
Bill Title: Health care coverage: cost sharing.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-05-16 - In committee: Held under submission. [AB2180 Detail]
Download: California-2023-AB2180-Amended.html
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Amended
IN
Assembly
April 30, 2024 |
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Amended
IN
Assembly
April 10, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 2180
| Introduced by Assembly Member Weber |
February 07, 2024 |
An act to amend, repeal, and add Section 1367.243 of, and to add and repeal Section 1367.0062 to of, the Health and Safety Code, and to amend, repeal, and add Section 10123.205 of, and to add and repeal Section 10192.292 to
of, the Insurance Code, relating to health care coverage.
LEGISLATIVE COUNSEL'S DIGEST
AB 2180, as amended, Weber.
Health care coverage: cost sharing.
Existing law generally prohibits a person who manufactures a prescription drug from offering in California any discount, repayment, product voucher, or other reduction in an individual’s out-of-pocket expenses associated with the individual’s health insurance, health care service plan, or other health coverage, including, but not limited to, a copayment, coinsurance, or deductible, for any prescription drug if a lower cost generic drug is covered under the individual’s health insurance, health care service plan, or other health coverage on a lower cost-sharing tier that is designated as therapeutically equivalent to the prescription drug manufactured by that person or if the active ingredients of the drug are contained in products regulated by the federal Food and Drug Administration, are available without prescription at a lower cost, and are not otherwise contraindicated for the
condition for which the prescription drug is approved.
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 by the Department of Insurance.
This bill would require a health care service plan, health insurance policy, or pharmacy benefit manager that administers pharmacy benefits for a health care service plan or health insurer to apply any amounts paid by the enrollee, insured, or a third-party patient assistance program, as defined,
program for prescription drugs toward the enrollee’s or insured’s cost-sharing requirement, and would only apply those requirements with respect to enrollees or insureds who have a chronic disease or terminal illness. The bill would limit the application of the section to health care service plans and health insurance policies issued, amended, delivered, or renewed on or after January 1, 2025. Because a willful violation of these requirements by a health care service plan would be a crime, this bill would impose a state-mandated local program. The bill would repeal those provisions on January 1, 2035. The bill would require the Department of Managed Health Care and the Department of Insurance, by March 31, 2034, to provide a report to the appropriate policy committees of the Legislature on the impact of the
provisions on drug prices and health care premium rates, including a recommendation whether the repeal date should be deleted.
Existing law requires a health care service plan or health insurer that files certain rate information to report to the appropriate department specified cost information regarding covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs, dispensed as provided.
This bill, until January 1, 2035, additionally would require health care service plans and health insurers to report the 25 most frequently prescribed drugs with a patient assistance program, as described in the bill, and the 25 most costly drugs, by total annual plan spending, with a prescription assistance program, as described in the bill. The bill also would require the health care service plan or
health insurer to report the aggregate dollar amount of all patient assistance programs that the health care service plan, health insurer, or their designee collected from all third-party entities in connection with the bill’s cost-sharing requirements that are attributable to drug utilization by enrollees or insureds during that calendar year.
Because a willful violation of the bill’s requirements by a health care service plan would be 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.
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 1367.0062 is added to the Health and Safety Code, to read:1367.0062.
(a) (1) To the extent permitted by federal law, and consistent with Sections 132000 and 132002, a health care service plan or a pharmacy benefit manager that administers pharmacy benefits for a health care service plan shall apply any amounts paid by either the enrollee or third-party patient assistance program for prescription drugs to the enrollee’s cost-sharing requirement. This requirement shall be limited to only those enrollees who have a chronic disease or terminal illness.(2) When calculating an enrollee’s overall contribution to the annual
limitation on cost sharing set forth in Sections 18022(c) and 300gg-6(b) of Title 42 of the United States Code, a health care service plan shall include expenditures for any item or service covered by the health care service plan, and include within a category of essential health benefits, as described in Section 18022(b)(1) of Title 42 of the United States Code, which expenditures shall be considered expenditures for essential health coverage benefits covered under the health care service plan contract.
(3) This section shall only apply with respect to health care service plan contracts issued, amended, delivered, or renewed on or after January 1, 2025.
(b) If under federal law, application of subdivision (a) would result in health savings account ineligibility under Section 223 of the
Internal Revenue Code, this requirement shall apply for health savings account-qualified high deductible health plans with respect to the deductible of a policy after the enrollee has satisfied the minimum deductible under Section 223 of the Internal Revenue Code, except with respect to items or services that are preventive care pursuant to Section 223(c)(2)(C) of the Internal Revenue Code, in which case the requirements of this subdivision shall apply regardless of whether the minimum deductible under Section 223 of the Internal Revenue Code has been satisfied.
(c) This section does not apply with respect to self-insured employer plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) (Public Law 83-406).
(d) For purposes of this section, the following definitions
apply:
(1) “Cost-sharing requirement” means any copayment, coinsurance, deductible, or annual limitation on cost-sharing, including a limitation subject to Sections 18022(c) and 300gg-6(b) of Title 42 of the United States Code, required by, or on behalf of, an enrollee in order to receive a specific health care service, including a prescription drug, covered by a health care service plan contract.
(2) “Pharmacy benefit manager” means a person or business that administers the prescription drug or device program of one or more health care service plans on behalf of a third party in accordance with a pharmacy benefit program. This term includes any agent or representative of a pharmacy benefit manager hired or contracted by the pharmacy benefit manager to assist in the
administering of the drug program and any wholly or partially owned or controlled subsidiary of a pharmacy benefit manager.
(3) “Third-party patient assistance program” shall include, but is not limited to, manufacturer or charitable cost-sharing or copay assistance programs that provide financial assistance intended to assist patients in paying their out-of-pocket cost-sharing obligations for prescription drugs. “Third-party patient assistance program” does not include discounts, product vouchers, or coupons that provide a percentage-based discount off the list price of a prescription drug.
(4) “Chronic disease” is defined as conditions that have a tendency to last one year or more and require ongoing medical attention or limit activities of daily living or
both.
(5) “Terminal illness” is defined as a medical condition that is life-limiting life limiting and expected to result in death.
(e) (1) On or before March 31, 2034, the department shall provide a report to the appropriate policy committees of the Legislature on the impact of this section on drug prices and health care premium rates, and to include the department’s recommendation whether the repeal date in subdivision (f) should be deleted.
(2) A report provided pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
(f) This section shall remain in effect only until January 1, 2035, and as of that date is repealed.
SEC. 2.
Section 1367.243 of the Health and Safety Code is amended to read:1367.243.
(a) (1) A health care service plan that reports rate information pursuant to Section 1385.03 or 1385.045 shall report the information described in paragraph (2) to the department no later than October 1 of each year, beginning October 1, 2018.(2) (A) For all covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs dispensed at a plan pharmacy, network pharmacy, or mail order pharmacy for outpatient use, all of the following shall be reported:
(A)
(i) The 25 most frequently prescribed drugs.
(B)
(ii) The 25 most costly drugs by total annual plan spending.
(C)
(iii) The 25 drugs with the highest year-over-year increase
in total annual plan spending.
(iv) The 25 most frequently prescribed drugs with a patient assistance program pursuant to Section 1367.0062.
(v) The 25 most costly drugs by total annual plan spending with a prescription assistance program pursuant to Section 1367.0062.
(B) For each plan with a prescription drug benefit that the health care service plan issued for delivery, renewed, amended, or continued during the immediately preceding calendar year, the aggregate dollar amount of all patient assistance programs that the health care service plan or a designee of the health care service plan collected, directly or indirectly, from all third-party entities in connection with Section 1367.002 that are attributable to enrollee drug
utilization during that calendar year shall be reported.
(b) The department shall compile the information reported pursuant to subdivision (a) into a report for the public and legislators that demonstrates the overall impact of drug costs on health care premiums. and third-party patient assistance programs on health care premiums, cost sharing, and payments to pharmacy benefit managers. The data in the report shall be aggregated and shall not reveal information specific to individual health care service plans.
(c) For the purposes of this section, a “specialty drug” is one that exceeds the threshold for a specialty drug under the Medicare Part D program (Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173)).
(d) By January 1 of each year, beginning January 1, 2019, the department shall publish on its Internet Web site internet website the report required pursuant to subdivision (b).
(e) After the report required in subdivision (b) is released, the department shall include the report as part of the public meeting required pursuant to subdivision (b) of Section 1385.045.
(f) Except for the report required pursuant to subdivision (b), the department shall keep
confidential all of the information provided to the department pursuant to this section, and the information shall be protected from public disclosure.
(g) This section shall remain in effect only until January 1, 2035, and as of that date is repealed.
SEC. 3.
Section 1367.243 is added to the Health and Safety Code, to read:1367.243.
(a) (1) A health care service plan that reports rate information pursuant to Section 1385.03 or 1385.045 shall report the information described in paragraph (2) to the department no later than October 1 of each year.(2) For all covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs dispensed at a plan pharmacy, network pharmacy, or mail order pharmacy for outpatient use, all of the following shall be reported:
(A) The 25 most frequently prescribed drugs.
(B) The 25 most costly drugs by total annual plan spending.
(C) The 25 drugs with the highest year-over-year increase in total annual plan spending.
(b) The department shall compile the information reported pursuant to subdivision (a) into a report for the public and legislators that demonstrates the overall impact of drug costs on health care premiums. The data in the report shall be aggregated and shall not reveal information specific to individual health care service plans.
(c) For the purposes of this section, a “specialty drug” is one that exceeds the threshold for a specialty drug under the Medicare Part D program (Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173)).
(d) By January 1 of each year, the department shall publish on its internet website the report required pursuant to subdivision (b).
(e) After the report required in subdivision (b) is released, the department shall include the report as part of the public meeting required pursuant to subdivision (b) of Section 1385.045.
(f) Except for the report required pursuant to subdivision (b), the department shall keep confidential all of the information provided to the department pursuant to this section, and the information shall be protected from public disclosure.
(g) This section shall become operative on January 1, 2035.
SEC. 4.
Section 10123.205 of the Insurance Code is amended to read:10123.205.
(a) (1) A health insurer that reports rate information pursuant to Section 10181.3 or 10181.45 shall report the information described in paragraph (2) to the department no later than October 1 of each year, beginning October 1, 2018.(2) (A) For all covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs dispensed at a plan pharmacy, network pharmacy, or mail order pharmacy for outpatient use, all of the following shall be reported:
(A)
(i) The 25 most frequently prescribed drugs.
(B)
(ii) The 25 most costly drugs by total annual plan spending.
(C)
(iii) The 25 drugs with the highest year-over-year increase
in total annual plan spending.
(iv) The 25 most frequently prescribed drugs with a patient assistance program pursuant to Section 10192.292.
(v) The 25 most costly drugs by total annual plan spending with a prescription assistance program pursuant to Section 10192.292.
(B) For each plan with a prescription drug benefit that the health insurer issued for delivery, renewed, amended, or continued during the immediately preceding calendar year, the aggregate dollar amount of all patient assistance programs that the health insurer or a designee of the health insurer collected, directly or indirectly, from all third-party entities in connection with Section 10192.292 that are attributable to drug utilization by insureds during that calendar
year shall be reported.
(b) The department shall compile the information reported pursuant to subdivision (a) into a report for the public and legislators that demonstrates the overall impact of drug costs on health care premiums. and third-party patient assistance programs on health care premiums, cost sharing, and payments to pharmacy benefit managers. The data in the report shall be aggregated and shall not reveal information specific to individual health insurers.
(c) For the purposes of this section, a “specialty drug” is one that exceeds the threshold for a specialty drug under the Medicare Part D program (Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (Public Law 108-173)).
(d) By January 1 of each year, beginning January 1, 2018, the department shall publish on its Internet Web site internet website
the report required pursuant to subdivision (b).
(e) After the report required in subdivision (b) is released, the department shall include the report as part of the public meeting required pursuant to subdivision (b) of Section 10181.45.
(f) Except for the report required pursuant to subdivision (b), the department shall keep confidential all of the information provided to the department pursuant to this section, and the information shall be protected from public disclosure.
(g) This section shall remain in effect only until January 1, 2035, and as of that date is repealed.
SEC. 5.
Section 10123.205 is added to the Insurance Code, to read:10123.205.
(a) (1) A health insurer that reports rate information pursuant to Section 10181.3 or 10181.45 shall report the information described in paragraph (2) to the department no later than October 1 of each year.(2) For all covered prescription drugs, including generic drugs, brand name drugs, and specialty drugs dispensed at a plan pharmacy, network pharmacy, or mail order pharmacy for outpatient use, all of the following shall be reported:
(A) The 25 most frequently prescribed drugs.
(B) The 25 most costly drugs by total annual plan spending.
(C) The 25 drugs with the highest year-over-year increase in total annual plan spending.
(b) The department shall compile the information reported pursuant to subdivision (a) into a report for the public and legislators that demonstrates the overall impact of drug costs on health care premiums. The data in the report shall be aggregated and shall not reveal information specific to individual health insurers.
(c) For the purposes of this section, a “specialty drug” is one that exceeds the threshold for a specialty drug under the Medicare Part D program (Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173)).
(d) By January 1 of each year, the department shall publish on its internet website the report required pursuant to subdivision (b).
(e) After the report required in subdivision (b) is released, the department shall include the report as part of the public meeting required pursuant to subdivision (b) of Section 10181.45.
(f) Except for the report required pursuant to subdivision (b), the department shall keep confidential all of the information provided to the department pursuant to this section, and the information shall be protected from public disclosure.
(g) This section shall become operative on January 1, 2035.
SEC. 2.SEC. 6.
Section 10192.292 is added to the Insurance Code, to read:10192.292.
(a) (1) To the extent permitted by federal law, and consistent with Sections 132000 and 132002 of the Health and Safety Code, a health insurer or a pharmacy benefit manager that administers pharmacy benefits for a health insurer shall apply any amounts paid by either the insured, or third-party patient assistance program for prescription drugs to the insured’s cost-sharing requirement. This requirement shall be limited to only those insureds who have a chronic disease or terminal illness.(2) When calculating an insured’s overall contribution to
the annual limitation on cost sharing set forth in Sections 18022(c) and 300gg-6(b) of Title 42 of the United States Code, a health insurer shall include expenditures for any item or service covered by the health insurer, and include within a category of essential health benefits, as described in Section 18022(b)(1) of Title 42 of the United States Code, which expenditures shall be considered expenditures for essential health coverage benefits covered under the health insurance policy.
(3) This section shall only apply with respect to health insurance policies issued, amended, delivered, or renewed on or after January 1, 2025.
(b) If under federal law, application of subdivision (a) would result in health savings account ineligibility under Section 223 of the Internal Revenue
Code, this requirement shall apply for Health Savings Account-qualified High Deductible Health Plans with respect to the deductible of a policy after the insured has satisfied the minimum deductible under Section 223 of the Internal Revenue Code, except with respect to items or services that are preventive care pursuant to Section 223(c)(2)(C) of the Internal Revenue Code, in which case the requirements of this subdivision shall apply regardless of whether the minimum deductible under Section 223 of the Internal Revenue Code has been satisfied.
(c) This section does not apply with respect to self-insured employer plans governed by the Employee Retirement Income Security Act of 1974 (ERISA) (Public Law 83-406).
(d) For purposes of this section, the following definitions apply:
(1) “Cost-sharing requirement” means any copayment, coinsurance, deductible, or annual limitation on cost-sharing, including a limitation subject to Sections 18022(c) and 300gg-6(b) of Title 42 of the United States Code, required by, or on behalf of, an enrollee in order to receive a specific health care service, including a prescription drug, covered by a health insurance policy.
(2) “Pharmacy benefit manager” means a person or business that administers the prescription drug or device program of one or more health insurance policies on behalf of a third party in accordance with a pharmacy benefit program. This term includes any agent or representative of a pharmacy benefit manager hired or contracted by the pharmacy benefit manager to assist in the administering of the drug
program and any wholly or partially owned or controlled subsidiary of a pharmacy benefit manager.
(3) “Third-party patient assistance program” shall include, but is not limited to, manufacturer or charitable cost-sharing or copay assistance programs that provide financial assistance intended to assist patients in paying their out-of-pocket cost-sharing obligations for prescription drugs. “Third-party patient assistant program” does not include discounts, product vouchers, or coupons that provide a percentage-based discount off the list price of a prescription drug.
(4) “Chronic disease” is defined as conditions that have a tendency to last one year or more and require ongoing medical attention or limit activities of daily living or both.
(5) “Terminal illness” is defined as a medical condition that is life-limiting life limiting and expected to result in death.
(e) (1) On or before March 31, 2034, the department shall provide a report to the appropriate policy committees of the Legislature on the impact of this section on drug prices and health care premium rates, and to include the department’s recommendation whether the repeal date in subdivision (f) should be deleted.
(2) A report provided pursuant to paragraph (1) shall be submitted in
compliance with Section 9795 of the Government Code.
(f) This section shall remain in effect only until January 1, 2035, and as of that date is repealed.
