SB 282: Health care coverage: prescription drugs.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Commonly referred to as utilization review, existing law governs the procedures that apply to every health care service plan and health insurer that prospectively, retrospectively, or concurrently reviews and approves, modifies, delays, or denies, based on medical necessity, requests by providers prior to, retrospectively, or concurrent with, the provision of health care services to enrollees or insureds, as specified.

Existing law requires the Department of Managed Health Care and the Department of Insurance to jointly develop a uniform prior authorization form for prescription drug benefits on or before July 1, 2012, and requires, 6 months after the form is developed, every prescribing provider, when requesting prior authorization for prescription drug benefits, to submit the request to the health care service plan or health insurer using the uniform form, and requires those plans and insurers to accept only the uniform form. Existing law authorizes a prescribing provider to submit the prior authorization form electronically to the plan or insurer, and, if the plan or insurer fails to respond to a request within 2 business days, the request is deemed granted. Existing law also requires health care service plans to maintain a process by which prescribing providers may obtain authorization for a medically necessary nonformulary prescription drug.

This bill would authorize the prescribing provider to additionally use an electronic process developed specifically for transmitting prior authorization information that meets the National Council for Prescription Drug Programs SCRIPT standard for electronic prior authorization transactions. The bill would require the departments to develop the uniform prior authorization form on or before January 1, 2017, and would require prescribing providers to use, and health care service plans and health insurers to accept, only those forms or electronic process on and after July 1, 2017, or 6 months after the form is developed, whichever is later. This bill would deem a prior authorization request to be granted if the plan or insurer fails to respond within 72 hours for nonurgent requests, and within 24 hours when exigent circumstances exist.

This bill would specify that the provisions described above relating to prior authorization for prescription drugs do not apply if a contracted physician group is delegated the financial risk for the prescription drugs by a health care service plan or health insurer, if a contracted physician group uses its own internal prior authorization process rather than the health care service plans or the health insurers prior authorization process for its enrollees or insureds, or if a contracted physician group is delegated a utilization management function by the health care service plan or the health insurer concerning any prescription drug, regardless of the delegation of financial risk.

Existing law requires health care service plans to establish a grievance process approved by the Department of Managed Health Care.

This bill would require, subject to exceptions, the grievance process established by a health care service plan or a health insurer to comply with specified federal regulations.

Because a willful violation of the bills 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.