BILL NUMBER: AB 339	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Gordon

                        FEBRUARY 13, 2015

   An act to add Section 1342.71 to the Health and Safety Code, and
to add Section 10123.193 to the Insurance Code, relating to health
care coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 339, as introduced, Gordon. Health care coverage: outpatient
prescription drugs.
   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 requires a health care service plan or insurer that
provides prescription drug benefits and maintains one or more drug
formularies to make specified information regarding the formularies
available to the public and other specified entities. Existing law
also specifies requirements for those plans and insurers regarding
coverage and cost sharing of specified prescription drugs.
   This bill would require health care service plan contracts and
policies of health insurance that are offered, renewed, or amended
after January 1, 2016, and that provide coverage for outpatient
prescription drugs, to provide coverage for medically necessary
prescription drugs that do not have a therapeutic equivalent. This
bill would require copayments, coinsurance, and other cost sharing
for these drugs to be reasonable. This bill would require those
contracts and policies to cover single-tablet and extended release
prescription drug regimens, unless the plan or insurer can
demonstrate that multitablet and nonextended release drug regimens,
respectively, are more or equally effective, as specified. This bill
would prevent those plans and policies from placing prescription
medications that treat a specific condition on the highest cost tier
of a drug formulary. This bill would require the Department of
Managed Health Care and the Department of Insurance to create a
definition of "specialty prescription drugs," subject to specified
limitations, no later than January 1, 2017.
   Because a willful violation of the bill's requirements relative to
health care service plans would be a crime, this 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 1342.71 is added to the Health and Safety Code,
to read:
   1342.71.  (a) A health care service plan contract that is offered,
amended, or renewed on or after January 1, 2016, shall comply with
this section. This section shall not apply to Medi-Cal managed care
contracts.
   (b) (1) A health care service plan that provides coverage for
outpatient prescription drugs shall cover medically necessary
prescription drugs.
   (2) A health care service plan that provides coverage for
outpatient prescription drugs shall cover a medically necessary
prescription drug for which there is not a therapeutic equivalent.
   (c) Copayments, coinsurance, and other cost sharing for outpatient
prescription drugs shall be reasonable so as to allow access to
medically necessary outpatient prescription drugs. The health care
service plan shall demonstrate to the director that proposed cost
sharing for a medically necessary prescription drug will not
discourage medication adherence.
   (d) Consistent with federal law and guidance, and notwithstanding
Section 1342.7 and any regulations adopted pursuant to that section,
a health care service plan that provides coverage for outpatient
prescription drugs shall not discourage the enrollment of individuals
with health conditions.
   (1) A health care service plan contract shall cover a
single-tablet drug regimen that is as effective as a multitablet
regimen unless the health care service plan is able to demonstrate to
the director that consistent with clinical guidelines and
peer-reviewed scientific and medical literature that the multitablet
regimen is clinically more effective and equally or more likely to
result in adherence to a drug regimen. A health care service plan
contract shall cover an extended release prescription drug that is
clinically as effective as a nonextended release product unless the
health care service plan is able to demonstrate to the director that
consistent with clinical guidelines and peer-reviewed scientific and
medical literature that the nonextended release product is clinically
equally or more effective. The cost sharing for the enrollee shall
be the same for a single-tablet regimen as for the drugs included in
a multitablet regimen. The same cost sharing shall apply for an
extended release product as for a nonextended release product.
   (2) A health care service plan contract shall not place most or
all of the prescription medications that treat a specific condition
on the highest cost tier of a formulary. This shall not apply to any
medication for which there is a therapeutic equivalent available on a
lower cost tier.
   (3) A health care service plan shall demonstrate to the director
that any limitation or utilization management is consistent with and
based on clinical guidelines and peer-reviewed scientific and medical
literature.
   (e) (1) No later than January 1, 2017, the department shall
develop a definition of specialty prescription drugs that is based on
clinical guidelines and peer-reviewed scientific and medical
literature, including the need for special handling, storage,
administration, clinical monitoring, or reporting clinical outcomes
to the federal Food and Drug Administration of such prescription
drugs.
   (2) The definition of specialty prescription drugs shall not be
based on the cost of the prescription drug to the health care service
plan but shall be based on medical management.
   (3) A health care service plan contract shall use the definition
of specialty drug developed by the department in its outpatient
prescription drug benefit plan. The highest cost tier of a formulary
shall be based on clinical guidelines and medical evidence and shall
not be based on the cost of the prescription drug.
   (f) Nothing in this section shall be construed to require or
authorize a health care service plan that contracts with the State
Department of Health Care Services to provide services to Medi-Cal
beneficiaries to provide coverage for prescription drugs that are not
required pursuant to those programs or contracts, or to limit or
exclude any prescription drugs that are required by those programs or
contracts.
  SEC. 2.  Section 10123.193 is added to the Insurance Code, to read:

   10123.193.  (a) A policy of health insurance that is offered,
amended, or renewed on or after January 1, 2016, shall comply with
this section.
   (b) (1) A policy of health insurance that provides coverage for
outpatient prescription drugs shall cover medically necessary
prescription drugs.
   (2) A policy of health insurance that provides coverage for
outpatient prescription drugs shall cover a medically necessary
prescription drug for which there is not a therapeutic equivalent.
   (c) Copayments, coinsurance, and other cost sharing for outpatient
prescription drugs shall be reasonable so as to allow access to
medically necessary outpatient prescription drugs. The health insurer
shall demonstrate to the commissioner that proposed cost sharing for
a medically necessary prescription drug will not discourage
medication adherence.
   (d) Consistent with federal law and guidance, and notwithstanding
Section 1342.7 of the Health and Safety Code, and any regulations
adopted pursuant to that section, a policy of health insurance that
provides coverage for outpatient prescription drugs shall not
discourage the enrollment of individuals with health conditions.
   (1) A policy of health insurance shall cover a single-tablet drug
regimen that is as effective as a multitablet regimen unless the
health insurer is able to demonstrate to the commissioner that
consistent with clinical guidelines and peer-reviewed scientific and
medical literature that the multitablet regimen is clinically more
effective and equally or more likely to result in adherence to a drug
regimen. A policy of health insurance shall cover an extended
release prescription drug that is clinically as effective as a
nonextended release product unless the health insurer is able to
demonstrate to the commissioner that consistent with clinical
guidelines and peer-reviewed scientific and medical literature that
the nonextended release product is clinically equally or more
effective. The cost sharing for the enrollee shall be the same for a
single-tablet regimen as for the drugs included in a multitablet
regimen. The same cost sharing shall apply for an extended release
product as for a nonextended release product.
   (2) A policy of health insurance shall not place most or all of
the prescription medications that treat a specific condition on the
highest cost tier of a formulary. This shall not apply to any
medication for which there is a therapeutic equivalent available on a
lower cost tier.
   (3) A health insurer shall demonstrate to the commissioner that
any limitation or utilization management is consistent with and based
on clinical guidelines and peer-reviewed scientific and medical
literature.
   (e) (1) No later than January 1, 2017, the department shall
develop a definition of specialty prescription drugs that is based on
clinical guidelines and peer-reviewed scientific and medical
literature, including the need for special handling, storage,
administration, clinical monitoring, or reporting clinical outcomes
to the federal Food and Drug Administration of such prescription
drugs.
   (2) The definition of specialty prescription drugs shall not be
based on the cost of the prescription drug to the health insurer but
shall be based on medical management.
   (3) A policy of health insurance shall use the definition of
specialty drug developed by the department in its outpatient
prescription drug benefit plan. The highest cost tier of a formulary
shall be based on clinical guidelines and medical evidence and shall
not be based on the cost of the prescription drug.
   (f) Nothing in this section shall be construed to require or
authorize a health insurer that contracts with the State Department
of Health Care Services to provide services to Medi-Cal beneficiaries
to provide coverage for prescription drugs that are not required
pursuant to those programs or health insurance policies, or to limit
or exclude any prescription drugs that are required by those programs
or health insurance policies.
  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.