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 health care service plan contracts and health insurance policies that cover prescription drug benefits.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017, that provides coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products according to specified standards. Because a willful violation of the bills 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.

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 health care service plan contracts and health insurance policies that cover prescription drug benefits.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017, that provides coverage for prescription drugs benefits to allow for early refills of covered topical ophthalmic products according to specified standards. Because a willful violation of the bills 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.

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 health care service plan contracts and health insurance policies that cover prescription drug benefits.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January July 1, 2017, that provides coverage for prescription drugs benefits to allow for early refills of covered topical ophthalmic products at 70% of the predicted days of use. according to specified standards. Because a willful violation of the bills 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.

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 health care service plan contracts and health insurance policies that cover prescription drug benefits.

This bill would require a health care service plan contract or health insurance policy issued, amended, or renewed on or after January 1, 2017, that provides coverage for prescription drugs benefits to allow for early refills of covered topical ophthalmic products at 70% of the predicted days of use. Because a willful violation of the bills 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.

GOVERNOR'S VETO

GV Bill Id:AB 1831

Author:(Low)

As Enrolled Ver:August 30, 2016

2/3 vote

Original Committee Reference: HEALTH

SUMMARY: Requires health care service plans (health plans) and health insurers to provide coverage for early refills of prescription topical ophthalmic products (TOPs).

The Senate amendments:

1. Add language delaying implementation until July 1, 2017.
2. Delete language allowing for early refills of TOPs at 70% of the predicted days of use.
3. Add language specifying standards for early refills of TOPs:
   1. For a 30-day supply, at least 23 days and less than 30 days from the later of either of the following:
      1. The original date that the prescription was distributed to the enrollee or insured; or,
      2. The date of the most recent refill that was distributed to the enrollee or insured.
   2. For a 90-day supply, at least 68 days and less than 90 days from the later of either of the following:
      1. The original date that the prescription was distributed to the enrollee or insured; or,
      2. The date of the most recent refill that was distributed to the enrollee or insured.
4. Add language prohibiting an enrollee or insured's refill request from exceeding the number of additional quantities prescribed by the enrollee or insured's participating health plan or health insurer provider.
5. Add language specifying that this bill does not prevent a health plan contract or health policy from allowing for early refills at or below 75% of the predicted days of use.

FISCAL EFFECT: According to the Senate Appropriations Committee,

1. Minor costs to review health insurer filings and take enforcement actions, as necessary, by the Department of Insurance (Insurance Fund).
2. Minor costs to review health plan filings and take enforcement actions, as necessary, by the Department of Managed Health Care (Managed Care Fund).
3. Ongoing costs of about $200,000 per year for increased utilization of covered TOPs by Medi-Cal beneficiaries (General Fund and federal funds). The California Health Benefits Review Program analyzed a prior version of this bill that would have required early refills at 70% of predicted use days. Based on the current version of this bill, which requires early refills at 76% - 77% of predicted days, the costs to the Medi-Cal program are likely to be about one-half of the previously projected costs.
4. Minor costs to the California Public Employees' Retirement System due to increased prescription drug benefit costs (various funds). Similar to the costs projected for the Medi-Cal program, the costs of this bill are likely to be about one-half of the previously projected costs.
5. No state cost to subsidize health care coverage through Covered California is anticipated. Under federal law, any new mandated health benefit that exceeds the benefits in the state's essential health benefits benchmark plan would be a state responsibility. In other words, to the extent that the state imposes a new benefit mandate that exceeds the essential health benefits benchmark, the state would be responsible for paying for the cost to subsidize that benefit for those individuals who are receiving subsidized coverage through Covered California. Because this bill does not mandate a new benefit, but only change the terms of an existing benefit (prescription drugs), this bill is not expected to result in the state being responsible for subsidizing coverage.

COMMENTS: According to the author, poor medication adherence is a major barrier to achieving better patient outcomes. TOPS are used to treat a variety of conditions including: uveitis, conjunctivitis, dry eye, and glaucoma. Successful and effective treatment for these eye-related conditions requires proper administration of the medication. Eye drops can be difficult to self-administer; a shaky hand can cause drops to hit the patient's cheeks or make two eye drops come out at once. This unavoidable waste is one reason that some patients run out of their eye drops too soon. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, including irreversible vision loss. Glaucoma patients are often elderly and have difficulty dispensing the appropriate amount of eye drops, thereby requiring early refills of their medication.

A study on glaucoma treatment adherence cited an inadequate amount of medication available between scheduled prescription refills as a central barrier to patient compliance. By allowing early refill for users of TOPs, patients are able to manage the disease and prevent interruptions in drug therapy that can potentially have serious consequences.

In 2010, the Centers for Medicare and Medicaid Services (CMS) re-issued guidance on "Early Refill Edits on TOPs." The reissuance was based on complaints CMS had received regarding the application of early refill edits (i.e. refill-too-soon edits) to TOPs. In the guidance, CMS recommended that Medicare drug plans permit refills at 70% of the predicted days of use and permit physicians to authorize earlier refills for particular beneficiaries who continue to have difficulty with inadvertent wastage.

GOVERNOR'S VETO MESSAGE:

I am returning Assembly Bill 1831 without my signature.

This bill requires health plans and insurance policies to pay for early refills of medicated eye drops.

Applying eye drops is sometimes difficult and imprecise. However, in most instances of spillage or loss, health plans or pharmacists provide an early refill to those who need it. Moreover, new mandates, even small ones, add to the high cost of health care.

Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0005103

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1831

Author:(Low)

As Amended Ver:August 15, 2016

Majority vote

Original Committee Reference: HEALTH

SUMMARY: Requires health care service plans (health plans) and health insurers to provide coverage for early refills of prescription topical ophthalmic products (TOPs).

The Senate amendments:

1. Add language delaying implementation until July 1, 2017.
2. Delete language allowing for early refills of TOPs at 70% of the predicted days of use.
3. Add language specifying standards for early refills of TOPs:
   1. For a 30-day supply, at least 23 days and less than 30 days from the later of either of the following:
      1. The original date that the prescription was distributed to the enrollee or insured; or,
      2. The date of the most recent refill that was distributed to the enrollee or insured.
   2. For a 90-day supply, at least 68 days and less than 90 days from the later of either of the following:
      1. The original date that the prescription was distributed to the enrollee or insured; or,
      2. The date of the most recent refill that was distributed to the enrollee or insured.
4. Add language prohibiting an enrollee or insured's refill request from exceeding the number of additional quantities prescribed by the enrollee or insured’s participating health plan or health insurer provider.
5. Add language specifying that this bill does not prevent a health plan contract or health policy from allowing for early refills at or below 75% of the predicted days of use.

FISCAL EFFECT: According to the Senate Appropriations Committee,

1. Minor costs to review health insurer filings and take enforcement actions, as necessary, by the Department of Insurance (Insurance Fund).
2. Minor costs to review health plan filings and take enforcement actions, as necessary, by the Department of Managed Health Care (Managed Care Fund).
3. Ongoing costs of about $200,000 per year for increased utilization of covered TOPs by Medi-Cal beneficiaries (General Fund and federal funds). The California Health Benefits Review Program analyzed a prior version of this bill that would have required early refills at 70% of predicted use days. Based on the current version of this bill, which requires early refills at 76% - 77% of predicted days, the costs to the Medi-Cal program are likely to be about one-half of the previously projected costs.
4. Minor costs to the California Public Employees' Retirement System due to increased prescription drug benefit costs (various funds). Similar to the costs projected for the Medi-Cal program, the costs of this bill are likely to be about one-half of the previously projected costs.
5. No state cost to subsidize health care coverage through Covered California is anticipated. Under federal law, any new mandated health benefit that exceeds the benefits in the state's essential health benefits benchmark plan would be a state responsibility. In other words, to the extent that the state imposes a new benefit mandate that exceeds the essential health benefits benchmark, the state would be responsible for paying for the cost to subsidize that benefit for those individuals who are receiving subsidized coverage through Covered California. Because this bill does not mandate a new benefit, but only change the terms of an existing benefit (prescription drugs), this bill is not expected to result in the state being responsible for subsidizing coverage.

COMMENTS: According to the author, poor medication adherence is a major barrier to achieving better patient outcomes. TOPS are used to treat a variety of conditions including: uveitis, conjunctivitis, dry eye, and glaucoma. Successful and effective treatment for these eye-related conditions requires proper administration of the medication. Eye drops can be difficult to self-administer; a shaky hand can cause drops to hit the patient’s cheeks or make two eye drops come out at once. This unavoidable waste is one reason that some patients run out of their eye drops too soon. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, including irreversible vision loss. Glaucoma patients are often elderly and have difficulty dispensing the appropriate amount of eye drops, thereby requiring early refills of their medication.

When patients run out of eye drops before the scheduled refill, they may have to pay the full cost of the prescription. But when faced with the option of paying full price for the prescription or waiting until the scheduled refill date, many choose to go without the medication for a week or more instead of paying out of pocket. A study on glaucoma treatment adherence cited an inadequate amount of medication available between scheduled prescription refills as a central barrier to patient compliance. By allowing early refill for users of TOPs, patients are able to manage the disease and prevent interruptions in drug therapy that can potentially have serious consequences.

In 2010, the Centers for Medicare and Medicaid Services (CMS) re-issued guidance on "Early Refill Edits on TOPs." The reissuance was based on complaints CMS had received regarding the application of early refill edits (i.e. refill-too-soon edits) to TOPs. In the guidance, CMS recommended that Medicare drug plans permit refills at 70% of the predicted days of use and permit physicians to authorize earlier refills for particular beneficiaries who continue to have difficulty with inadvertent wastage.

Analysis Prepared by: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0004178

 THIRD READING  

Bill No: AB 1831

Author: Low (D)

Amended: 8/15/16 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 9-0, 6/22/16

AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen, Pan, Roth, Wolk

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 71-8, 6/1/16 - See last page for vote

SUBJECT: Health care coverage: prescription drugs: refills

SOURCE: California Academy of Eye Physicians and Surgeons

California Optometric Association

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­__________________________________________________________________

DIGEST: This bill requires a health plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017 that provides coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products, as specified.

ANALYSIS:

Existing law:

1. Regulates health plans by the Department of Managed Health Care (DMHC) and health insurers by the California Department of Insurance (CDI). Establishes the Department of Health Care Services to administer the Medi-Cal program.
   
2. Requires health plans and health insurers that cover prescription drug benefits to provide notice in the evidence of coverage and disclosure form to enrollees/insureds regarding whether the plan uses a formulary.
   
3. Mandates the ten federally required Essential Health Benefits (EHBs) including prescription drug coverage and establishes Kaiser Small Group health plan as California’s EHB benchmark plan for non-grandfathered individual and small group health plan contracts and insurance policies.
   

This bill:

1. Requires a health plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017 that provides coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products (TOPs) according to the following standards:
   1. For a 30-day supply, at least 23 days and less than 30 days from the later of either the original date that the prescription was distributed to the enrollee, or the date of the most recent refill that was distributed to the enrollee;
   2. For a 90-day supply, at least 68 days and less than 90 days from the later of either the original date that the prescription was distributed to the enrollee or the date of the most recent refill that was disturbed to the enrollee; and,
   3. The refills requested by the enrollee not exceed the number of additional quantities prescribed by the enrollee’s participating health plan provider.
      
2. Prohibits anything in this bill from being construed to prevent a plan or insurer from allowing early refills at or below 75% of the predicted days of use, establish a new mandated benefit or to prevent the application of deductible or copayment provisions in a plan contract.

Comments

1. Author’s statement. According to the author, TOPs are used to treat a wide array of acute and chronic conditions, such as glaucoma and conjunctivitis. Patients often have difficulty self-administering the appropriate amount of eye drops, thereby requiring early refills of their medication. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, like irreversible vision loss. Thus, AB 1831 seeks to provide better patient outcomes by improving a patient’s ability to adhere to medication dispensing requirements. Moreover, this bill aligns state law with federal Medicare guidelines as it relates to refill standards for topical ophthalmic products.
2. California Health Benefits Review Program (CHBRP) analysis. AB 1996 (Thomson, Chapter 795, Statutes of 2002), requested the University of California to assess legislation proposing a mandated benefit or service and prepare a written analysis with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. CHBRP was created in response to AB 1996. Below are key findings of CHBRP’s analysis.

TOPs are a class of drugs that include eye drops and ointments that are used to treat multiple eye diseases and conditions. TOPs can be prescribed for both acute and chronic conditions. Chronic eye conditions would include diseases with long-term treatments, lasting months, years, or the rest of patients’ lives. AB 1831 would most likely affect a subset of patients who require multiple refills of TOPs to treat chronic diseases.

Studies using pharmacy claims data have shown that up to 90% of glaucoma patients do not refill their TOP medication consistently (i.e., in a way that would permit continuous availability of TOPs) and that approximately 25% of patients may be without eye drops an average of 109 days per year (Gurwitz et al., 1998; Nordstrom et al., 2005; Quigley and Broman, 2006). However, these studies could not clarify the reasons or consequences of refill inconsistency, such as if this is due to behavioral factors or issues with obtaining a refill, or if patients’ vision was deteriorating as a result. Specific to the issue of running out of TOP medication, 25% of a sample of glaucoma patients reported experiencing any early exhaustion of eye drop bottles (i.e., running out of eye drops before they were due to be refilled), with 5% reporting early bottle exhaustion five or more times a year (Moore et al., 2014). Poor vision was a risk factor for early exhaustion among those who run out at least five times per year. The top reasons patients cited for early TOP exhaustion were that more than one drop came out (31%), there was an insufficient amount in the bottle (18%), or the drop size was too large or inconsistent (18%) (Moore et al., 2014).

• 1. Enrollees. CHBRP estimates that in 2017, 25.2 million Californians will have health insurance that would be subject to AB 1831.
  2. Impact on expenditures. An increase of 0.0007% or $955,000 (premiums and cost sharing) would occur.
  3. EHBs. The mandate would alter the terms but not require new benefit coverage and so would not exceed EHBs.
  4. Medical effectiveness. There is insufficient evidence to suggest that the limited number of additional days of adherence made possible by AB 1831 would measurably impact the effectiveness of treatment or related health outcomes.
  5. Benefit coverage. The terms of coverage for 85% of enrollees would change, where coverage had been available for TOPs refills at and after 75% to 85% of projected use, refills would be covered at 70% of projected use.
  6. Utilization. Due to earlier refills, annual utilization of TOPs would increase by 0.5%.
  7. Public health. Due to insufficient medical effectiveness evidence and unlikely impact on adherence despite very limited increases in filled prescriptions, the public health impact on health outcomes, gender or racial/ethnic disparities, and premature death in the first year, post-mandate, is unknown. CHBRP notes that the absence of evidence is not evidence of no effect. It is possible that an impact, positive or negative, could result, but current evidence is insufficient to inform an estimate.
     

1. Other states and Medicare. According to CHBRP, there are laws relevant to coverage for early refills for TOPs in a number of other states, including AK, CT, KY, MO, NJ, NY, OR, RI, and WY.
   
2. Medicare Part D. On June 2, 2010 the Centers for Medicare & Medicaid Services (CMS) released the following guidance to Medicare Part D sponsors related to TOPs. “CMS is re-issuing this guidance based on complaints we have received regarding the application of early refill edits (i.e. refill-too-soon edits) to TOPs. CMS recognizes that early refill edits are an important utilization management tool used to promote compliance and prevent waste. However, it is equally important that Part D sponsors implement such edits in a manner that does not unreasonably put beneficiaries at risk of interruptions in drug therapy that potentially have serious consequences. Part D sponsors need to take into consideration differences that some dosage forms, such as topical ophthalmics, present when establishing early refill edits. Edits based on an algorithm that is appropriate for tablets and capsules are not necessarily appropriate for other dosage forms for which administration is not as easily measured and controlled. This is not to say that Part D sponsors should not implement early refill edits for such medications, especially given that these edits can identify inappropriate use, but it does mean that such edits need to reasonably accommodate waste that can be anticipated given the nature of these products and their self-administration among the Medicare patient population. Part D sponsors also should be prepared to allow overrides of these edits on a case-by-case basis when appropriate and necessary to prevent unintended interruptions in drug therapy.”
   

Related/Prior Legislation

AB 2418 (Bonilla of 2014), would have required health plan contracts and health insurance policies to allow for the synchronization of prescription refills, and permit refill of topical ophthalmic medications at 70% of the predicted days of use, effective January 1, 2016. AB 2418 was vetoed by the Governor. The Governor’s veto message included the following:

The bill would require health plans and insurers to apply a prorated daily cost-sharing rate to the refills of certain medications if the prescriber or pharmacist indicates it is in the best interest of the patient and it is for the purpose of synchronizing refill dates for the patient's medications. The bill also allows for early refills of covered eye products. While I understand the importance of encouraging people to take their prescribed medications, the bill lacks explicit patient consent before changes are made to refills; nor does the bill speak to the supportive elements that have made synchronization programs anecdotally successful. Medication adherence is complicated. Solutions to this problem will likely require a more holistic approach and collaboration between doctors, patients, pharmacists and health plans.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

1. Minor costs to review health insurer filings and take enforcement actions, as necessary, by CDI (Insurance Fund).
2. Minor costs to review health plan filings and take enforcement actions, as necessary, by DMHC (Managed Care Fund).
3. Ongoing costs of about $200,000 per year for increased utilization of covered TOPs by Medi-Cal beneficiaries (General Fund and federal funds). CHBRP analyzed a prior version of the bill that would have required early refills at 70% of predicted use days. Based on the current version of the bill, which requires early refills at 76% - 77% of predicted days, the costs to the Medi-Cal program are likely to be about one-half of the previously projected costs.
4. Minor costs to the CalPERS due to increased prescription drug benefit costs (various funds). Similar to the costs projected for the Medi-Cal program, the costs of the current bill are likely to be about one-half of the previously projected costs.
5. No state cost to subsidize health care coverage through Covered California is anticipated. Under federal law, any new mandated health benefit that exceeds the benefits in the state’s essential health benefits benchmark plan would be a state responsibility. In other words, to the extent that the state imposes a new benefit mandate that exceeds the essential health benefits benchmark, the state would be responsible for paying for the cost to subsidize that benefit for those individuals who are receiving subsidized coverage through Covered California. Because this bill does not mandate a new benefit, but only change the terms of an existing benefit (prescription drugs), the bill is not expected to result in the state being responsible for subsidizing coverage.

SUPPORT: (Verified 8/12/16)

California Academy of Eye Physicians and Surgeons

California Optometric Association

American Federation of State, county and Municipal Employees

California Life Sciences Association

California Pharmacists Association

Community Health Partnership

Congress of California Seniors

Health Access California

Roots Community Health Center

Several Individuals

OPPOSITION: (Verified 8/12/16)

Department of Health Care Services

ARGUMENTS IN SUPPORT: The California Academy of Eye Physicians writes this legislation is in patient’s best interests, particularly for anti-glaucoma and antibiotic agents that can be viewed as site saving. The California Optometric Association writes that CMS stressed the necessity for early refills to prevent interruptions in drug therapy that potentially have serious consequences. According to the California Life Sciences Association TOPs, such as eye drops, can be difficult to apply and it is often common for patients to waste or use more eye drops than necessary when drops hit their cheeks or two eye drops come out at once. They are used to treat a variety of conditions including glaucoma, conjunctivitis, among others. Diseases like glaucoma, when inadequately treated or untreated, can result in irreversible vision impairment and blindness. The Community Health Partnership writes that when a patient runs out of eye drops, a patient may have to pay the full cost of the prescription if he or she runs out of eye drops before the scheduled refill. When faced with the option of paying full price for the prescription or waiting until the scheduled refill date, many low-income patients may choose to go without the medication for weeks instead of paying out of pocket. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, including irreversible vision loss.

ARGUMENTS IN OPPOSITION: The Department of Health Care Services (DHCS) opposes this bill because it places a mandate on Medi-Cal managed care plans and it could unnecessarily increase utilization and medication misuse. DHCS also believes an override process already allows for a pharmacist to provide early refills, if necessary.

ASSEMBLY FLOOR: 71-8, 6/1/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NOES: Bigelow, Beth Gaines, Grove, Harper, Roger Hernández, Melendez, Obernolte, Patterson

NO VOTE RECORDED: Chu

Prepared by: Teri Boughton / HEALTH / (916) 651-4111

8/15/16 19:36:07

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1831 (Low) - Health care coverage: prescription drugs: refills

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 11, 2016

Bill Summary:

AB 1831 would require health insurers and health plans to provide coverage for early refills of prescription topical ophthalmic products (eye drops).

Fiscal Impact:

• Minor costs to review health insurer filings and take enforcement actions, as necessary, by the Department of Insurance (Insurance Fund).
• Minor costs to review health plan filings and take enforcement actions, as necessary, by the Department of Managed Health Care (Managed Care Fund).
• Ongoing costs of about $200,000 per year for increased utilization of covered topical ophthalmic products by Medi-Cal beneficiaries (General Fund and federal funds). The California Health Benefits Review Program analyzed a prior version of the bill that would have required early refills at 70% of predicted use days. Based on the current version of the bill, which requires early refills at 76% - 77% of predicted days, the costs to the Medi-Cal program are likely to be about one-half of the previously projected costs.
• Minor costs to the CalPERS due to increased prescription drug benefit costs (various funds). Similar to the costs projected for the Medi-Cal program, the costs of the current bill are likely to be about one-half of the previously projected costs.
• No state cost to subsidize health care coverage through Covered California is anticipated. Under federal law, any new mandated health benefit that exceeds the benefits in the state’s essential health benefits benchmark plan would be a state responsibility. In other words, to the extent that the state imposes a new benefit mandate that exceeds the essential health benefits benchmark, the state would be responsible for paying for the cost to subsidize that benefit for those individuals who are receiving subsidized coverage through Covered California. Because this bill does not mandate a new benefit, but only change the terms of an existing benefit (prescription drugs), the bill is not expected to result in the state being responsible for subsidizing coverage.

Author Amendments:

Make a clarifying change.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1831 (Low) - Health care coverage: prescription drugs: refills

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1831 would require health insurers and health plans to provide coverage for early refills of prescription topical ophthalmic products (prescription eye drops).

Fiscal Impact:

• Minor costs to review health insurer filings and take enforcement actions, as necessary, by the Department of Insurance (Insurance Fund).
• Minor costs to review health plan filings and take enforcement actions, as necessary, by the Department of Managed Health Care (Managed Care Fund).
• Ongoing costs of about $200,000 per year for increased utilization of covered topical ophthalmic products by Medi-Cal beneficiaries (General Fund and federal funds). The California Health Benefits Review Program analyzed a prior version of the bill that would have required early refills at 70% of predicted use days. Based on the current version of the bill, which requires early refills at 76% - 77% of predicted days, the costs to the Medi-Cal program are likely to be about one-half of the previously projected costs.
• Minor costs to the CalPERS due to increased prescription drug benefit costs (various funds). Similar to the costs projected for the Medi-Cal program, the costs of the current bill are likely to be about one-half of the previously projected costs.
• No state cost to subsidize health care coverage through Covered California is anticipated. Under federal law, any new mandated health benefit that exceeds the benefits in the state’s essential health benefits benchmark plan would be a state responsibility. In other words, to the extent that the state imposes a new benefit mandate that exceeds the essential health benefits benchmark, the state would be responsible for paying for the cost to subsidize that benefit for those individuals who are receiving subsidized coverage through Covered California. Because this bill does not mandate a new benefit, but only change the terms of an existing benefit (prescription drugs), the bill is not expected to result in the state being responsible for subsidizing coverage.

Background:

Under current law, health insurers are regulated by the Department of Insurance and health plans are regulated by the Department of Managed Health Care.

The federal Affordable Care Act and implementing legislation enacted in California make a variety of changes to the individual and group health insurance market. Changes to the market include a requirement for “guaranteed issue” of coverage if premiums are paid, a prohibition on denials of coverage for preexisting conditions, and many other regulatory requirements. In addition, non-grandfathered plans are required to provide specified essential health benefits, including coverage of prescription drugs.

Topical ophthalmic products (prescription eye drops) are used to treat a variety of conditions of the eye, either acute conditions or chronic conditions. Unlike prescription drugs taken in pill form, a patient may have difficulty accurately dropping the required number of drops into one or both eyes. Therefore, there is a greater likelihood that accidentally putting too many drops into the eye or missing the eye will result in wastage of the product. In such cases, the patient may run out of the product before the next prescription refill is allowed. According or information included in the California Health Benefits Review Program analysis of this bill, the published literature indicates that 25% of sampled glaucoma patients report experiencing early exhaustion of their ophthalmic product and 5% report early exhaustion five or more times per year.

Proposed Law:

AB 1831 would require health insurers and health plans to provide coverage for early refills of prescription topical ophthalmic products.

Specific provisions of the bill would:

• Require a health plan contract or health insurance contract issued or renewed after July 1, 2017 that provides prescription drug coverage to allow early refills of topical ophthalmic products;
• For a 30-day supply, allow an early refill at least 23 days from the original prescription or latest refill (77% of expected days);
• For a 90-day supply, allow an early refill at least 68 days from the original prescription or latest refill (76% of expected days);
• Prohibit a requested early refill from exceeding the additional quantities prescribed by the provider (e.g. the allowed refills on the prescription);
• Specify that the bill does not prevent a health insurer or health plan from allowing early refills at 70% of expected days;
• Specify that the bill shall not be construed to establish a new benefit mandate or prevent the application of a deductible or copayment.

Related Legislation:

AB 2418 (Bonilla, 2014) included language similar to the contents of this bill, amongst other benefit mandate requirements. That bill was vetoed by Governor Brown. However, the Governor’s veto message did not reference the portions of AB 2418 that are included in this bill.

Staff Comments:

According to the California Health Benefits Review Program, the bill is likely to improve adherence amongst patients who are generally adherent to their medical advice, but who face a gap in use due to wastage of their existing prescription. The Program found that there is not sufficient evidence to determine whether the modest increase in medical adherence possible with early refills would measurably impact the effectiveness of treatments.

The only costs that may be incurred by a local agency relate to crimes and infractions. Under the California Constitution, such costs are not reimbursable by the state.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Ed Hernandez, O.D., Chair

BILL NO: AB 1831

SUBJECT: Health care coverage: prescription drugs: refills

SUMMARY:

1. Requires a health plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017 that provides coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products, as specified.

Existing law:

1. Regulates health plans by the Department of Managed Health Care (DMHC) and health insurers by the California Department of Insurance (CDI). Establishes the Department of Health Care Services to administer the Medi-Cal program.
   
2. Requires health plans and health insurers that cover prescription drug benefits to provide notice in the evidence of coverage and disclosure form to enrollees/insureds regarding whether the plan uses a formulary.
   
3. Mandates the ten federally required Essential Health Benefits (EHBs) including prescription drug coverage and establishes Kaiser Small Group health plan as California’s EHB benchmark plan for non-grandfathered individual and small group health plan contracts and insurance policies.
   

This bill:

1. Requires a health plan contract or health insurance policy issued, amended, or renewed on or after July 1, 2017 that provides coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products (TOPs) according to the following standards:
   1. For a 30-day supply, at least 23 days and less than 30 days from the later of either the original date that the prescription was distributed to the enrollee, or the date of the most recent refill that was distributed to the enrollee;
   2. For a 90-day supply, at least 68 days and less than 90 days from the later of either the original date that the prescription was distributed to the enrollee or the date of the most recent refill that was disturbed to the enrollee; and,
   3. The refills requested by the enrollee not exceed the number of additional quantities prescribed by the enrollee’s participating health plan provider.
      
2. Prohibits anything in this bill from being construed to establish a new mandated benefit or to prevent the application of deductible or copayment provisions in a plan contract.

FISCAL EFFECT:

According to the Assembly Appropriations Committee:

1. According to the California Health Benefits Review Program (CHBRP):
   1. Costs of $360,000 to Medi-Cal (General Fund/federal) and $4,000 to the California Public Employees' Retirement System for increased premiums.
   2. Increased employer-funded premium costs in the private insurance market of approximately $260,000.
   3. Increased premium expenditures by employees and individuals purchasing insurance of $200,000, and increased out-of-pocket expenses of $110,000.
2. Minor costs to CDI (Insurance Fund) and DMHC (Managed Care Fund) to verify plans and insurers comply with this requirement.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, TOPs are used to treat a wide array of acute and chronic conditions, such as glaucoma and conjunctivitis. Patients often have difficulty self-administering the appropriate amount of eye drops, thereby requiring early refills of their medication. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, like irreversible vision loss. Thus, AB 1831 seeks to provide better patient outcomes by improving a patient’s ability to adhere to medication dispensing requirements. Moreover, this bill aligns state law with federal Medicare guidelines as it relates to refill standards for topical ophthalmic products.
2. CHBRP analysis. AB 1996 (Thomson, Chapter 795, Statutes of 2002), requests the University of California to assess legislation proposing a mandated benefit or service and prepare a written analysis with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. CHBRP was created in response to AB 1996. Below are key findings of CHBRP’s analysis.

TOPs are a class of drugs that include eye drops and ointments that are used to treat multiple eye diseases and conditions. TOPs can be prescribed for both acute and chronic conditions. Chronic eye conditions would include diseases with long-term treatments, lasting months, years, or the rest of patients’ lives. AB 1831 would most likely affect a subset of patients who require multiple refills of TOPs to treat chronic diseases.

Studies using pharmacy claims data have shown that up to 90% of glaucoma patients do not refill their TOP medication consistently (i.e., in a way that would permit continuous availability of TOPs) and that approximately 25% of patients may be without eye drops an average of 109 days per year (Gurwitz et al., 1998; Nordstrom et al., 2005; Quigley and Broman, 2006). However, these studies could not clarify the reasons or consequences of refill inconsistency, such as if this is due to behavioral factors or issues with obtaining a refill, or if patients’ vision was deteriorating as a result. Specific to the issue of running out of TOP medication, 25% of a sample of glaucoma patients reported experiencing any early exhaustion of eye drop bottles (i.e., running out of eye drops before they were due to be refilled), with 5% reporting early bottle exhaustion five or more times a year (Moore et al., 2014). Poor vision was a risk factor for early exhaustion among those who run out at least five times per year. The top reasons patients cited for early TOP exhaustion were that more than one drop came out (31%), there was an insufficient amount in the bottle (18%), or the drop size was too large or inconsistent (18%) (Moore et al., 2014).

• 1. Enrollees. CHBRP estimates that in 2017, 25.2 million Californians will have health insurance that would be subject to AB 1831.
  2. Impact on expenditures. An increase of 0.0007% or $955,000 (premiums and cost sharing) would occur.
  3. EHBs. The mandate would alter the terms but not require new benefit coverage and so would not exceed EHBs.
  4. Medical effectiveness. There is insufficient evidence to suggest that the limited number of additional days of adherence made possible by AB 1831 would measurably impact the effectiveness of treatment or related health outcomes.
  5. Benefit coverage. The terms of coverage for 85% of enrollees would change, where coverage had been available for TOPs refills at and after 75% to 85% of projected use, refills would be covered at 70% of projected use.
  6. Utilization. Due to earlier refills, annual utilization of TOPs would increase by 0.5%.
  7. Public health. Due to insufficient medical effectiveness evidence and unlikely impact on adherence despite very limited increases in filled prescriptions, the public health impact on health outcomes, gender or racial/ethnic disparities, and premature death in the first year, post-mandate, is unknown. CHBRP notes that the absence of evidence is not evidence of no effect. It is possible that an impact, positive or negative, could result, but current evidence is insufficient to inform an estimate.
     

1. Other states and Medicare. According to CHBRP, there are laws relevant to coverage for early refills for TOPs in a number of other states, including AK, CT, KY, MO, NJ, NY, OR, RI, and WY.
   
2. Medicare Part D. On June 2, 2010 the Centers for Medicare & Medicaid Services (CMS) released the following guidance to Medicare Part D sponsors related to TOPs. “CMS is re-issuing this guidance based on complaints we have received regarding the application of early refill edits (i.e. refill-too-soon edits) to TOPs. CMS recognizes that early refill edits are an important utilization management tool used to promote compliance and prevent waste. However, it is equally important that Part D sponsors implement such edits in a manner that does not unreasonably put beneficiaries at risk of interruptions in drug therapy that potentially have serious consequences. Part D sponsors need to take into consideration differences that some dosage forms, such as topical ophthalmics, present when establishing early refill edits. Edits based on an algorithm that is appropriate for tablets and capsules are not necessarily appropriate for other dosage forms for which administration is not as easily measured and controlled. This is not to say that Part D sponsors should not implement early refill edits for such medications, especially given that these edits can identify inappropriate use, but it does mean that such edits need to reasonably accommodate waste that can be anticipated given the nature of these products and their self-administration among the Medicare patient population. Part D sponsors also should be prepared to allow overrides of these edits on a case-by-case basis when appropriate and necessary to prevent unintended interruptions in drug therapy.”
   
3. Related legislation. AB 2050 (Steinorth) would require health plans and health insurers to cover the synchronization of prescription drugs under specified circumstances. AB 2050 is pending in the Senate Health Committee.
   
4. Prior legislation. AB 2418 (Bonilla of 2014), would have required health plan contracts and health insurance policies to allow for the synchronization of prescription refills, and permit refill of topical ophthalmic medications at 70% of the predicted days of use, effective January 1, 2016. AB 2418 was vetoed by the Governor. The Governor’s veto message included the following: “The bill would require health plans and insurers to apply a prorated daily cost-sharing rate to the refills of certain medications if the prescriber or pharmacist indicates it is in the best interest of the patient and it is for the purpose of synchronizing refill dates for the patient's medications. The bill also allows for early refills of covered eye products. While I understand the importance of encouraging people to take their prescribed medications, the bill lacks explicit patient consent before changes are made to refills; nor does the bill speak to the supportive elements that have made synchronization programs anecdotally successful. Medication adherence is complicated. Solutions to this problem will likely require a more holistic approach and collaboration between doctors, patients, pharmacists and health plans.”
   
5. Support. The California Academy of Eye Physicians writes this legislation is in patient’s best interests, particularly for anti-glaucoma and antibiotic agents that can be viewed as site saving. The California Optometric Association writes that CMS stressed the necessity for early refills to prevent interruptions in drug therapy that potentially have serious consequences. According to the California Life Sciences Association TOPs, such as eye drops, can be difficult to apply and it is often common for patients to waste or use more eye drops than necessary when drops hit their cheeks or two eye drops come out at once. They are used to treat a variety of conditions including glaucoma, conjunctivitis, among others. Diseases like glaucoma, when inadequately treated or untreated, can result in irreversible vision impairment and blindness. The Community Health Partnership writes that when a patient runs out of eye drops, a patient may have to pay the full cost of the prescription if he or she runs out of eye drops before the scheduled refill. When faced with the option of paying full price for the prescription or waiting until the scheduled refill date, many low-income patients may choose to go without the medication for weeks instead of paying out of pocket. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, including irreversible vision loss.

SUPPORT AND OPPOSITION:

Support: California Academy of Eye Physicians and Surgeons (cosponsor)

California Optometric Association (cosponsor)

American Federation of State, county and Municipal Employees

California Life Sciences Association

California Pharmacists Association

Community Health Partnership

Congress of California Seniors

Health Access California

Roots Community Health Center

Several Individuals

Oppose: None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1831

Author:(Low)

As Introduced Ver:February 9, 2016

Majority vote

SUMMARY: Requires health care service plan contracts and health insurance policies issued, amended, or renewed on or after January 1, 2017, that provide coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products (TOPs) at 70% of the predicted days of use. States that nothing in this bill shall be construed to establish a new mandated benefit or to prevent the application of deductible or copayment provisions in a plan contract or insurance policy.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. According to the California Health Benefits Review Program:
   1. Costs of $360,000 to Medi-Cal (General Fund/federal) and $4,000 to the California Public Employees' Retirement System for increased premiums.
   2. Increased employer-funded premium costs in the private insurance market of approximately $260,000.
   3. Increased premium expenditures by employees and individuals purchasing insurance of $200,000, and increased out-of-pocket expenses of $110,000.
2. Minor costs to the California Department of Insurance (Insurance Fund) and the Department of Managed Health Care (Managed Care Fund) to verify plans and insurers comply with this requirement.

COMMENTS: According to the author, poor medication adherence is a major barrier to achieving better patient outcomes. TOPS are used to treat a variety of conditions including: uveitis, conjunctivitis, dry eye, and glaucoma. Successful and effective treatment for these eye-related conditions requires proper administration of the medication. Eye drops can be difficult to self-administer; a shaky hand can cause drops to hit the patient's cheeks or make two eye drops come out at once. This unavoidable waste is one reason that some patients run out of their eye drops too soon. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, including irreversible vision loss. Glaucoma patients are often elderly and have difficulty dispensing the appropriate amount of eye drops, thereby requiring early refills of their medication.

When patients run out of eye drops before the scheduled refill, they may have to pay the full cost of the prescription. But when faced with the option of paying full price for the prescription or waiting until the scheduled refill date, many choose to go without the medication for a week or more instead of paying out of pocket. A study on glaucoma treatment adherence cited an inadequate amount of medication available between scheduled prescription refills as a central barrier to patient compliance. By allowing early refill for users of TOPs, patients are able to manage the disease and prevent interruptions in drug therapy that can potentially have serious consequences.

In 2010, the Centers for Medicare and Medicaid Services (CMS) re-issued guidance on "Early Refill Edits on TOPs." The reissuance was based on complaints CMS had received regarding the application of early refill edits (i.e. refill-too-soon edits) to TOPs. In the guidance, CMS recommended that Medicare drug plans permit refills at 70% of the predicted days of use and permit physicians to authorize earlier refills for particular beneficiaries who continue to have difficulty with inadvertent wastage.

The California Academy of Eye Physicians and Surgeons, a cosponsor of this bill, states in support that this bill is in the patients' best interests, particularly for glaucoma and antibiotic agents that can be viewed as sight-saving. The California Optometric Association, also a cosponsor of this bill, notes that it is a common occurrence for patients to have drops hit their cheeks or to have two or more eye drops come out of the bottle at once when only one is needed. This unavoidable waste of drops is a major reason that some patients run out of their drops too soon.

The California Association of Health Plans argues in opposition that prescription eye drops are costly and there is no mechanism to verify if a patient's eye drops were lost or spilled The Association of California Health Insurance Companies and America's Health Insurance Plans oppose all mandate bills introduced this year because of possible state financial exposure, the need for a robust health insurance marketplace offering competition and choice, and the fact that mandates stifle the use of innovative, evidence-based medicine.

Analysis Prepared by: John Gilman / HEALTH / (916) 319-2097 FN: 0003215

Date of Hearing: May 4, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1831

Author:(Low) – As Introduced Ver:February 9, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires health plans and insurers that provide coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products (eye drops and ointments) at 70 percent of the predicted days of use.

FISCAL EFFECT:

1. According to the California Health Benefits Review Program (CHBRP):
   1. $360,000 to Medi-Cal (GF/federal) and $4,000 to CalPERS for increased premiums.
   2. Increased employer-funded premium costs in the private insurance market of approximately $260,000.
   3. Increased premium expenditures by employees and individuals purchasing insurance of $200,000, and increased out-of-pocket expenses of $110,000.
2. Minor costs to the California Department of Insurance (Insurance Fund) and the Department of Managed Health Care (Managed Care Fund) to verify plans and insurers comply with this requirement.

COMMENTS:

1. Purpose. This bill allows patients to refill their eye medications earlier than scheduled in order to ensure they have an adequate supply of prescribed drugs. This will promote adherence to medication and prevent the potential negative consequences of skipping doses. The author explains individuals often have difficulty administering eye drops and ointments in the proper quantities, leading to unavoidable waste.
2. Background. Eye drops and ointments are used to treat a variety of conditions, including conjunctivitis, dry eye, and glaucoma. Interruptions in drug therapy for some eye-related conditions would potentially have serious consequences, including irreversible vision loss. This bill aligns state law with federal Medicare guidelines as it relates to refill standards for eye drops and ointments, which was put into place based on complaints the Center for Medicare and Medicaid Services had received about the process for requesting early refills.
3. CHBRP Analysis. According to CHBRP, most plans allow for early refills, although at varying standards varying from 75-85%. CHBRP assumed that, on average, the possibility of earlier refill coverage would result in one additional refill per year among enrollees with a chronic condition and changed benefit coverage. CHBRP does not project a measurable public health or long-term impact, but notes that it stands to reason the requirement may help those who have the greatest need for the medication: those with severe chronic conditions resulting in diminishing visual acuity.
4. Essential Health Benefits (EHBs). Federal law requires the state to defray additional costs caused by any state mandates that exceed a set of federally defined EHBs. CHBRP does not believe this bill exceeds the federally defined EHBs; thus, there is no expected state fiscal liability related to this issue.
5. Support and Opposition. Health plans and insurers oppose this bill, citing the cumulative impact of mandates as well as difficulty operationalizing a "70% of fill" standard. This bill is co-sponsored by the California Academy of Eye Physicians and Surgeons and the California Optometric Association, and supported by several other groups including Health Access, AFSCME, and California Congress of Seniors.
6. Prior Legislation. AB 2418 (Bonilla) required health plans and insurers to allow for the synchronization of prescription refills, and also contained requirements similar to this bill. AB 2418 was vetoed by the Governor, who cited issues with the refill synchronization provisions of the bill. The veto message did not reference provisions related to eye drops and ointments.

Analysis Prepared by: Lisa Murawski / APPR. / (916) 319-2081

Date of Hearing: April 19, 2016

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1831

Author:(Low) – As Introduced Ver:February 9, 2016

SUBJECT: Health care coverage: prescription drugs: refills.

SUMMARY: Requires health plans and insurers to allow early refills of eye drops and ointments. Specifically, this bill:

1. Requires health care service plan contracts and health insurance policies issued, amended, or renewed on or after January 1, 2017, that provide coverage for prescription drug benefits to allow for early refills of covered topical ophthalmic products (TOPs) at 70% of the predicted days of use.
2. States that nothing in this bill shall be construed to establish a new mandated benefit or to prevent the application of deductible or copayment provisions in a plan contract or insurance policy.

EXISTING LAW:

1. Requires health care service plans to be regulated by the Department of Managed Health Care (DMHC) and health insurers to be regulated by the California Department of Insurance (CDI).
   
2. Requires health care plans and health insurers that cover prescription drug benefits to provide notice in the evidence of coverage and disclosure form to enrollees/insureds regarding whether the plan uses a formulary.
   
3. Mandates the 10 federally required Essential Health Benefits (EHBs) including prescription drug coverage and establishes Kaiser Small Group health plan as California’s EHB benchmark plan for non-grandfathered individual and small group health plan contracts and insurance policies.
   

FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, poor medication adherence is a major barrier to achieving better patient outcomes. TOPS are used to treat a variety of conditions including: uveitis, conjunctivitis, dry eye, and glaucoma. Successful and effective treatment for these eye-related conditions requires proper administration of the medication. Eye drops can be difficult to self-administer; a shaky hand can cause drops to hit the patient’s cheeks or make two eye drops come out at once. This unavoidable waste is one reason that some patients run out of their eye drops too soon. Interruptions in drug therapy for eye-related conditions potentially have serious consequences, including irreversible vision loss. Glaucoma patients are often elderly and have difficulty dispensing the appropriate amount of eye drops, thereby requiring early refills of their medication.
   
   When patients run out of eye drops before the scheduled refill, they may have to pay the full cost of the prescription. But when faced with the option of paying full price for the prescription or waiting until the scheduled refill date, many choose to go without the medication for a week or more instead of paying out of pocket. A study on glaucoma treatment adherence cited an inadequate amount of medication available between scheduled prescription refills as a central barrier to patient compliance. By allowing early refill for users of TOPs, patients are able to manage the disease and prevent interruptions in drug therapy that can potentially have serious consequences. This bill seeks to provide better patient outcomes by improving a patient’s ability to adhere to their prescribed medication regimen. Moreover, this bill aligns state law with federal Medicare guidelines as it relates to refill standards for TOPs.
2. California Health Benefits Review Program (CHBRP) analysis. AB 1996 (Thomson), Chapter 795, Statutes of 2002, requests the University of California to assess legislation proposing a mandated benefit or service and prepare a written analysis with relevant data on the medical, economic, and public health impacts of proposed health plan and health insurance benefit mandate legislation. CHBRP was created in response to AB 1996. SB 125 (Hernandez), Chapter 9, Statutes of 2015, added an impact assessment on EHBs, and legislation that impacts health insurance benefit designs, cost sharing, premiums, and other health insurance topics. Highlights of the CHBRP analysis are as follows.
   
   1. Background. TOPs, which include eye drops and ointments, are prescribed for both acute and chronic conditions, but this bill would most likely affect only patients who require multiple refills to treat chronic diseases and conditions, including ocular hypertension, glaucoma, uveitis, and chronic dry eye disease. TOPs are applied to the eyes as drops or small amounts of ointment. TOPs are not dispensed in a pre-set, quantifiable dose (such as a pill). Accidental over-use or wastage (too many drops at once or drops outside of the eye) can result in early exhaustion: exhaustion before the projected period of use for a bottle or tube of TOPs.
      
   2. Enrollees. CHBRP estimates that in 2017, 25.2 million Californians will have health insurance that would be subject to this bill. The terms of coverage for 85% of enrollees would change, where coverage had been available for TOPs refills at and after 75% to 85% of projected use, refills would be covered at 70% of projected use.
      
   3. Benefit Coverage, Utilization and Cost. Currently, 15% of enrollees have benefit coverage compliant with this bill. The remaining 85% of enrollees have coverage for TOPs refills at and after 75 to 85% of projected use. Although not all enrollees with affected health insurance would make use of the earlier refill coverage. This bill would require refill coverage for a 30-day TOPs prescription at or after day 21 (instead of at or after day 23 or day 26). CHBRP expects that, on average, the post-mandate possibility of earlier refill coverage would result in one additional refill per year among enrollees with a chronic condition and changed benefit coverage. This bill would be expected to increase total expenditures (premiums and cost sharing) by 0.0007% in the 12 months following implementation of the mandate. On a per member per month basis, CHBRP estimates that Medi-Cal Managed Care premiums would increase by $0.0045. For all other plans the increase would be less than $0.003.
      
   4. EHBs. A number of Patient Protection and Affordable Care Act (ACA) provisions have the potential to interact with state benefit mandates. However, because this bill specifies terms of existing benefit coverage, it appears it would not exceed EHBs, and so would not trigger the ACA requirement that the state defray the cost of additional benefit coverage for enrollees in qualified health plans in Covered California.
      
   5. Medical Effectiveness and Public Health Impacts. Along with accidental overuse and wastage, systematic adherence to a treatment regimen contributes to early bottle exhaustion. Therefore, this bill is mostly likely to improve adherence among typically adherent patients. There is insufficient evidence to suggest that the limited number of additional days (often as few as one to three days) of adherence made possible by this bill would measurably impact the effectiveness of treatment. For this reason, CHBRP does not project a measurable impact on the population’s health outcomes within the first year of the bill’s passage into law. Please note that the absence of evidence is not evidence of no effect. It is possible that an impact (positive or negative) could result, but current evidence is insufficient to inform an estimate. It stands to reason, however, that the reduction in the allowable refill threshold may help those who have the greatest need for the medication; those with severe chronic conditions resulting in diminishing visual acuity.
      
   6. Long-Term Impacts. As is the case for the first year, there is insufficient evidence to suggest that the limited number of additional days of adherence made possible by this bill would measurably impact health outcomes in the years following the bill’s passage into law. However, the average age of Californians has been increasing, and is expected to continue to do so. Resulting increases in age-related chronic eye conditions may lead to greater use of TOPs and so to greater use of the earlier refills that this bill would require.
      
3. MEDICARE. On June 2, 2010, the Centers for Medicare and Medicaid Services (CMS) re-issued guidance on “Early Refill Edits on TOPs.” The reissuance was based on complaints CMS had received regarding the application of early refill edits (i.e. refill-too-soon edits) to TOPs. In the guidance, CMS stated:
   

To assist Part D sponsors in determining proper edits to protect beneficiary access CMS recommends that sponsors allow the following for TOPs:

• 1. Permit refills at 70% of the predicted days of use. By way of an example, for a prescribed medication with an expected duration of 30 days of use, the refills would be permitted at day 21;
  2. Ensure that the refill allowances are the same regardless of purchase through retail or mail-order sources; and,
  3. Permit physicians to authorize earlier refills than 70% days of use for particular beneficiaries who continue to have difficulty with inadvertent wastage.
     

1. STATEMENT OF OPHTHALMOLOGY PROFESSIONAL SOCIETIES. In January 2014, the American Academy of Ophthalmology and the American Glaucoma Society issued a joint statement on glaucoma eye drop restrictions. The statement’s conclusions include the following:
   
   1. Eye drops are difficult to administer by over 2/3 of patients with many having trouble accurately administering a single drop onto their eyes;
      
   2. Chronic medical therapy of glaucoma is a critical and cost-effective first line of treatment. Gaps in the treatment of glaucoma can lead to vision loss, blindness, and an increased likelihood of surgical intervention for their disease. Surgical intervention carries far greater risk than chronic medical therapy and increases health care costs. Vision loss from glaucoma has been associated with an increase in the rates of falls, depression, difficulty with facial recognition, inability to drive, reading difficulty, reduced physical activity, and nursing home admissions;
      
   3. The current monthly volumes of eye drops allowed by health plans are often inadequate due to common and inadvertent wastage of drops when eye drops are applied. Often this leads to patients either stretching out their eye drop prescription (e.g., taking a twice daily medication once a day) or discontinuing the use of eye drops until the next allowable refill under their drug plan; creating a gap in care where the patient’s disease may worsen;
      
   4. Even in experienced glaucoma patients who self-administer their eye drops, between 53–61% regularly administer more than one drop at a time, many without even realizing it. These numbers are increased in those with poor vision from glaucoma, cataract, or retinal diseases. Eighty percent of these patients with visual comorbidities are unable to adequately instill a single eye drop at a time; and,
      
   5. Physical disabilities, such as arthritis and tremor, can also interfere with the administration of eye drops. It is particularly difficult for older patients to master and perform this task proficiently. Eye drop administration requires both the technical ability to easily squeeze out a single drop and the hand-eye coordination to find the eye and squeeze the drop onto the eye.
      
2. SUPPORT. The California Academy of Eye Physicians and Surgeons (CAEPS), a cosponsor of this bill, states in support that this bill is in the patients' best interests, particularly for glaucoma and antibiotic agents that can be viewed as sight-saving. Running out of drops early is particularly common in the elderly who may have difficulty self-administering medications. While some plans allow early refill, this bill would create a uniform requirement. CAEPS notes this bill's current provisions are identical to those contained in AB 2418 (Bonilla and Skinner) of 2014 which passed the Legislature but was vetoed by the Governor because of apparent concerns with other provisions of that bill that were not related to TOPs. The California Optometric Association (COA), also a cosponsor of this bill, argues that TOPS are used to treat a wide array of acute and chronic conditions, such as glaucoma and conjunctivitis. Glaucoma patients are often elderly and have difficulty dispensing the appropriate amount of eye drops, thereby requiring early refills of their medication. It is a common occurrence for patients to have drops hit their cheeks or to have two or more eye drops come out of the bottle at once when only one is needed. This unavoidable waste of drops is a major reason that some patients run out of their drops too soon.
   
3. OPPOSITION. The California Association of Health Plans (CAHP) argues that prescription eye drops are costly and there is no mechanism to verify if a patient’s eye drops were lost or spilled. Allowing early refills without conditions attached could lead to improper usage and potential abuse. Allowing the refill to be filled at a certain number of days would be easier to track. CAHP also argues that potential state fiscal exposure, elimination of risk management programs under the ACA and consumer price sensitivity make this a particularly bad time to pass additional benefit mandates. The Association of California Health Insurance Companies and America’s Health Insurance Plans oppose all mandate bills introduced this year because of possible state financial exposure, the need for a robust health insurance marketplace offering competition and choice, and the fact that mandates stifle the use of innovative, evidence-based medicine.
   
4. PREVIOUS LEGISLATION. AB 2418 would have required health plan contracts and health insurance policies to allow for the synchronization of prescription refills, and to permit refill of TOPs at 70% of the predicted days of use. AB 2418 was vetoed by the Governor.
   

REGISTERED SUPPORT / OPPOSITION:

Support

California Academy of Eye Physicians and Surgeons (cosponsor)

California Optometric Association (cosponsor)

American Federation of State, County and Municipal Employees, AFL-CIO

California Congress of Seniors

Health Access California

Several individuals

Opposition

America’s Health Insurance Plans

Association of California Health Insurance Companies

California Association of Health Plans

Analysis Prepared by: John Gilman / HEALTH / (916) 319-2097