Bill Text: CA SB1052 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Health care coverage.

Spectrum: Bipartisan Bill

Status: (Passed) 2014-09-25 - Chaptered by Secretary of State. Chapter 575, Statutes of 2014. [SB1052 Detail]

Download: California-2013-SB1052-Amended.html

---

BILL NUMBER: SB 1052	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 30, 2014
	AMENDED IN SENATE  MAY 27, 2014
	AMENDED IN SENATE  APRIL 29, 2014
	AMENDED IN SENATE  MARCH 28, 2014

INTRODUCED BY   Senator Torres
    (   Coauthor:   Assembly Member  
Waldron   ) 

                        FEBRUARY 18, 2014

   An act to add Section 100503.1  tothe   to
the  Government Code, to amend Sections 1363.01 and 1368.016 of,
and to add Section 1367.205 to, the Health and Safety Code, and to
amend Section 10123.199 of, and to add Section 10123.192 to, the
Insurance Code, relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1052, as amended, Torres. Health care coverage.
   Existing law, the Knox-Keene Health Care Service Plan Act
(Knox-Keene 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 also
provides for the regulation of health insurers by the Department of
Insurance. The Knox-Keene Act requires a health care service plan
that provides prescription drug benefits and maintains one or more
drug formularies to provide to members of the public, upon request, a
copy of the most current list of prescription drugs on the
formulary, as specified.
   This bill would require a health care service plan or health
insurer that provides prescription drug benefits and maintains one or
more drug formularies to post those formularies on its Internet Web
 site,   site and  update that posting
within  24   72  hours after making any
formulary  changes, use a standard template to display
formularies, and include in any published formulary, among other
information, the prior authorization or step edit requirements for,
and the range of cost sharing for, each drug included on the
formulary. The bill would authorize the Department of Managed Health
Care and the Department of Insurance to develop a standard formulary
template and would require plans and insurers to use that template to
comply with specified provisions of the bill.  
changes. The bill would require the departments to jointly develop a
standard formulary template and would require plans and insurers to
use that template to display formularies, as specified.  The
bill would make other related conforming changes. Because a willful
violation of these requirements by a health care service plan would
be a crime, the bill would impose a state-mandated local program.
   Existing law establishes the California Health Benefit Exchange
within state government, specifies the powers and duties of the board
governing the Exchange, and requires the board to facilitate the
purchase of qualified health plans through the Exchange by qualified
individuals and small employers.
   Existing law requires the board to determine the minimum
requirements a health care service plan or health insurer must meet
to be considered for participation in the Exchange and the standards
and criteria for selecting qualified health plans to be offered
through the Exchange that are in the best interests of qualified
individuals and qualified small employers.
   This bill would require the board of the Exchange to ensure that
its Internet Web site provides a direct link to the formularies for
each qualified health plan offered through the Exchange that are
posted by plans and insurers pursuant to the bill's provisions. The
bill would also require the board, on or before  January 1,
2016,   the later of October 1, 2017, or 18 months after
the standard formulary template described above is developed,
to create a search tool on its Internet Web site that allows
potential enrollees to search for qualified health plans by a
particular drug  and by a particular therapeutic condition.
  and compare coverage and cost sharing for that drug.

   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.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 100503.1 is added to the Government Code, to
read:
   100503.1.  (a) The board shall ensure that the Internet Web site
maintained under subdivision (c) of Section 100502 provides a direct
link to the formulary, or formularies, for each qualified health plan
offered through the Exchange that is posted by the carrier pursuant
to Section 1367.205 of the Health and Safety Code or Section
10123.192 of the Insurance Code.
   (b) On or before  January 1, 2016,   the
later of October 1, 2017, or the date that is 18 months after the
date the standard formulary template is developed pursuant to
subdivision (b) of   Section 1367.205 of the Health and
Safety Code and subdivision (b) of Section 10123.192 of the Insurance
Code,  the board shall create a search tool on the Internet Web
site maintained under subdivision (c) of Section 100502 that allows
potential enrollees to search for qualified health plans by a
particular drug  and by a particular therapeutic condition.
  and compare coverage and cost sharing for that drug.

  SEC. 2.  Section 1363.01 of the Health and Safety Code is amended
to read:
   1363.01.  (a) Every plan that covers prescription drug benefits
shall provide notice in the evidence of coverage and disclosure form
to enrollees regarding whether the plan uses a formulary. The notice
shall be in language that is easily understood and in a format that
is easy to understand. The notice shall include an explanation of
what a formulary is, how the plan determines which prescription drugs
are included or excluded, and how often the plan reviews the
contents of the formulary.
   (b) Every plan that covers prescription drug benefits shall
provide to members of the public, upon request, information regarding
whether a specific drug or drugs are on the plan's formulary. Notice
of the opportunity to secure this information from the plan,
including the plan's telephone number for making a request of this
nature and the Internet Web site where the formulary is posted under
Section 1367.205, shall be included in the evidence of coverage and
disclosure form to enrollees.
   (c) Every plan shall notify enrollees, and members of the public
who request formulary information, that the presence of a drug on the
plan's formulary does not guarantee that an enrollee will be
prescribed that drug by his or her prescribing provider for a
particular medical condition.
  SEC. 3.  Section 1367.205 is added to the Health and Safety Code,
to read:
   1367.205.  (a) In addition to the list required to be provided
under Section 1367.20, a health care service plan that provides
prescription drug benefits and maintains one or more drug formularies
shall do all of the following:
   (1) Post the formulary or formularies for each product offered by
the plan on the plan's Internet Web site in a manner that is
accessible and searchable by potential enrollees, enrollees, and
providers.
   (2) Update the formularies posted pursuant to paragraph (1) with
any change to those formularies within  24   72
 hours after making the change.
   (3)  Use a standard   No later than six
months after the date that a standard formulary template is developed
under subdivision (b), use that  template to display the
formulary or formularies for each product offered by the plan.
 This template shall do both of the following: 

   (A) Use the United States Pharmacopeia classification system.
 
   (B) Organize drugs by therapeutic class, listing drugs
alphabetically.  
   (4) Include all of the following on any published formulary for
any product offered by the plan, including, but not limited to, the
formulary or formularies posted pursuant to paragraph (1) and the
list provided pursuant to Section 1367.20:  
   (A) Any prior authorization or step edit requirements for each
specific drug included on the formulary.  
   (B) The range of cost sharing for a potential enrollee of each
specific drug included on the formulary, as follows: 

   (i) Under $100 - $.  
   (ii) $100-$250 - $$.  
   (iii) $251-$500 - $$$.  
   (iv) Over $500 - $$$$.  
   (b) (1) By April 1, 2016, the department and the Department of
Insurance shall jointly, and with input from interested parties from
at least one public meeting, develop a standard formulary template
for purposes of paragraph (3) of subdivision (a). In developing the
template, the department and Department of Insurance shall take into
consideration existing requirements for reporting of formulary
information established by the federal Centers for Medicare and
Medicaid Services.  
   (2) The standard formulary template shall include the notification
described in subdivision (c) of Section 1363.01, and as applied to a
particular formulary for a product offered by a plan, shall do all
of the following:  
   (A) Include information on cost sharing and utilization controls,
including prior authorization or step therapy requirements, for each
drug covered by the product. To the extent feasible, the template
shall provide consumers with an estimate of their out-of-pocket costs
for each drug covered by the product.  
   (B) Facilitate comparison of drug coverage, cost sharing, and
utilization controls, including prior authorization or step therapy
requirements, between products. 
   (C)  Identification of   Indicate  any
drugs on the formulary that are preferred over other drugs on the
formulary. 
   (D) The notification described in subdivision (c) of Section
1363.01.  
   (b) The department may develop a standard formulary template
provided that the department consults with the Department of
Insurance on the template design. If the department develops this
template, a health care service plan shall use the template to comply
with paragraph (3) of subdivision (a).  
   (D) Include information about the coverage of drugs under the
product's medical benefit. This information shall allow a consumer to
easily determine whether a drug is covered. 
   (c) For purposes of this section, "formulary" means the complete
list of drugs preferred for use and eligible for coverage under a
health care service plan product and includes the drugs covered under
both the pharmacy benefit of the product and the medical benefit of
the product.
  SEC. 4.  Section 1368.016 of the Health and Safety Code is amended
to read:
   1368.016.  (a) A health care service plan that provides coverage
for professional mental health services, including a specialized
health care service plan that provides coverage for professional
mental health services, shall, pursuant to subdivision (f) of Section
1368.015, include on its Internet Web site, or provide a link to,
the following information:
   (1) A telephone number that the enrollee or provider can call,
during normal business hours, for assistance obtaining mental health
benefits coverage information, including the extent to which benefits
have been exhausted, in-network provider access information, and
claims processing information.
   (2) A link to prescription drug formularies posted pursuant to
Section 1367.205, or instructions on how to obtain the formulary, as
described in Section 1367.20.
   (3) A detailed summary that describes the process by which the
plan reviews and authorizes or approves, modifies, or denies requests
for health care services as described in Sections 1363.5 and
1367.01.
   (4) Lists of providers or instructions on how to obtain the
provider list, as required by Section 1367.26.
   (5) A detailed summary of the enrollee grievance process as
described in Sections 1368 and 1368.015.
   (6) A detailed description of how an enrollee may request
continuity of care pursuant to subdivisions (a) and (b) of Section
1373.95.
   (7) Information concerning the right, and applicable procedure, of
an enrollee to request an independent medical review pursuant to
Section 1374.30.
   (b) Any modified material described in subdivision (a) shall be
updated at least quarterly.
   (c) The information described in subdivision (a) may be made
available through a secured Internet Web site that is only accessible
to enrollees.
   (d) The material described in subdivision (a) shall also be made
available to enrollees in hard copy upon request.
   (e) Nothing in this article shall preclude a health care service
plan from including additional information on its Internet Web site
for applicants, enrollees or subscribers, or providers, including,
but not limited to, the cost of procedures or services by health care
providers in a plan's network.
   (f) The department shall include on the department's Internet Web
site a link to the Internet Web site of each health care service plan
and specialized health care service plan described in subdivision
(a).
   (g) This section shall not apply to Medicare supplement insurance,
Employee Assistance Programs, short-term limited duration health
insurance, Champus-supplement insurance, or TRI-CARE supplement
insurance, or to hospital indemnity, accident-only, and specified
disease insurance. This section shall also not apply to specialized
health care service plans, except behavioral health-only plans.
   (h) This section shall not apply to a health care service plan
that contracts with a specialized health care service plan, insurer,
or other entity to cover professional mental health services for its
enrollees, provided that the health care service plan provides a link
on its Internet Web site to an Internet Web site operated by the
specialized health care service plan, insurer, or other entity with
which it contracts, and that plan, insurer, or other entity complies
with this section or Section 10123.199 of the Insurance Code.
  SEC. 5.  Section 10123.192 is added to the Insurance Code, to read:

   10123.192.  (a) A health insurer that provides prescription drug
benefits and maintains one or more drug formularies shall do all of
the following:
   (1) Post the formulary or formularies for each product offered by
the insurer on the insurer's Internet Web site in a manner that is
accessible and searchable by potential insureds, insureds, and
providers.
   (2) Update the formularies posted pursuant to paragraph (1) with
any change to those formularies within  24  72
 hours after making the change.
   (3)  Use a standard   No later than six
months after the date that a standard formulary template is developed
under subdivision (b), use that  template to display the
formulary or formularies for each product offered by the insurer.
 This template shall do both of the following: 

   (A) Use the United States Pharmacopeia classification system.
 
   (B) Organize drugs by therapeutic class, listing drugs
alphabetically.  
   (4) Include all of the following on any published formulary for
any product offered by the insurer, including, but not limited to,
the formulary or formularies posted pursuant to paragraph (1):
 
   (A) Any prior authorization or step edit requirements for each
specific drug included on the formulary.  
   (B) The range of cost sharing for a potential insured of each
specific drug included on the formulary, as follows: 

   (i) Under $100 - $.  
   (ii) $100-$250 - $$.  
   (iii) $251-$500 - $$$.  
   (iv) Over $500 - $$$$.  
   (b) (1) By April 1, 2016, the department and the Department of
Managed Health Care shall jointly, and with input from interested
parties from at least one public meeting, develop a standard
formulary template for purposes of paragraph (3) of subdivision (a).
In developing the template, the department and Department of Managed
Health Care shall take into consideration existing requirements for
reporting of formulary information established by the federal Centers
for Medicare and Medicaid Services.  
   (2) The standard formulary template shall include a notification
that the presence of a drug on the insurer's formulary does not
guarantee that an insured will be prescribed that drug by his or her
prescribing provider for a particular medical condition. As applied
to a particular formulary for a product offered by an insurer, the
standard formulary template shall do all of the following:  

   (A) Include information on cost sharing and utilization controls,
including prior authorization or step therapy requirements, for each
drug covered by the product. To the extent feasible, the template
shall provide consumers with an estimate of their out-of-pocket costs
for each drug covered by the product.  
   (B) Facilitate comparison of drug coverage, cost sharing, and
utilization controls, including prior authorization or step therapy
requirements, between products. 
   (C)  Identification of   Indicate  any
drugs on the formulary that are preferred over other drugs on the
formulary. 
   (D) A notification that the presence of a drug on the insurer's
formulary does not guarantee that an insured will be prescribed that
drug by his or her prescribing provider for a particular medical
condition.  
   (b) The department may develop a standard formulary template
provided that the department consults with the Department of Managed
Health Care on the template design. If the department develops this
template, a health insurer shall use the template to comply with
paragraph (3) of subdivision (a).  
   (D) Include information about the coverage of drugs under the
product's medical benefit. This information shall allow a consumer to
easily determine whether a drug is covered. 
   (c) For purposes of this section, "formulary" means the complete
list of drugs preferred for use and eligible for coverage under a
health insurance product and includes the drugs covered under both
the pharmacy benefit of the product and the medical benefit of the
product.
  SEC. 6.  Section 10123.199 of the Insurance Code is amended to
read:
   10123.199.  (a) A health insurer that provides coverage for
professional mental health services shall establish an Internet Web
site. Each Internet Web site shall include, or provide a link to, the
following information:
   (1) A telephone number that the insured or provider can call,
during normal business hours, for assistance obtaining mental health
benefits coverage information, including the extent to which benefits
have been exhausted, in-network provider access information, and
claims processing information.
   (2) A link to prescription drug formularies posted pursuant to
Section 10123.192, or instructions on how to obtain formulary
information.
   (3) A detailed summary description of the process by which the
insurer reviews and approves, modifies, or denies requests for health
care services as described in Section 10123.135.
   (4) Lists of providers or instructions on how to obtain a provider
list as required by Section 10133.1.
   (5) A detailed summary of the health insurer's grievance process.
   (6) A detailed description of how the insured may request
continuity of care as described in Section 10133.55.
   (7) Information concerning the right, and applicable procedure, of
the insured to request an independent medical review pursuant to
Section 10169.
   (b) Except as otherwise specified, the material described in
subdivision (a) shall be updated at least quarterly.
   (c) The information described in subdivision (a) may be made
available through a secured Internet Web site that is only accessible
to the insured.
   (d) The material described in subdivision (a) shall also be made
available to insureds in hard copy upon request.
   (e) Nothing in this article shall preclude an insurer from
including additional information on its Internet Web site for
applicants or insureds, including, but not limited to, the cost of
procedures or services by health care providers in an insurer's
network.
   (f) The department shall include on the department's Internet Web
site, a link to the Internet Web site of each health insurer
described in subdivision (a).
   (g) This section shall not apply to Medicare supplement insurance,
Employee Assistance Programs, short-term limited duration health
insurance, Champus-supplement insurance, or TRI-CARE supplement
insurance, or to hospital indemnity, accident-only, and specified
disease insurance. This section shall also not apply to specialized
health insurance policies, except behavioral health-only policies.
   (h) This section shall not apply to a health insurer that
contracts with a specialized health care service plan, insurer, or
other entity to cover professional mental health services for its
insureds, provided that the health insurer provides a link on its
Internet Web site to an Internet Web site operated by the specialized
health care service plan, insurer, or other entity with which it
contracts, and that plan, insurer, or other entity complies with this
section or Section 1368.016 of the Health and Safety Code.
  SEC. 7.  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.