Bill Text: CA AB2418 | 2013-2014 | Regular Session | Amended

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

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Bill Title: Health care coverage: prescription drugs: refills.

Spectrum: Moderate Partisan Bill (Democrat 5-1)

Status: (Vetoed) 2014-09-25 - Vetoed by Governor. [AB2418 Detail]

Download: California-2013-AB2418-Amended.html

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BILL NUMBER: AB 2418	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 19, 2014
	AMENDED IN SENATE  JULY 3, 2014
	AMENDED IN SENATE  JULY 1, 2014
	AMENDED IN ASSEMBLY  MAY 27, 2014
	AMENDED IN ASSEMBLY  MAY 7, 2014
	AMENDED IN ASSEMBLY  APRIL 23, 2014

INTRODUCED BY   Assembly Members Bonilla and Skinner
   (Coauthors: Assembly Members Bonta, Maienschein, Nazarian, and
Nestande)

                        FEBRUARY 21, 2014

   An act to add Sections  1367.247, 1367.248,  
1367.248  and 1367.249 to the Health and Safety Code, and to
add Sections  10123.207, 10123.208,   10123.208
 and 10123.209 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2418, as amended, Bonilla. Health care coverage: prescription
drugs: refills.
   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 also provides for the
regulation of health insurers by the Department of Insurance.
Existing law imposes various requirements on contracts and policies
that cover prescription drug benefits. Existing law, the Pharmacy
Law, provides for the licensure and regulation of pharmacists by the
California State Board of Pharmacy and prohibits the refilling of a
prescription without the authorization of the prescriber, except as
specified.
   This bill would require a health care service plan contract or
health insurance policy issued, amended, or renewed on or after
January 1, 2016, that provides coverage for prescription drug
benefits  and imposes a mandatory mail-order restriction for
a drug that has a monthly cost to the health care service plan or
health insurer that is less than twice the Medicare minimum specialty
tier eligibility threshold to establish a process allowing enrollees
and insureds to opt out of the restriction for that drug, as
specified. This bill would require a health care service plan or
health insurer to establish and implement a process to authorize
emergency refills at a participating specialty or community pharmacy
when any drug that is dispensed to an enrollee or an insured through
mail order is delivered in a condition that is unsafe to use, not
delivered, or delayed for a period of time that would cause the
enrollee or insured to not have the drug in time to comply with the
prescribed dosage instructions. The bill would require a health care
service plan contract or a health insurance policy issued, amended,
or renewed on or after January 1, 2016, that provides coverage for
prescription drug benefits  to permit and apply a prorated
daily cost-sharing rate to refills of prescriptions that are
dispensed by a participating pharmacy for less than the standard
refill amount if the prescriber or pharmacist indicates that the
refill is in the best interest of the enrollee or insured and is for
the purpose of synchronizing the refill dates of the enrollee's or
insured's medications, provided that certain requirements are
satisfied. The bill would also require a health care service plan
contract or health insurance policy issued, amended, or renewed on or
after January 1, 2016, that provides coverage for prescription drug
benefits to allow for the early refill of covered topical ophthalmic
products at 70% of the predicted days of use. Because a willful
violation of the bill's requirements by a health care service plan
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.
State-mandated local program: yes.


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

  SECTION 1.  The Legislature hereby finds and declares all of the
following:
   (a) As many as 75 percent of patients do not take their
medications as prescribed. Poor adherence to prescribed treatments
poses serious health risks to nonadhering patients, particularly
those with chronic diseases.
   (b) Poor adherence to prescribed treatments leads to unnecessary
disease progression, avoidable utilization of inpatient and
outpatient medical care, higher mortality rates, and increased
medical spending. According to the New England Healthcare Institute,
poor adherence to medication results in $100 billion in excess
hospital visits and a total of $290 billion in avoidable medical
spending each year -- 13 percent of all health care expenditures in
the United States. Adherence to prescription medication prevents
these unnecessary complications and is a cost-effective and simple
tool in the treatment of health conditions.
   (c) Given the evidence showing benefits to patients, the federal
Centers for Medicare and Medicaid Services requires Medicare Part D
plans to  permit beneficiaries to choose between mail-order
delivery or community pharmacy access to prescription drugs, requires
Part D plans to  allow for the synchronization of refill
dates for patients with multiple  prescriptions, 
 prescriptions  and recommends that Part D plans authorize
early refills of topical ophthalmic products at 70 percent of the
predicted days of use.
   (d) It is the intent of the Legislature to enact legislation that
promotes policies designed to improve patient medication adherence.

  SEC. 2.    Section 1367.247 is added to the Health
and Safety Code, to read:
   1367.247.  (a) A health care service plan contract issued,
amended, or renewed on or after January 1, 2016, that provides
coverage for prescription drug benefits and that imposes a mandatory
mail-order restriction for some or all covered prescription drugs
shall establish a process for enrollees to opt out of that
restriction. The opt out process may require the use of a plan's
participating specialty or community pharmacy that is not a
mail-order-only pharmacy, at the discretion of the plan. The opt out
process may require 30 days' written notice before the election to
opt out is effective. The opt out process shall comply with all of
the following requirements:
   (1) Not impose conditions or restrictions on an enrollee opting
out of the mandatory mail-order restriction. For purposes of this
subparagraph, "conditions or restrictions" include, but are not
limited to, requiring prescriber approval or submission of
documentation by the enrollee or prescriber.
   (2) Allow an enrollee to opt out of the mandatory mail-order
restriction, and revoke his or her prior opt out of the restriction,
at any time.
   (3) The choice by an enrollee to opt out shall be valid for the
duration of the plan year or until the enrollee elects to revoke the
opt out, whichever occurs first, provided that the enrollee remains
enrolled in the same product with either the same subscriber, with
respect to individual plan contracts, or the same plan sponsor, with
respect to group plan contracts.
   (4) A health care service plan shall provide an enrollee who
obtains a covered prescription drug that is subject to the mandatory
mail-order restriction with a separate written notice of the
restriction and any exceptions upon dispensing of the first fill of
the drug or no less than 30 days prior to the restriction taking
effect for the first refill of the drug. This written notice shall be
in addition to any information contained in the plan's evidence of
coverage or evidence of benefits. The notice shall inform the
enrollee of the right to opt out of the mandatory mail-order
restriction and instructions on how to do so.
   (b) This section shall not apply to a drug that is not available
at a participating community pharmacy due to any of the following:
   (1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration (FDA).
   (2) A manufacturer's instructions or restrictions.
   (3) Any risk evaluation and management strategy approved by the
FDA.
   (4) A special shortage affecting the plan's network of
participating pharmacies.
   (c) (1) The opt out requirement in subdivision (a) shall only
apply to a drug that has a monthly cost to the health care service
plan of less than twice the Medicare minimum specialty tier
eligibility threshold.
   (2) For any drug that is dispensed to an enrollee through mail
order, a health care service plan shall establish and implement a
process to authorize emergency refills at a plan's participating
specialty or community pharmacy when the drug is delivered in a
condition that is unsafe to use, not delivered, or delayed for a
period of time that would cause the enrollee to not have the drug in
time to comply with the prescribed dosage instructions.
   (d) Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a plan contract.
   (e) Nothing in this section shall be construed to limit or
prohibit differential copayments in the form of financial incentives
whereby an enrollee's cost sharing is reduced when he or she uses
mail order rather than a community pharmacy.
   (f) For purposes of this section, the following definitions shall
apply:
   (1) For group health care service plan contracts, "plan year" has
the meaning set forth in Section 144.103 of Title 45 of the Code of
Federal Regulations.
   (2) For individual health care service plan contracts, "plan year"
means the calendar year. 
   SEC. 3.   SEC. 2.   Section 1367.248 is
added to the Health and Safety Code, to read:
   1367.248.  (a) A health care service plan contract issued,
amended, or renewed on or after January 1, 2016, that provides
coverage for prescription drug benefits shall permit and apply a
prorated daily cost-sharing rate to the refills of prescriptions that
are dispensed by a participating pharmacy for less than the standard
refill amount if the prescriber or pharmacist indicates that the
refill for less than the standard amount is in the best interest of
the enrollee and is for the purpose of synchronizing the refill dates
of the enrollee's medications and all of the following apply:
   (1) The prescription drugs being synchronized are covered and
authorized by the health care service plan contract.
   (2) The prescription drugs being refilled for less than the
standard amount are not subject to quantity limits or other
utilization management controls that are inconsistent with the
synchronization plan, including, but not limited to, controlled
substance prescribing and dispensing guidelines intended to prevent
misuse or abuse.
   (3) The prescription drugs being synchronized are dispensed by a
single participating pharmacy.
   (4) The patient has completed at least 90 consecutive days on the
prescription drugs being synchronized.
   (5) The prescription drugs being refilled for less than the
standard amount are of a formulation that can be effectively split
over the required short fill period to achieve synchronization.
   (6) The prescriber has not done either of the following with
respect to the prescription drugs being refilled for less than the
standard amount:
   (A) Indicated, either orally or in his or her own handwriting, "No
change to quantity," or words of similar meaning.
   (B) Checked a box on the prescription marked "No change to
quantity," and personally initialed the box or checkmark.
   (b) This section shall not apply to a drug that is not available
at a participating community pharmacy due to any of the following:
   (1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration (FDA).
   (2) A manufacturer's instructions or restrictions.
   (3) Any risk evaluation and management strategy approved by the
FDA.
   (4) A special shortage affecting the plan's network of
participating pharmacies.
   (c) Nothing in this section shall be construed to establish a new
or mandated benefit or to prevent the application of deductible or
copayment provisions in a plan contract.
   SEC. 4.   SEC. 3.   Section 1367.249 is
added to the Health and Safety Code, to read:
   1367.249.  (a) A health care service plan contract issued,
amended, or renewed on or after January 1, 2016, that provides
coverage for prescription drug benefits shall allow for early refills
of covered topical ophthalmic products at 70 percent of the
predicted days of use.
   (b) Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a plan contract. 
  SEC. 5.    Section 10123.207 is added to the
Insurance Code, to read:
   10123.207.  (a) A health insurance policy issued, amended, or
renewed on or after January 1, 2016, that provides coverage for
prescription drug benefits and that imposes a mandatory mail-order
restriction for some or all covered prescription drugs shall
establish a process for insureds to opt out of that restriction. The
opt out process may require the use of a health insurer's
participating specialty or community pharmacy that is not a
mail-order-only pharmacy, at the discretion of the health insurer.
The opt out process may require 30 days' written notice before the
election to opt out is effective. The opt out process shall comply
with all of the following requirements:
   (1) Not impose conditions or restrictions on an insured opting out
of the mandatory mail-order restriction. For purposes of this
subparagraph, "conditions or restrictions" include, but are not
limited to, requiring prescriber approval or submission of
documentation by the insured or prescriber.
   (2) Allow an insured to opt out of the mandatory mail-order
restriction, and revoke his or her prior opt out of the restriction,
at any time.
   (3) The choice by an insured to opt out shall be valid for the
duration of the plan year or until the insured elects to revoke the
opt out, whichever occurs first, provided that the insured remains
enrolled in the same product with either the same policyholder, with
respect to individual policies, or the same plan sponsor, with
respect to group policies.
   (4) A health insurer shall provide an insured who obtains a
covered prescription drug that is subject to the mandatory mail-order
restriction with a separate written notice of the restriction and
any exceptions upon dispensing of the first fill of the drug or no
less than 30 days prior to the restriction taking effect for the
first refill of the drug. This written notice shall be in addition to
any information contained in the insurer's evidence of coverage or
evidence of benefits. The notice shall inform the insured of the
right to opt out of the mandatory mail-order restriction and
instructions on how to do so.
   (b) This section shall not apply to a drug that is not available
at a participating community pharmacy due to any of the following:
   (1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration (FDA).
   (2) A manufacturer's instructions or restrictions.
   (3) Any risk evaluation and management strategy approved by the
FDA.
   (4) A special shortage affecting the insurer's network of
participating pharmacies.
   (c) (1) The opt out requirement in subdivision (a) shall only
apply to a drug that has a monthly cost to the health insurer of less
than twice the Medicare minimum specialty tier eligibility
threshold.
   (2) For any drug that is dispensed to an insured through mail
order, a health insurer shall establish and implement a process to
authorize emergency refills at a health insurer's participating
specialty or community pharmacy when the drug is delivered in a
condition that is unsafe to use, not delivered, or delayed for a
period of time that would cause the insured to not have the drug in
time to comply with the prescribed dosage instructions.
   (d) Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a policy.
   (e) Nothing in this section shall be construed to limit or
prohibit differential copayments in the form of financial incentives
whereby an insured's cost sharing is reduced when he or she uses mail
order rather than a community pharmacy.
   (f) For purposes of this section, the following definitions shall
apply:
   (1) For group health insurance policies, "plan year" has the
meaning set forth in Section 144.103 of Title 45 of the Code of
Federal Regulations.
   (2) For individual health insurance policies, "plan year" means
the calendar year. 
   SEC. 6.   SEC. 4.   Section 10123.208 is
added to the Insurance Code, to read:
   10123.208.  (a) A health insurance policy issued, amended, or
renewed on or after January 1, 2016, that provides coverage for
prescription drug benefits shall permit and apply a prorated daily
cost-sharing rate to the refills of prescriptions that are dispensed
by a participating pharmacy for less than the standard refill amount
if the prescriber or pharmacist indicates that the refill for less
than the standard amount is in the best interest of the insured and
is for the purpose of synchronizing the refill dates of the insured's
medications and all of the following apply:
   (1) The prescription drugs being synchronized are covered and
authorized by the health insurance policy.
   (2) The prescription drugs being refilled for less than the
standard amount are not subject to quantity limits or other
utilization management controls that are inconsistent with the
synchronization plan, including, but not limited to, controlled
substance prescribing and dispensing guidelines intended to prevent
misuse or abuse.
   (3) The prescription drugs being synchronized are dispensed by a
single participating pharmacy.
   (4) The insured has completed at least 90 consecutive days on the
prescription drugs being synchronized.
   (5) The prescription drugs being refilled for less than the
standard amount are of a formulation that can be effectively split
over the required short fill period to achieve synchronization.
   (6) The prescriber has not done either of the following with
respect to the prescription drugs being refilled for less than the
standard amount:
   (A) Indicated, either orally or in his or her own handwriting, "No
change to quantity," or words of similar meaning.
   (B) Checked a box on the prescription marked "No change to
quantity," and personally initialed the box or checkmark.
   (b) This section shall not apply to a drug that is not available
at a participating community pharmacy due to any of the following:
   (1) An industry shortage listed on the Current Drug Shortages
Index maintained by the federal Food and Drug Administration (FDA).
   (2) A manufacturer's instructions or restrictions.
   (3) Any risk evaluation and management strategy approved by the
FDA.
   (4) A special shortage affecting the insurer's network of
participating pharmacies.
   (c) Nothing in this section shall be construed to establish a new
or mandated benefit or to prevent the application of deductible or
copayment provisions in a policy.
   SEC. 7.   SEC. 5.   Section 10123.209 is
added to the Insurance Code, to read:
   10123.209.  (a) A health insurance policy issued, amended, or
renewed on or after January 1, 2016, that provides coverage for
prescription drug benefits shall allow for early refills of covered
topical opthalmic products at 70 percent of the predicted days of
use.
   (b) Nothing in this section shall be construed to establish a new
mandated benefit or to prevent the application of deductible or
copayment provisions in a policy.
   SEC. 8.   SEC. 6.   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.