Bill Text: CA SB282 | 2015-2016 | 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2015-10-08 - Chaptered by Secretary of State. Chapter 654, Statutes of 2015. [SB282 Detail]

Download: California-2015-SB282-Amended.html

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BILL NUMBER: SB 282	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 9, 2015

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 19, 2015

   An act to amend Section 1367.241 of the Health and Safety Code,
and to amend Section 10123.191 of the Insurance Code, relating to
health care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 282, as amended, Hernandez. Health care coverage: prescription
drugs.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the 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. Commonly referred to as
utilization review, existing law governs the procedures that apply to
every health care service plan and health insurer that
prospectively, retrospectively, or concurrently reviews and approves,
modifies, delays, or denies, based on medical necessity, requests by
providers prior to, retrospectively, or concurrent with, the
provision of health care services to enrollees or insureds, as
specified. Existing law requires every prescribing provider, as
defined, when requesting prior authorization for prescription drug
benefits, to submit a prior authorization form developed jointly by
the Department of Managed Health Care and the Department of Insurance
to the health care service plan or health insurer, and requires
those plans and insurers to accept only those prior authorization
forms for prescription drug benefits. Existing law authorizes a
prescribing provider to submit the form electronically to the plan or
insurer.
   This bill would authorize the prescribing provider to additionally
use an electronic process developed specifically for transmitting
prior authorization information that is consistent with the
standardized form described above and that meets the National Council
for Prescription Drug Programs' SCRIPT  standard for 
electronic prior authorization  standards.  
transactions.  To the extent that the bill would thereby require
plans and insurers to accept that form of submission, the bill would
expand the scope of a crime and would impose a state-mandated local
program.  The bill would specify that the provisions described
above relating to prior authorization for prescription drug benefits
do not apply if a contracted network physician group is delegated the
financial risk for the pharmacy or medical drug benefit by a health
care service plan or health insurer, if a contracted network
physician group uses its own internal prior authorization process
rather than the health care service plan's or the health insurer's
prior authorization process for its enrollees or insureds, or if a
contracted network physician group is delegated a utilization
management function by the health care service plan or the health
insurer concerning any pharmacy or medical   drug benefit,
regardless of the delegation of financial risk. 
   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 1367.241 of the Health and Safety Code is
amended to read:
   1367.241.  (a) Notwithstanding any other provision of law, on and
after January 1, 2013, a health care service plan that provides
prescription drug benefits shall accept only the prior authorization
form developed pursuant to subdivision (c), or an electronic prior
authorization process described in subdivision (e), when requiring
prior authorization for prescription drug benefits. This section does
not apply in the event that a physician or physician group has been
delegated the financial risk for prescription drugs by a health care
service plan and does not use a prior authorization process. This
section does not apply to a health care service plan, or to its
affiliated providers, if the health care service plan owns and
operates its pharmacies and does not use a prior authorization
process for prescription drugs.
   (b) If a health care service plan fails to utilize or accept the
prior authorization form, or fails to respond within two business
days upon receipt of a completed prior authorization request from a
prescribing provider, pursuant to the submission of the prior
authorization form developed as described in subdivision (c), or an
electronic prior authorization process described in subdivision (e),
the prior authorization request shall be deemed to have been granted.
The requirements of this subdivision shall not apply to contracts
entered into pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), or Article 2.91 (commencing with
Section 14089) of Chapter 7 of, or Chapter 8 (commencing with
Section 14200) of, Part 3 of Division 9 of the Welfare and
Institutions Code.
   (c) On or before July 1, 2012, the department and the Department
of Insurance shall jointly develop a uniform prior authorization
form. Notwithstanding any other provision of law, on and after
January 1, 2013, or six months after the form is developed, whichever
is later, every prescribing provider shall use that uniform prior
authorization form, or an electronic prior authorization process
described in subdivision (e), to request prior authorization for
coverage of prescription drug benefits and every health care service
plan shall accept that form as sufficient to request prior
authorization for prescription drug benefits.
   (d) The prior authorization form developed pursuant to subdivision
(c) shall meet the following criteria:
   (1) The form shall not exceed two pages.
   (2) The form shall be made electronically available by the
department and the health care service plan.
   (3) The completed form may also be electronically submitted from
the prescribing provider to the health care service plan.
   (4) The department and the Department of Insurance shall develop
the form with input from interested parties from at least one public
meeting.
   (5) The department and the Department of Insurance, in development
of the standardized form, shall take into consideration the
following:
   (A) Existing prior authorization forms established by the federal
Centers for Medicare and Medicaid Services and the State Department
of Health Care Services.
   (B) National standards pertaining to electronic prior
authorization.
   (e) A prescribing provider may use an electronic prior
authorization system utilizing the standardized form described in
subdivision (c) or an electronic process developed specifically for
transmitting prior authorization information that is consistent with
the standardized form described in subdivision (c) and that meets
 the  National Council for Prescription Drug Programs'
SCRIPT  standard for  electronic prior authorization
 standards.   transactions.  
   (f) This section does not apply if any of the following occurs:
 
   (1) A contracted network physician group is delegated the
financial risk for the pharmacy or medical drug benefit by a health
care service plan.  
   (2) A contracted network physician group uses its own internal
prior authorization process rather than the health care service plan'
s prior authorization process for plan enrollees.  
   (3) A contracted network physician group is delegated a
utilization management function by the health care service plan
concerning any pharmacy or medical drug benefit, regardless of the
delegation of financial risk.  
   (f) 
   (g)  For purposes of this section, a "prescribing
provider" shall include a provider authorized to write a
prescription, pursuant to subdivision (a) of Section 4040 of the
Business and Professions Code, to treat a medical condition of an
enrollee.
  SEC. 2.  Section 10123.191 of the Insurance Code is amended to
read:
   10123.191.  (a) Notwithstanding any other provision of law, on and
after January 1, 2013, a health insurer that provides prescription
drug benefits shall utilize and accept only the prior authorization
form developed pursuant to subdivision (c), or an electronic prior
authorization process described in subdivision (e), when requiring
prior authorization for prescription drug benefits.
   (b) If a health insurer fails to utilize or accept the prior
authorization form, or fails to respond within two business days upon
receipt of a completed prior authorization request from a
prescribing provider, pursuant to the submission of the prior
authorization form developed as described in subdivision (c), or an
electronic prior authorization process described in subdivision (e),
the prior authorization request shall be deemed to have been granted.
The requirements of this subdivision shall not apply to contracts
entered into pursuant to Article 2.7 (commencing with Section
14087.3), Article 2.8 (commencing with Section 14087.5), Article 2.81
(commencing with Section 14087.96), or Article 2.91 (commencing with
Section 14089) of Chapter 7 of, or Chapter 8 (commencing with
Section 14200) of, Part 3 of Division 9 of the Welfare and
Institutions Code.
   (c) On or before July 1, 2012, the department and the Department
of Managed Health Care shall jointly develop a uniform prior
authorization form. Notwithstanding any other provision of law, on
and after January 1, 2013, or six months after the form is developed,
whichever is later, every prescribing provider shall use that
uniform prior authorization form, or an electronic prior
authorization process described in subdivision (e), to request prior
authorization for coverage of prescription drug benefits and every
health insurer shall accept that form as sufficient to request prior
authorization for prescription drug benefits.
   (d) The prior authorization form developed pursuant to subdivision
(c) shall meet the following criteria:
   (1) The form shall not exceed two pages.
   (2) The form shall be made electronically available by the
department and the health insurer.
   (3) The completed form may also be electronically submitted from
the prescribing provider to the health insurer.
   (4) The department and the Department of Managed Health Care shall
develop the form with input from interested parties from at least
one public meeting.
   (5) The department and the Department of Managed Health Care, in
development of the standardized form, shall take into consideration
the following:
   (A) Existing prior authorization forms established by the federal
Centers for Medicare and Medicaid Services and the State Department
of Health Care Services.
   (B) National standards pertaining to electronic prior
authorization.
   (e) A prescribing provider may use an electronic prior
authorization system utilizing the standardized form described in
subdivision (c) or an electronic process developed specifically for
transmitting prior authorization information that is consistent with
the standardized form described in subdivision (c) and that meets
 the  National Council for Prescription Drug Programs'
SCRIPT  standard for  electronic prior authorization
 standards.   transactions.  
   (f) This section does not apply if any of the following occurs:
 
   (1) A contracted network physician group is delegated the
financial risk for the pharmacy or medical drug benefit by a health
insurer.  
   (2) A contracted network physician group uses its own internal
prior authorization process rather than the health insurer's prior
authorization process for the health insurer's insureds.  
   (3) A contracted network physician group is delegated a
utilization management function by the health insurer concerning any
pharmacy or medical drug benefit, regardless of the delegation of
financial risk.  
   (f) 
    (g)  For purposes of this section, a "prescribing
provider" shall include a provider authorized to write a
prescription, pursuant to subdivision (a) of Section 4040 of the
Business and Professions Code, to treat a medical condition of an
insured.
  SEC. 3.  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.