Bill Text: CA SB866 | 2011-2012 | Regular Session | Amended

California Senate Bill 866 (Prior Session Legislation)

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

Bill Title: Health care coverage: prescription drugs.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2011-10-09 - Chaptered by Secretary of State. Chapter 648, Statutes of 2011. [SB866 Detail]

Download: California-2011-SB866-Amended.html

BILL NUMBER: SB 866	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MAY 31, 2011
	AMENDED IN SENATE  APRIL 11, 2011

INTRODUCED BY   Senator Hernandez

                        FEBRUARY 18, 2011

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



	LEGISLATIVE COUNSEL'S DIGEST


   SB 866, 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 also imposes various requirements and restrictions on
health care service plans and health insurers, including, among
other things, a prohibition on health care service plans and health
insurers that provide prescription drug benefits from excluding or
limiting coverage for a drug on the basis that the drug is prescribed
for a use that is different from the use for which the drug has been
approved for marketing by the federal Food and Drug Administration.
Existing law also requires a health care service plan that provides
prescription drug benefits to maintain an expeditious process by
which prescribing providers, as described, may obtain authorization
for a medically necessary nonformulary prescription drug, according
to certain procedures.
   This bill would require the Department of Managed Health Care and
the Department of Insurance to, on or before July 1, 2012, develop a
prior authorization form for use by every health care service plan
and health insurer that provides prescription drug benefits, except
as specified.  The   On and after  
January 1, 2013, the  bill would require every prescribing
provider, as defined, when requesting prior authorization for
prescription drug benefits, to submit the prior authorization form to
the health care service plan or health insurer, and would require
those plans and insurers to utilize and accept those prior
authorization forms for prescription drug benefits.  Upon
  Except as specified, upon  a failure  by the
plan or insurer  to accept the prior authorization form or to
respond to a prescribing provider within  48 hours 
 2 business days  , the bill would deem the prior
authorization request as granted  , as specified  .
   Because a willful violation of the bill's provisions relative to
health care service plans 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.  Section 1367.241 is added to the Health and Safety
Code, to read:
   1367.241.  (a) Notwithstanding any other provision of law, on and
after  July 1, 2012   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) 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.
   (b) If a health care service plan fails to utilize or accept the
prior authorization form, or fails to respond within  48
hours to   two business days upon receipt of  a
prior authorization request from a prescribing provider, pursuant to
the submission of a prior authorization form, the prior authorization
request shall be deemed to have been granted.  This provision
shall not apply to contracts entered into pursuant to Chapter 7
(commencing with Section 14000) or Chapter 8 (commencing with Section
14200) of Division 9 of Part 3 of the Welfare and Institutions Code,
between the State Department of Health Care Services and a health
care service plan for enrolled Medi-Cal beneficiaries. 
   (c) On or before July 1, 2012, the department and the Department
of Insurance shall jointly develop a uniform prior authorization form
 that, notwithstanding   . Notwithstanding
 any other provision of law,  on and after January 1, 2013,
 every prescribing provider shall use  that uniform prior
authorization form  to request prior authorization for coverage
of prescription drug benefits and  that  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) 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 is added to the Insurance Code, to read:

   10123.191.  (a) Notwithstanding any other provision of law, on and
after  July 1, 2012   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) 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  48 hours to
  two business days upon receipt of  a prior
authorization request from a prescribing provider, pursuant to the
submission of a prior authorization form, the prior authorization
request shall be deemed to have been granted.  This provision
shall not apply to policies entered into pursuant to Chapter 7
(commencing with Section 14000) or Chapter 8 (commencing with Section
14200) of Division 9 of Part 3 of the Welfare and Institutions Code,
between the State Department of Health Care Services and a health
insurer for enrolled Medi-Cal beneficiaries. 
   (c) On or before July 1, 2012, the department and the Department
of Managed Health Care shall jointly develop a uniform prior
authorization form  that, notwithstanding   .
  Notwithstanding  any other provision of law,  on
and after January 1, 2013,  every prescribing provider shall use
 that prior authorization form  to request prior
authorization for coverage of prescription drug benefits and that
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) 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.