S T A T E O F N E W Y O R K
________________________________________________________________________
10411
I N A S S E M B L Y
March 25, 2010
___________
Introduced by M. of A. BING, BENEDETTO, ESPAILLAT, TITONE, DINOWITZ,
MILLMAN, PHEFFER, COOK, GIBSON, JACOBS, SPANO, MARKEY, BARRON,
N. RIVERA, MAISEL, CHRISTENSEN, JAFFEE, HOOPER -- Multi-Sponsored by
-- M. of A. BOYLAND, GLICK, McENENY -- read once and referred to the
Committee on Insurance
AN ACT to amend the insurance law, in relation to the prohibition on
first fail policies
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. The insurance law is amended by adding a new article 33 to
2 read as follows:
3 ARTICLE 33
4 PROHIBITION ON FIRST FAIL POLICIES
5 SECTION 3301. DEFINITIONS.
6 3302. PHARMACY BENEFITS MANAGER DUTIES.
7 3303. PRESCRIPTION DRUG DENIALS.
8 3304. SWITCH COMMUNICATIONS.
9 3305. PENALTIES.
10 3306. PRESCRIPTION DRUG RESTRICTION OVERRIDES.
11 S 3301. DEFINITIONS. AS USED IN THIS ARTICLE:
12 (A) "INSURER" SHALL MEAN ANY PERSON OR ENTITY WHO OFFERS A POLICY OF
13 ACCIDENT AND/OR HEALTH INSURANCE PURSUANT TO SECTION THREE THOUSAND TWO
14 HUNDRED SIXTEEN, THREE THOUSAND TWO HUNDRED TWENTY-ONE, OR FOUR THOUSAND
15 THREE HUNDRED THREE OF THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE PUBLIC
16 HEALTH LAW; EXCEPT WHEN SUCH HEALTH CARE SERVICES ARE PROVIDED, DELIV-
17 ERED, ARRANGED FOR, PAID FOR, OR REIMBURSED BY ANY STATE, DEPARTMENT OR
18 AGENCY;
19 (B) "PHARMACY BENEFITS MANAGER" OR "PBM", MEANS A PERSON OR ENTITY
20 OTHER THAN A PHARMACY OR PHARMACIST ACTING AS AN ADMINISTRATOR IN
21 CONNECTION WITH PHARMACY BENEFITS;
22 (C) "SWITCH COMMUNICATION", MEANS A COMMUNICATION FROM ANY INSURER OR
23 PBM TO A PATIENT OR THE PATIENT'S PHYSICIAN THAT RECOMMENDS A PATIENT'S
24 MEDICATION BE SWITCHED BY THE ORIGINAL PRESCRIBING HEALTH CARE PROFES-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15501-02-0
A. 10411 2
1 SIONAL TO A DIFFERENT MEDICATION THAN THE MEDICATION ORIGINALLY
2 PRESCRIBED BY THE PRESCRIBING HEALTH CARE PROFESSIONAL.
3 S 3302. PHARMACY BENEFITS MANAGER DUTIES. (A) A PHARMACY BENEFITS
4 MANAGER SHALL:
5 (1) REMIT TO THE COVERED ENTITY EACH INDIVIDUAL CLAIM, THE
6 PRESCRIPTION NUMBER, THE ELEVEN-DIGIT NATIONAL DRUG CODE (NDC) NUMBER,
7 THE QUANTITY AND THE AMOUNT THE PHARMACY BENEFITS MANAGER ACTUALLY PAID
8 EACH PHARMACY OR PHARMACIST, AND THE AMOUNT CHARGED TO THE PERSON, BUSI-
9 NESS, OR OTHER ENTITY THAT IS PURCHASING PHARMACIST'S SERVICES THROUGH
10 THE PHARMACY BENEFITS MANAGER; AND
11 (2) ITEMIZE BY INDIVIDUAL CLAIM THE AMOUNTS THE PHARMACY BENEFITS
12 MANAGER ACTUALLY PAID EACH PHARMACY OR PHARMACIST FOR PHARMACIST'S
13 SERVICES ON ANY INVOICE, STATEMENT, OR REMITTANCE.
14 (B) A PHARMACY BENEFITS MANAGER SHALL NOT:
15 (1) AUTOMATICALLY ENROLL OR PASSIVELY ENROLL THE PHARMACY IN A
16 CONTRACT, OR MODIFY AN EXISTING CONTRACT WITHOUT AFFIRMATION FROM THE
17 PHARMACY OR PHARMACIST. THE PHARMACY SHALL SIGN A CONTRACT BEFORE ASSUM-
18 ING RESPONSIBILITY TO FILL PRESCRIPTIONS;
19 (2) REQUIRE THAT A PHARMACY OR PHARMACIST PARTICIPATE IN ONE PHARMACY
20 BENEFITS MANAGER CONTRACT IN ORDER TO PARTICIPATE IN ANOTHER CONTRACT;
21 OR
22 (3) DISCRIMINATE BETWEEN PHARMACIES OR PHARMACISTS ON THE BASIS OF
23 COPAYMENTS OR DAYS OF SUPPLY.
24 (C) WHEN A PHARMACY BENEFITS MANAGER CALCULATES THE CHARGE FOR A
25 PRESCRIPTION TO THE RECIPIENT OF THE DRUG AND THE COVERED ENTITY, THE
26 PHARMACY BENEFITS MANAGER SHALL USE THE SAME NDC PRICE USED WHEN CALCU-
27 LATING THE REIMBURSEMENT TO THE DISPENSING PHARMACY.
28 (D) WHEN AN INSURED PRESENTS A PRESCRIPTION TO A PHARMACY IN THE PHAR-
29 MACY BENEFITS MANAGER'S NETWORK, THE PHARMACY BENEFITS MANAGER SHALL NOT
30 REASSIGN SUCH PRESCRIPTION TO BE FILLED BY ANY OTHER PHARMACY. WHEN THE
31 PHARMACY BENEFITS MANAGER CONTACTS THE PRESCRIBING HEALTH CARE PRACTI-
32 TIONER TO AFFIRM OR MODIFY THE ORIGINAL PRESCRIPTION WHICH HAS BEEN
33 DELIVERED TO A PARTICIPATING PHARMACY, THE AFFIRMED OR MODIFIED
34 PRESCRIPTION SHALL BE FILLED AT THE PHARMACY TO WHICH THE INSURED
35 PRESENTED THE ORIGINAL PRESCRIPTION.
36 S 3303. PRESCRIPTION DRUG DENIALS. (A) A POLICY OF ACCIDENT AND/OR
37 HEALTH INSURANCE THAT COVERS PRESCRIPTION DRUGS SHALL NOT LIMIT, REDUCE,
38 OR DENY COVERAGE FOR ANY DRUG IF, PRIOR TO THE LIMITATION, REDUCTION, OR
39 DENIAL OF COVERAGE:
40 (1) ANY INSURED WAS USING THE DRUG;
41 (2) SUCH INSURED OR INSUREDS WERE COVERED UNDER THE POLICY; AND
42 (3) THE DRUG WAS COVERED UNDER THE POLICY FOR SUCH INSURED INDIVIDUAL
43 OR INDIVIDUALS.
44 (B) A LIMITATION, REDUCTION, OR DENIAL OF COVERAGE INCLUDES REMOVING A
45 DRUG FROM THE FORMULARY OR OTHER DRUG LIST, IMPOSING NEW PRIOR AUTHORI-
46 ZATION OR OTHER UTILIZATION MANAGEMENT TOOLS, OR PLACING THE DRUG ON A
47 FORMULARY TIER THAT INCREASES THE PATIENT'S COST-SHARING OBLIGATIONS OR
48 OTHERWISE INCREASES THE PATIENT'S COST-SHARING OBLIGATIONS.
49 (C) NOTHING IN THIS SECTION SHALL PROHIBIT AN INSURER FROM MAKING
50 UNIFORM CHANGES IN ITS BENEFIT DESIGN THAT APPLY TO ALL COVERED DRUGS,
51 UNIFORMLY REMOVING A DRUG FROM THE FORMULARY LIST FOR ALL INSUREDS, OR
52 INCREASING COST-SHARING OBLIGATIONS MERELY DUE TO A PERCENTAGE COINSU-
53 RANCE PAYMENT THAT NECESSARILY INCREASES WITH AN INCREASE IN THE UNDER-
54 LYING DRUG PRICES.
55 S 3304. SWITCH COMMUNICATIONS. (A) ANY TIME A PATIENT'S PRESCRIBED
56 MEDICATION IS RECOMMENDED TO BE SWITCHED TO A MEDICATION OTHER THAN THAT
A. 10411 3
1 ORIGINALLY PRESCRIBED BY THE PRESCRIBING PRACTITIONER, A SWITCH COMMUNI-
2 CATION SHALL BE SENT TO:
3 (1) THE PATIENT AND SHALL PROVIDE INFORMATION ABOUT WHY THE SWITCH IS
4 PROPOSED AND THE PATIENT'S RIGHTS FOR REFUSING THE RECOMMENDED CHANGE IN
5 TREATMENT; AND
6 (2) THE POLICY SPONSOR AND SHALL INFORM SUCH SPONSOR OF THE COST,
7 SHOWN IN CURRENCY FORM, OF THE RECOMMENDED MEDICATION AND THE COST,
8 SHOWN IN CURRENCY FORM, OF THE ORIGINALLY PRESCRIBED MEDICATION.
9 (B) SUCH SWITCH COMMUNICATION SHALL:
10 (1) CLEARLY IDENTIFY THE ORIGINALLY PRESCRIBED MEDICATION AND THE
11 MEDICATION TO WHICH IT HAS BEEN PROPOSED THAT THE PATIENT SHOULD BE
12 SWITCHED;
13 (2) EXPLAIN ANY FINANCIAL INCENTIVES THAT MAY BE PROVIDED TO, OR HAVE
14 BEEN OFFERED TO, THE PRESCRIBING HEALTH CARE PROFESSIONAL BY THE INSURER
15 OR PBM THAT COULD RESULT IN THE SWITCH TO THE DIFFERENT DRUG. IN PARTIC-
16 ULAR, CASH OR IN-KIND COMPENSATION PAYABLE TO PRESCRIBERS OR THEIR
17 PROFESSIONAL PRACTICES FOR SWITCHING PATIENTS FROM THEIR CURRENTLY
18 PRESCRIBED MEDICATION TO A DIFFERENT MEDICATION SHALL BE DISCLOSED TO
19 THE PATIENT AS WELL AS INCENTIVES THAT MAY BE PROVIDED THROUGH GENERAL
20 HEALTH CARE PROFESSIONAL COMPENSATION PROGRAMS USED BY THE INSURER OR
21 PBM;
22 (3) EXPLAIN ANY FINANCIAL INCENTIVE THAT AN INSURER OR PBM MAY HAVE TO
23 ENCOURAGE THE SWITCH TO A DIFFERENT DRUG;
24 (4) ADVISE THE PATIENT OF HIS OR HER RIGHTS TO DISCUSS THE PROPOSED
25 CHANGE IN TREATMENT BEFORE SUCH A SWITCH TAKES PLACE, INCLUDING A
26 DISCUSSION WITH THE PATIENT'S PRESCRIBING PRACTITIONER, THE FILING OF A
27 GRIEVANCE WITH THE INSURER TO PREVENT THE SWITCH IF SUCH A SWITCH IS
28 BASED ON A FINANCIAL INCENTIVE AND THE FILING OF A GRIEVANCE WITH THE
29 DEPARTMENT; AND
30 (5) EXPLAIN ANY COST-SHARING CHANGES FOR WHICH THE PATIENT IS RESPON-
31 SIBLE.
32 (C) SWITCH COMMUNICATIONS TO HEALTH CARE PROVIDERS SHALL DISCLOSE
33 FINANCIAL INCENTIVES OR BENEFITS THAT MAY BE RECEIVED BY THE INSURER OR
34 PBM.
35 (D) SWITCH COMMUNICATIONS TO HEALTH CARE PROVIDERS SHALL DIRECT THE
36 PRESCRIBER TO ADVISE THE PATIENT THAT IS SUBJECTED TO A SWITCH BY THE
37 PRESCRIBER OF ANY FINANCIAL INCENTIVES RECEIVED BY THE PRESCRIBER OR
38 OTHER INDUCEMENTS FROM THE INSURER OR PBM THAT MAY INFLUENCE THE DECI-
39 SION TO SWITCH.
40 (E) A COPY OF ANY SWITCH COMMUNICATION SENT TO A PATIENT SHALL ALSO BE
41 SENT TO THE PRESCRIBING PRACTITIONER.
42 (F) HEALTH INSURANCE PAYERS, INCLUDING EMPLOYERS, SHALL BE NOTIFIED OF
43 MEDICATION SWITCHES AMONG POLICY PARTICIPANTS. SUCH NOTIFICATION SHALL
44 INCLUDE ANY FINANCIAL INCENTIVE THE INSURER OR PBM MAY BE UTILIZING TO
45 ENCOURAGE OR INDUCE THE SWITCH. INFORMATION CONTAINED IN THE NOTIFICA-
46 TION SHALL BE IN THE AGGREGATE AND MUST NOT CONTAIN ANY PERSONALLY IDEN-
47 TIFIABLE INFORMATION.
48 (G) THE DEPARTMENT SHALL CREATE ONE FORM FOR INSURERS AND PHARMACY
49 BENEFIT MANAGERS TO USE IN SWITCH COMMUNICATIONS TO PATIENTS, PRESCRIB-
50 ING PRACTITIONERS, AND HEALTH INSURANCE PAYERS INCLUDING EMPLOYERS.
51 (H) THE DEPARTMENT SHALL PROMULGATE RULES GOVERNING SWITCH COMMUNI-
52 CATIONS. SUCH RULES SHALL INCLUDE, BUT NOT BE LIMITED TO THE FOLLOWING:
53 (1) PROCEDURES FOR VERIFYING THE ACCURACY OF ANY SWITCH COMMUNICATIONS
54 FROM POLICIES OF ACCIDENT AND/OR HEALTH INSURANCE AND PHARMACY BENEFIT
55 MANAGERS TO ENSURE THAT SUCH SWITCH COMMUNICATIONS ARE TRUTHFUL, ACCU-
56 RATE, AND NOT MISLEADING BASED ON COST TO THE PATIENT AND POLICY SPON-
A. 10411 4
1 SOR, THE PRODUCT PACKAGE LABELING, MEDICAL COMPENDIA RECOGNIZED BY THE
2 DRUG UTILIZATION REVIEW BOARD, AND PEER-REVIEWED MEDICAL LITERATURE,
3 WITH APPROPRIATE REFERENCES PROVIDED;
4 (2) EXCEPT FOR A SUBSTITUTION DUE TO THE FOOD AND DRUG ADMINIS-
5 TRATION'S WITHDRAWAL OF A DRUG FOR PRESCRIPTION, A REQUIREMENT THAT ALL
6 SWITCH COMMUNICATIONS BEAR A PROMINENT LEGEND ON THE FIRST PAGE THAT
7 STATES: "THIS IS NOT A PRODUCT SAFETY NOTICE. THIS IS A PROMOTIONAL
8 ANNOUNCEMENT FROM YOUR HEALTH CARE INSURER OR PHARMACY BENEFITS MANAGER
9 ABOUT ONE OF YOUR CURRENT PRESCRIBED MEDICATIONS.";
10 (3) A REQUIREMENT THAT, IF THE SWITCH COMMUNICATION CONTAINS INFORMA-
11 TION REGARDING A POTENTIAL THERAPEUTIC SUBSTITUTION, SUCH COMMUNICATION
12 SHALL EXPLAIN THAT MEDICATIONS IN THE SAME THERAPEUTIC CLASS ARE ASSOCI-
13 ATED WITH DIFFERENT RISKS AND BENEFITS AND MAY WORK DIFFERENTLY IN
14 DIFFERENT PATIENTS.
15 S 3305. PENALTIES. (A) ISSUING OR DELIVERING OR CAUSING TO BE ISSUED
16 OR DELIVERED A SWITCH COMMUNICATION THAT HAS NOT BEEN APPROVED AND IS
17 NOT IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION THREE THOUSAND THREE
18 HUNDRED FOUR OF THIS ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWEN-
19 TY-FIVE THOUSAND DOLLARS.
20 (B) PROVIDING A MISREPRESENTATION OR FALSE STATEMENT IN A SWITCH
21 COMMUNICATION UNDER SECTION THREE THOUSAND THREE HUNDRED FOUR OF THIS
22 ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWENTY-FIVE THOUSAND
23 DOLLARS.
24 (C) ANY OTHER MATERIAL VIOLATION OF SECTION THREE THOUSAND THREE
25 HUNDRED FOUR OF THIS ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWEN-
26 TY-FIVE THOUSAND DOLLARS.
27 S 3306. PRESCRIPTION DRUG RESTRICTION OVERRIDES. (A) WHEN MEDICATIONS
28 FOR THE TREATMENT OF ANY MEDICAL CONDITION ARE RESTRICTED FOR USE BY AN
29 INSURER OR PBM BY A STEP THERAPY OR FAIL FIRST PROTOCOL, A PRESCRIBER
30 MAY OVERRIDE SUCH RESTRICTION IF:
31 (1) THE PREFERRED TREATMENT BY THE INSURER OR THE PBM HAS BEEN INEF-
32 FECTIVE IN THE TREATMENT OF THE COVERED PERSON'S DISEASE OR MEDICAL
33 CONDITION; OR
34 (2) BASED ON SOUND CLINICAL EVIDENCE AND MEDICAL AND SCIENTIFIC
35 EVIDENCE:
36 (A) THE PREFERRED TREATMENT IS EXPECTED TO BE INEFFECTIVE BASED ON THE
37 KNOWN RELEVANT PHYSICAL OR MENTAL CHARACTERISTICS OF THE COVERED PERSON
38 AND KNOWN CHARACTERISTICS OF THE DRUG REGIMEN, AND IS LIKELY TO BE INEF-
39 FECTIVE OR ADVERSELY AFFECT THE DRUG'S EFFECTIVENESS OR PATIENT COMPLI-
40 ANCE; OR
41 (B) THE PREFERRED TREATMENT HAS CAUSED OR IS LIKELY TO CAUSE AN
42 ADVERSE REACTION OR OTHER HARM TO THE COVERED PERSON.
43 (B) THE DURATION OF ANY STEP THERAPY OR FAIL FIRST PROTOCOL SHALL NOT
44 BE LONGER THAN A PERIOD OF FOURTEEN DAYS WHEN SUCH TREATMENT IS DEEMED
45 CLINICALLY INEFFECTIVE BY THE PRESCRIBING PHYSICIAN.
46 (C) FOR MEDICATIONS WITH NO GENERIC EQUIVALENT AND FOR WHICH THE
47 PRESCRIBING PHYSICIAN IN THEIR CLINICAL JUDGMENT FEELS THAT NO APPROPRI-
48 ATE THERAPEUTIC ALTERNATIVE IS AVAILABLE AN INSURER OR PBM SHALL PROVIDE
49 ACCESS TO UNITED STATES FOOD AND DRUG ADMINISTRATION (FDA) LABELED MEDI-
50 CATIONS WITHOUT RESTRICTION TO TREAT SUCH MEDICAL CONDITIONS FOR WHICH
51 AN FDA LABELED MEDICATION IS AVAILABLE.
52 (D) NOTHING IN THIS SECTION SHALL REQUIRE COVERAGE FOR A CONDITION
53 SPECIFICALLY EXCLUDED BY THE POLICY WHICH IS NOT OTHERWISE COVERED BY
54 LAW.
55 S 2. This act shall take effect immediately.
