Bill Text: AZ SB1361 | 2014 | Fifty-first Legislature 2nd Regular | Introduced
Bill Title: Health insurance; prescriptions; prior authorization
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2014-02-12 - Referred to Senate RULES Committee [SB1361 Detail]
Download: Arizona-2014-SB1361-Introduced.html
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REFERENCE TITLE: health insurance; prescriptions; prior authorization |
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State of Arizona Senate Fifty-first Legislature Second Regular Session 2014
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SB 1361 |
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Introduced by Senators Ward, Bradley, Hobbs; Representatives Larkin, Steele: Senators Farley, McComish, Tovar; Representatives Boyer, Cardenas, Carter, Livingston
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AN ACT
Amending title 20, chapter 1, Arizona Revised Statutes, by adding article 5; Amending section 36-2906, arizona revised statutes; relating to prior authorization for prescription drug benefits.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Title 20, chapter 1, Arizona Revised Statutes, is amended by adding article 5, to read:
ARTICLE 5. PRIOR AUTHORIZATION for prescription drug benefits
20-195. Electronic prior authorization; prescription drugs; health care insurers; rules; definitions
A. Beginning January 1, 2016, a health care insurer that provides prescription drug benefits shall use the prior authorization process established pursuant to subsection C of this section when requiring prior authorization for prescription drug benefits.
B. A health care professional may initiate the prior authorization request with a health care insurer and the health care professional or the authorized agent of the health care professional may confer and consult with a health care insurer regarding a prior authorization request.
C. On or before July 1, 2015, the director, by rule, shall:
1. Prescribe a single, standard form for requesting prior authorization of prescription drug benefits.
2. Require a health care insurer or the agent of a health care insurer to use the form for any prior authorization of prescription drug benefits required by the health care insurer.
3. Require a health care insurer or the agent of a health care insurer to make available and accessible in a centralized location on its website its prior authorization requirements and restrictions, including a list of prescription drugs that require prior authorization.
4. Require that the health care insurer make the form available electronically and allow a completed form to be submitted electronically by the health care professional.
D. Beginning January 1, 2016, a prior authorization request is deemed granted if a health care insurer fails to:
1. Use the prior authorization process prescribed in rule by the director.
2. For prior authorization requests submitted electronically:
(a) Notify the health care professional within two business days after receipt of the request that the request is approved, denied or incomplete, and, if incomplete, indicate the specific additional information that is required to process the request.
(b) Notify the health care professional within two business days after receiving the additional information required by the health care insurer that the request is approved or denied.
3. For prior authorization requests submitted by fax or e‑mail:
(a) Notify the health care professional within three business days after receiving the request that the request is approved, denied or incomplete, and, if incomplete, indicate the specific additional information that is required to process the request.
(b) Notify the health care professional within three business days after receiving the additional information required by the health care insurer that the request is approved or denied.
4. For urgent prior authorization requests, notify the health care professional within one day after the receipt of the request that the request is approved or denied.
E. For the purposes of this section:
1. "Authorized agent of the health care professional" means:
(a) An employee of the health care professional.
(b) A contract employee of the health care professional.
2. "Electronically":
(a) Means the submission of a prior authorization request to a health care insurer through a secure, web‑based internet portal.
(b) Does not include the submission of A prior authorization request by e-mail.
3. "Health care insurer" means a disability insurer, group disability insurer, blanket disability insurer, health care services organization, hospital service corporation, medical service corporation or hospital and medical service corporation.
4. "Health care professional" means a health care professional who is licensed or certified under title 32 and who is authorized to prescribe prescription drugs.
5. "Urgent prior authorization request" means a prior authorization request of a drug benefit that, based on the reasonable opinion of the health care professional with knowledge of the covered person's medical condition, if determined in the time allowed for nonurgent prior authorization requests, could seriously jeopardize the life or health of the covered person or the ability of the covered person to regain maximum function or subject the covered person to severe pain that cannot be adequately managed without the drug benefit that is the subject of the prior authorization request.
Sec. 2. Section 36-2906, Arizona Revised Statutes, is amended to read:
36-2906. Qualified plan health services contracts; proposals; administration
A. The administration shall:
1. Supervise the administrator.
2. Review the proposals.
3. Award contracts.
B. The director shall prepare and issue a request for proposal, including a proposed contract format, in each of the counties of this state, at least once every five years, to qualified group disability insurers, hospital and medical service corporations, health care services organizations and any other qualified public or private persons, including county‑owned and operated health care facilities. The contracts shall specify the administrative requirements, the delivery of medically necessary services and the subcontracting requirements.
C. The director shall adopt rules regarding the request for proposal process that provide:
1. For definition of proposals in the following categories subject to the following conditions:
(a) Inpatient hospital services.
(b) Outpatient services, including emergency dental care, and early and periodic health screening and diagnostic services for children.
(c) Pharmacy services.
(d) Laboratory, x‑ray and related diagnostic medical services and appliances.
2. Allowance for the adjustment of such categories by expansion, deletion, segregation or combination in order to secure the most financially advantageous proposals for the system.
3. An allowance for limitations on the number of high risk persons that must be included in any proposal.
4. For analysis of the proposals for each geographic service area as defined by the director to ensure the provision of health and medical services that are required to be provided throughout the geographic service area pursuant to section 36‑2907.
5. For the submittal of proposals by a group disability insurer, a hospital and medical service corporation, a health care services organization or any other qualified public or private person intending to submit a proposal pursuant to this section. Each qualified proposal shall be entered with separate categories for the distinct groups of persons to be covered by the proposed contracts, as set forth in the request for proposal.
6. For the procurement of reinsurance for expenses incurred by any contractor or member or the system in providing services in excess of amounts specified by the director in any contract year. The director shall adopt rules to provide that the administrator may specify guidelines on a case by case basis for the types of care and services that may be provided to a person whose care is covered by reinsurance. The rules shall provide that if a contractor does not follow specified guidelines for care or services and if the care or services could be provided pursuant to the guidelines at a lower cost the contractor is entitled to reimbursement as if the care or services specified in the guidelines had been provided.
7. For the awarding of contracts to contractors with qualified proposals determined to be the most advantageous to the state for each of the counties in this state. A contract may be awarded that provides services only to persons defined as eligible pursuant to section 36‑2901, paragraph 6, subdivision (b), (c), (d) or (e). The director may provide by rule a second round competitive proposal procedure for the director to request voluntary price reduction of proposals from only those that have been tentatively selected for award, before the final award or rejection of proposals.
8. For the requirement that any proposal in a geographic service area provide for the full range of system covered services.
9. For the option of the administration to waive the requirement in any request for proposal or in any contract awarded pursuant to a request for proposal for a subcontract with a hospital for good cause in a county or area including but not limited to situations when such hospital is the only hospital in the health service area. In any situation where the subcontract requirement is waived, no hospital may refuse to treat members of the system admitted by primary care physicians or primary care practitioners with hospital privileges in that hospital. In the absence of a subcontract, the reimbursement level shall be at the levels specified in section 36‑2904, subsection H or I.
D. Reinsurance may be obtained against expenses in excess of a specified amount on behalf of any individual for system covered emergency or inpatient services either through the purchase of a reinsurance policy or through a system self‑insurance program as determined by the director. Reinsurance, subject to the approval of the director, may be obtained against expenses in excess of a specified amount on behalf of any individual for outpatient services either through the purchase of a reinsurance policy or through a system self‑insurance program as determined by the director.
E. Notwithstanding the other provisions of this section, the administration may procure, provide or coordinate system covered services by interagency agreement with authorized agencies of this state or with a federal agency for distinct groups of eligible persons, including persons eligible for children's rehabilitative services and persons eligible for comprehensive medical and dental program services through the department of economic security.
F. Contracts shall be awarded as otherwise provided by law, except that in no event may a contract be awarded to any respondent that will cause the system to lose any federal monies to which it is otherwise entitled.
G. After contracts are awarded pursuant to this section, the director may negotiate with any successful proposal respondent for the expansion or contraction of services or service areas if there are unnecessary gaps or duplications in services or service areas.
H. Beginning October 1, 2016, a contractor that provides prescription drug benefits shall develop and maintain a process when requiring prior authorization for prescription drug benefits that allows for the prior authorization request to be electronically submitted by a subcontractor who is licensed or certified under title 32 and who is authorized to prescribe prescription drugs and allows for the approval or denial of the prior authorization request to be electronically submitted by a contractor to the subcontractor who initiated the prior authorization request.
Sec. 3. Uniform prior authorization for prescription drugs committee; membership; duties; delayed repeal
A. The uniform prior authorization for prescription drugs committee is established in the department of insurance consisting of the following members:
1. The director of the department of insurance or the director's designee.
2. Three members who are representatives of different health care insurers as defined in section 20‑195, Arizona Revised Statutes, as added by this act, and who are appointed by the director of the department of insurance.
3. Three members who are representatives of different health care professionals licensed or certified under title 32, Arizona Revised Statutes, who are authorized to prescribe prescription drugs and who are appointed by the director of the department of insurance.
4. One member who is a pharmacist licensed under title 32, Arizona Revised Statutes, and who is appointed by the director of the department of insurance.
5. One member of the public who is appointed by the director of the department of insurance.
6. The director of the Arizona health care cost containment system or the director's designee.
7. One member of an organization that represents patients with chronic health conditions who is appointed by the director of the department of insurance.
B. Committee members shall serve at the pleasure of the director of the department of insurance and are not eligible to receive compensation or reimbursement for expenses.
C. On or before January 1, 2015, the committee shall advise the director of the department of insurance on the technical, operational and practical aspects of developing a standard authorization form for requesting prior authorization of prescription drug benefits by developing recommendations regarding a standard uniform prior authorization form and an electronic submission process for prescription drugs to simplify the prior authorization process. The director shall incorporate these recommendations in the rules adopted pursuant to section 20-195, Arizona Revised Statutes, as added by this act. The recommended prior authorization form must be designed to permit its use as a written document and to be electronically available and transmissible.
D. In developing the recommendations regarding a standard uniform prior authorization form the committee must consider:
1. Any form for requesting prior authorization widely used in this state.
2. Any form for requesting prior authorization developed by another state.
3. Forms for the prior authorization of benefits established by the federal centers for medicare and medicaid services.
4. National standards pertaining to the electronic prior authorization of benefits.
5. Public comment from interested parties pursuant to at least one public meeting conducted by the committee.
E. This section is repealed from and after June 30, 2015.
Sec. 4. Department of insurance; rulemaking exemption
For the purposes of implementing section 20‑195, Arizona Revised Statutes, as added by this act, the department of insurance is exempt from the rulemaking requirements of title 41, chapter 6, Arizona Revised Statutes, until July 1, 2015, except that the department shall provide public notice and an opportunity for public comment on proposed rules at least thirty days before a rule is adopted or amended.
