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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill, until January 1, 2024, would require a health insurer or a health care service plan, not including a Medi-Cal managed care plan, to cover, at a minimum, at least one version of each specified medication-assisted treatment, relapse prevention, and overdose reversal prescription drug approved by the United States Food and Drug Administration for opioid use disorder. The bill would provide that at least one version of each medication-assisted treatment, relapse prevention, and overdose reversal prescription drug is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit, as specified. The bill would specify that its provisions would apply to an FDA-approved drug for use in medication-assisted treatment for opioid use disorder, relapse prevention, or overdose reversal that an enrollee or insured is being prescribed as of January 1, 2019, or, for a new enrollee or insured, that he or she is being prescribed at the time of enrollment. Because a willful violation of those provisions 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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill, until January 1, 2024, would require a health insurer or a health care service plan, not including a Medi-Cal managed care plan, to cover, at a minimum, at least one version of each specified medication-assisted treatment treatment, relapse prevention, and overdose reversal prescription drug approved by the United States Food and Drug Administration for opioid use disorder. The bill would provide that at least one version of each medication-assisted treatment, as identified by a health care service plan or health insurer, relapse prevention, and overdose reversal prescription drug is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit, as specified. The bill would specify that its provisions would apply to an FDA-approved drug for use in medication-assisted treatment for opioid use disorder disorder, relapse prevention, or overdose reversal that an enrollee or insured is being prescribed as of January 1, 2019, or, for a new enrollee or insured, that he or she is being prescribed at the time of enrollment. Because a willful violation of those provisions 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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill, until January 1, 2024, would require a drug formulary maintained by a health insurer or a health care service plan, not including a Medi-Cal managed care plan, to include, cover, at a minimum, one version of each specified medication-assisted treatment and overdose reversal prescription drugs drug approved by the United States Food and Drug Administration for opioid use disorder. The bill would provide that one version of each medication-assisted treatment treatment, as identified by a health care service plan or health insurer, is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit, as specified. The bill would specify that its provisions would apply to an FDA-approved drug for use in medication-assisted treatment for opioid use disorder that an enrollee or insured is being prescribed as of January 1, 2019, or, for a new enrollee or insured, that he or she is being prescribed at the time of enrollment. Because a willful violation of those provisions 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 (Knox-Keene), 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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill, until January 1, 2030, 2024, would require a drug formulary maintained by a health insurer or a health care service plan, not including a Medi-Cal managed care plan, and a health insurer to include, at a minimum, specified medication-assisted treatment and overdose reversal prescription drugs approved by the United States Food and Drug Administration for the medication-assisted treatment, as defined, of substance use disorders. opioid use disorder. The bill would provide that medication-assisted treatment is presumed to be medically necessary, and is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit, as specified. Because a willful violation of those provisions 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 (Knox-Keene), 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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill bill, until January 1, 2030, would require a drug formulary maintained by a health care service plan, not including a Medi-Cal managed care plan, or and a health insurer to include all include, at a minimum, specified prescription drugs approved by the United States Food and Drug Administration for the medication-assisted treatment, as defined, of substance use disorders and for the reversal of overdose. disorders. The bill would provide that medication-assisted treatment is presumed to be medically necessary, and is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit, as specified. Because a willful violation of the bills requirements relative to those provisions by a health care service plans 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 (Knox-Keene), 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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill would require a drug formulary maintained by a health care service plan, including a Medi-Cal managed plan, or health insurer to include, at a minimum, include all prescription drugs approved by the United States Food and Drug Administration for the medication-assisted treatment, as defined, of substance use disorders. disorders and for the reversal of overdose. The bill would provide that medication-assisted treatment is presumed to be medically necessary, and is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit, as specified. Because a willful violation of the bills requirements 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.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene), 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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill would require a drug formulary maintained by a health care service plan, including a Medi-Cal managed plan, or health insurer to include, at a minimum, specified all prescription drugs approved by the United States Food and Drug Administration for the medication-assisted treatment, as defined, of substance abuse use disorders. The bill would provide that medication-assisted treatment is presumed to be medically necessary, and is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit. limit, as specified. Because a willful violation of the bills requirements 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.

Existing law, the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene), 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 provides for the regulation of health insurers by the Department of Insurance. Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law requires the State Department of Health Care Services to license narcotic treatment programs to use narcotic replacement therapy in the treatment of addicted persons. Existing law specifies certain drugs, including methadone and buprenorphine, that are authorized for use in narcotic replacement therapy and medication-assisted treatment by licensed narcotic treatment programs. Existing law establishes the Drug Medi-Cal Treatment Program, under which the department is authorized to enter into contracts with each county for the provision of various alcohol and drug treatment services, including substance use disorder services, narcotic treatment program services, naltrexone services, and outpatient drug-free services, to Medi-Cal beneficiaries.

This bill would require a drug formulary maintained by a health care service plan, including a Medi-Cal managed plan, or health insurer to include, at a minimum, specified prescription drugs for the medication-assisted treatment, as defined, of substance abuse disorders. The bill would provide that medication-assisted treatment is presumed to be medically necessary, and is not subject to specified requirements of a health care service plan or policy of health insurance, including prior authorization and an annual or lifetime dollar limit. Because a willful violation of the bills requirements 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.

GOVERNOR'S VETO

GV Bill Id:AB 2384

Author:(Arambula)

As Enrolled Ver:September 6, 2018

2/3 vote

Original Committee Reference: HEALTH

SUMMARY: Requires, until January 1, 2024, a health care service plan (excluding Medi-Cal managed care plans), or a health insurer that provides prescription drug benefits to cover, at a minimum, at least one version of each of the medication assisted treatment, (MAT), relapse prevention, or overdose reversal prescriptions drugs approved by the federal Food and Drug Administration (FDA), for opioids use disorder (OUD) regardless of whether a drug is self-administered or administered by a health care provider, as specified

The Senate amendments:

1. Revise the coverage to, at a minimum, cover at least one version of each of the following MAT, relapse prevention, or overdose reversal prescriptions drugs:
   1. Buprenorphine;
   2. Methadone;
   3. Naltrexone, in both oral and suspended release injectable forms;
   4. A combination of buprenorphine and naloxone; and,
   5. Naloxone in at least one form of administration approved for community.
2. Clarify that each of the medications listed may be substituted for an equivalent drug that is approved by the FDA for MAT, relapse prevention, or overdose reversal and serves the same medical function as the drug being substituted, if the substitution is consistent with clinical guidelines and peer-reviewed scientific and medical literature.
3. Require that at least one version of each of the five MAT, relapse prevention, and overdose reversal prescription drugs listed and identified by a health care service plan or a health insurer shall not be subject to the following:
   1. Prior authorization;
   2. An annual or lifetime dollar limit, if federal restrictions on those limits are amended, revised, or repealed;
   3. Requirement that the enrollee or insured receives coverage at a facility that exceeds allowable time and distance standards for network adequacy, a specific number of visits, days of coverage, scope or duration of treatment, or other similar limitations;
   4. Financial requirements different than those for other illnesses covered under the health plan or health insurer; and,
   5. Step therapy; fail first policies, or other similar drug utilization strategies or policies.
4. Delete the assumption that MAT is medically necessary and delete the definition of "medically necessary."
5. Specify that this bill would apply to an FDA-approved drug for use in MAT, relapse prevention or overdose reversal for OUD that an enrollee or insured is being prescribed as of January 1, 2019, or, for a new enrollee or insured, that he or she is being prescribed at the time of enrollment.
6. Revise the sunset date from 2030 to 2024.

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. According to Department of Insurance, no costs (Insurance Fund), and staff notes possible costs to Department of Managed Health Care in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement while it is operative, to promulgate regulations, and update Technical Assistance Guides (until January 1, 2024).
2. According to the California Health Benefits Review Program, assuming this bill only applies to opioid-related treatment, costs of approximately $24.7 million in net change. The following figures do include expected offsets for the decreased use of services, such as emergency room visits, imaging, and inpatient days:
   1. $16.9 million (General Fund (GF)/federal funds) for Medi-Cal's total net annual expenditures, as Medi-Cal managed care enrollee OUD prevalence and related use of MAT is expected to be twice that of the commercially insured population;
   2. Increased employer-funded premium costs in the private insurance market of approximately $2.8 million;
   3. Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million;
   4. $148,000 (GF/federal funds/special fund/local funds) increase in net annual expenditures for CalPERS; and,
   5. Enrollee out-of-pocket costs for covered benefits $3.3 million.

COMMENTS: According to the author, California, like the rest of the nation, is grappling with a serious healthcare dilemma: how to use opioid medication to relieve pain safely and effectively while at the same time reducing the risk of prescription medication misuse, addiction and overdose. This bill will continue to advance California in the direction of recovery, as it removes barriers to some of the most effective and innovative treatment of substance abuse disorder in MAT. California is leading the country in multi-year reduction of overdose deaths from prescription opioids, and now we have a chance to lead in providing critical recovery services, as well. This bill will have a direct effect in removing barriers to accessing high-quality, evidence-based care.

The California Medical Association (CMA), sponsor of this bill, states in support that Americans seeking MAT still struggle to access it with insurance utilization management policies posing a significant obstacle. CMA writes that this bill will help to ensure that those seeking treatment for substance use disorders are able to receive it without long, arduous delays and waiting for health plan approval.

The California Association of Health Plans, in opposition, states that this bill requires health plans to cover MAT in a manner that hamstrings health plans' ability to make sound coverage policies that take into account the best clinical evidence or cost considerations.

GOVERNOR'S VETO MESSAGE:

This bill requires health plans to cover at least one version of each drug used in medication-assisted treatment for opioid disorders and restricts health plans' ability to manage the utilization of these drugs.

While the drugs specified in this bill are useful to treat opioid addiction, I'm not willing to eliminate requirements that may be in the best interest of patients.

Analysis Prepared by: Judy Babcock / HEALTH / (916) 319-2097 FN: 0005285

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2384

Author:(Arambula)

As Amended Ver:August 23, 2018

Majority vote

Original Committee Reference: HEALTH

SUMMARY: Requires, until January 1, 2024, a health care service plan (excluding Medi-Cal managed care plans), or a health insurer that provides prescription drug benefits to cover, at a minimum, at least one version of each of the medication assisted treatment, (MAT), relapse prevention, or overdose reversal prescriptions drugs approved by the federal Food and Drug Administration (FDA), for opioids use disorder (OUD) regardless of whether a drug is self-administered or administered by a health care provider, as specified

The Senate amendments:

1. Revise the coverage to, at a minimum, cover at least one version of each of the following MAT, relapse prevention, or overdose reversal prescriptions drugs:
   1. Buprenorphine;
   2. Methadone;
   3. Naltrexone, in both oral and suspended release injectable forms;
   4. A combination of buprenorphine and naloxone; and,
   5. Naloxone in at least one form of administration approved for community.
2. Clarify that each of the medications listed may be substituted for an equivalent drug that is approved by the FDA for MAT, relapse prevention, or overdose reversal and serves the same medical function as the drug being substituted, if the substitution is consistent with clinical guidelines and peer-reviewed scientific and medical literature.
3. Require that at least one version of each of the five MAT, relapse prevention, and overdose reversal prescription drugs listed and identified by a health care service plan or a health insurer shall not be subject to the following:
   1. Prior authorization;
   2. An annual or lifetime dollar limit, if federal restrictions on those limits are amended, revised, or repealed;
   3. Requirement that the enrollee or insured receives coverage at a facility that exceeds allowable time and distance standards for network adequacy, a specific number of visits, days of coverage, scope or duration of treatment, or other similar limitations;
   4. Financial requirements different than those for other illnesses covered under the health plan or health insurer; and,
   5. Step therapy; fail first policies, or other similar drug utilization strategies or policies.
4. Delete the assumption that MAT is medically necessary and delete the definition of "medically necessary."
5. Specify that this bill would apply to an FDA-approved drug for use in MAT, relapse prevention or overdose reversal for OUD that an enrollee or insured is being prescribed as of January 1, 2019, or, for a new enrollee or insured, that he or she is being prescribed at the time of enrollment.
6. Revise the sunset date from 2030 to 2024.

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. According to Department of Insurance, no costs (Insurance Fund), and staff notes possible costs to Department of Managed Health Care in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement while it is operative, to promulgate regulations, and update Technical Assistance Guides (until January 1, 2024).
2. According to the California Health Benefits Review Program, assuming this bill only applies to opioid-related treatment, costs of approximately $24.7 million in net change. The following figures do include expected offsets for the decreased use of services, such as emergency room visits, imaging, and inpatient days:
   1. $16.9 million (General Fund (GF)/federal funds) for Medi-Cal's total net annual expenditures, as Medi-Cal managed care enrollee OUD prevalence and related use of MAT is expected to be twice that of the commercially insured population;
   2. Increased employer-funded premium costs in the private insurance market of approximately $2.8 million;
   3. Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million;
   4. $148,000 (GF/federal funds/special fund/local funds) increase in net annual expenditures for CalPERS; and,
   5. Enrollee out-of-pocket costs for covered benefits $3.3 million.

COMMENTS: According to the author, California, like the rest of the nation, is grappling with a serious healthcare dilemma: how to use opioid medication to relieve pain safely and effectively while at the same time reducing the risk of prescription medication misuse, addiction and overdose. This bill will continue to advance California in the direction of recovery, as it removes barriers to some of the most effective and innovative treatment of substance abuse disorder in MAT. California is leading the country in multi-year reduction of overdose deaths from prescription opioids, and now we have a chance to lead in providing critical recovery services, as well. This bill will have a direct effect in removing barriers to accessing high-quality, evidence-based care.

The California Medical Association (CMA), sponsor of this bill, states in support that Americans seeking MAT still struggle to access it with insurance utilization management policies posing a significant obstacle. CMA writes that this bill will help to ensure that those seeking treatment for substance use disorders are able to receive it without long, arduous delays and waiting for health plan approval.

The California Association of Health Plans, in opposition, states that this bill requires health plans to cover MAT in a manner that hamstrings health plans' ability to make sound coverage policies that take into account the best clinical evidence or cost considerations.

Analysis Prepared by: Kristene Mapile and Judith Babcock / HEALTH (916) 319-2097 FN: 0005083

 THIRD READING  

Bill No: AB 2384

Author:

:

Vote:

SENATE HEALTH COMMITTEE: 6-2, 6/27/18

AYES: Pan, Beall, Leyva, Mitchell, Monning, Roth

NOES: Nguyen, Nielsen

NO VOTE RECORDED: Hernandez

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/16/18

AYES: Portantino, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

ASSEMBLY FLOOR: 58-17, 5/31/18 - See last page for vote

SUBJECT:

SOURCE: California Medical Association

DIGEST:

This bill mandates coverage for at least one medication-assisted treatment (MAT), relapse prevention and overdose reversal prescription drug for opioid use disorder; and prohibits health plans and insurers from using prior authorization, fail first or step-therapy and other utilization management requirements for at least one version of each MAT, relapse prevention and overdose reversal prescription drug. This bill sunsets on January 1, 2024.

Senate Floor Amendments of 8/23/18 add at least one relapse prevention medication to the treatment that is mandated and prohibited from utilization management, clarify that substitutions are permitted consistent with clinical guidelines and peer-reviewed scientific and medical literature, clarify that step therapy, fail first policies or other similar drug utilization strategies or policies cannot be applied to at least one version of treatment described in this bill, and exempt Medi-Cal managed care plans that contract with the Department of Health Care Services under the County Health Initiative Fund.

ANALYSIS:

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health insurance. [HSC §1340, et seq. and INS §106, et seq.]
2. Requires a health plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs, including nonformulary drugs determined to be medically necessary. Prohibits, consistent with existing law, formularies for outpatient prescription drugs from discouraging enrollment of individual with health conditions and not reduce the generosity of benefits with a particular condition that is not based on clinical indication or reasonable medical management practices. [HSC §1372.41 and INS §10123.193]
3. Permits, in the provision of outpatient prescription drug coverage, a health plan or health insurer to utilize formulary, prior authorization, step therapy, or other reasonable medical management practices. Requires any limit or utilization management to be consistent with and based on clinical guidelines and peer-reviewed scientific and medical literature. [HSC §1372.41 and INS §10123.193]
4. Requires a health plan that provides prescription drug benefits to maintain an expeditious process by which prescribing providers may obtain authorization for a medically necessary nonformulary prescription drug. [HSC §1367.24]
5. Requires, if a health plan or health insurer that provides coverage for prescription drugs fails to respond to a prior authorization, as specified, within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed form, the request to be deemed granted. [HSC §1367.241 and INS §10123.191]
6. Requires a request for an exception to a health plan’s or health insurer’s step therapy process for prescription drugs to be submitted in the same manner as a request for prior authorization pursuant to 5) above and treated in the same manner and responded to in the same manner. [HSC §1367.25 and INS §10123.197]
7. Prohibits, under the Affordable Care Act (ACA), group health plans (insured and self-insured group health plans) and health insurance issuers offering group or individual health insurance coverage from imposing lifetime or annual limits on the dollar value of health benefits. [42 USC §300gg-11]
8. Requires, to the extent required by the ACA, every health plan and health insurer that issues, sells, renews, or offers contracts for health care coverage in this state to comply with the requirements of ACA related to annual and lifetime limits, and any rules or regulations issued under that law, in addition to any state laws or regulations that do not prevent the application of those requirements. Exempts specified public programs from these requirements to the extent consistent with the ACA. [HSC §1367.001 and INS §10112.1]

This bill:

1. Requires a health plan and health insurer that provides prescription drug benefits and maintains one or more drug formularies to include, at a minimum, at least one version of each of the following MAT, relapse prevention and overdose reversal prescription drugs approved by the United States Food and Drug Administration (FDA) for opioid use disorder:
2. Buprenorphine;
3. Methadone;
4. Naltrexone;
5. A combination of buprenorphine and naloxone; and,
6. Naloxone in at least one form of administration approved for community use.
7. Permits each of the medications listed in 1) above to be substituted for an equivalent drug that is approved by the FDA for MAT, relapse prevention, or overdose reversal, and serves the same medical function as the drug being substituted, if consistent with clinical guidelines and peer reviewed, scientific and medical literature.
8. Prohibits at least one version of each of the five MAT, relapse prevention and overdose reversal prescription drugs listed in 1) above and identified by the health plan or health insurer to be provided pursuant to this bill from being subject to the following:
9. Prior authorization;
10. An annual or lifetime dollar limit, if federal restrictions on those limits are amended, revised, or repealed;
11. A requirement that the enrollee/insured receives coverage at a facility that exceeds allowable time and distance standards for network adequacy, a specific number of visits, days of coverage, scope or duration of treatment, or other similar limitations;
12. Financial requirements different than those for other illnesses covered under the health plan contract or health insurance policy; and,
13. Step therapy, fail first polices, or other similar drug utilization strategies or policies.
14. Defines “MAT” as the use of medications, commonly in combination with counseling and behavioral therapy, to provide a comprehensive approach to the treatment of opioid use disorder; and it includes, but is not limited to, pharmacologic therapies with or without behavioral therapies.
15. Prohibits the requirements of this bill from being subject to an enrollee’s/insured’s prior success or failure with MAT.
16. States that this bill applies to an FDA-approved drug for use in MAT, relapse prevention, or overdose reversal for opioid use disorder that an enrollee or insured is being prescribed as of January 1, 2019, or, for a new enrollee or insured, that the new enrollee or insured is being prescribed at the time of enrollment.
17. Excludes Medi-Cal managed care plans, as specified, from the definition of health plan for purposes of this bill, including those with contracts under the County Health Initiative Fund.
18. Sunsets on January 1, 2024.

Comments

1. Author’s statement. According to the author, “California, like the rest of the nation, is grappling with a serious healthcare dilemma: how to use opioid medication to relieve pain safely and effectively while at the same time reducing the risk of prescription medication misuse, addiction and overdose. As an emergency room physician, I saw the impact that opioid abuse has on families firsthand and I believe we need to reduce the availability of prescription medications that may be misused or diverted. This bill will continue to advance California in the direction of recovery, as it removes barriers to some of the most effective and innovative treatment of substance abuse disorder in medication-assisted therapy. California is leading the country in multi-year reduction of overdose deaths from prescription opioids, and now we have a chance to lead in providing critical recovery services, as well. This bill will have a direct effect in removing barriers to accessing high-quality, evidence-based care. With these measures, I hope we are able to reduce the misuse of opioids while also effectively relieving pain.”
2. Opioid dependence. According to the California HealthCare Foundation (CHCF), in 2016, an estimated 5.8% of people ages 12 years and older (1,934,253 people) misused opioids in California, and 1.1% (348,193 people) had an opioid use disorder (OUD). Approximately one-fifth of those who misuse opioids have an OUD. California had 1,919 opioid overdose deaths in 2016. There are 165,977 to 245,093 people with OUD in California without local access to opioid agonist treatment (i.e. buprenorphine or methadone). The Centers for Disease Control and Prevention (CDC) estimates that the U.S. spends $52.4 billion annually on the nonmedical use of opioids, $55.7 billion on misuse and addiction, and $20.4 billion associated with overdose.
3. Barriers. The CHCF report identifies the following barriers to MAT, noting that only 10% of Americans seeking treatment can access it:
   1. A shortage of primary care buprenorphine prescribers, addiction specialists, and opioid treatment programs;
   2. Restrictive health plan authorization requirements;
   3. Lack of sufficient behavioral health workforce;
   4. Stigma (leading patients to avoid opioid treatment programs);
   5. Lack of provider knowledge and training;
   6. Many opioid treatment programs do not accept health insurance;
   7. Many commercial plans have difficulty ensuring a network sufficient to meet demand;
   8. Most health plans do not have medical, pharmacy, or care management staff knowledgeable about addiction treatments; and,
   9. Privacy restrictions in the law result in challenges to coordinating care.
4. Plan recommendations and response. The 2017 CHCF report was commissioned for a health plan audience to make the case for commercial and public plans to improve access to MAT, as part of a broader initiative to lower opioid-related morbidity and mortality. The 2017 CHCF report indicates that plans can assess network adequacy and expand their networks to ensure better access to addiction and pain treatment, and can incentivize integration of behavioral health services. The report indicates that health plans are working to increase treatment access through multiple coordinated approaches, including: changing formularies to promote safer opioid prescribing; eliminating prior authorization requirements and copays for MAT and naloxone; contracting with telehealth providers; incentivizing behavioral health integration through P4P or direct grants; providing data analytics to identify patients at risk for addiction; training case managers to guide members to treatment; starting care management programs for addiction; creating dashboards to measure progress on opioid prescribing and MAT access, and sharing them with providers and delegated medical groups; identifying outlier prescribers to provide education and, when appropriate, refer for fraud; and, identifying outlier members to refer to case management.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• According to CDI, no costs (Insurance Fund), and staff notes possible costs to DMHC in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement while it is operative, to promulgate regulations, and update Technical Assistance Guides (until January 1, 2024).
• According to the California Health Benefits Review Program (CHBRP), which assumes that this bill only applies to opioid-related treatment, approximately $24.7 million in net change. The following figures do include expected offsets for the decreased use of services, such as emergency room visits, imaging, and inpatient days:
  • $16.9 million (GF/federal fund) for Medi-Cal’s total net annual expenditures, as Medi-Cal managed care enrollee OUD prevalence and related use of MAT is expected to be twice that of the commercially insured population.
  • Increased employer-funded premium costs in the private insurance market of approximately $2.8 million.
  • Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million.
  • $148,000 (General Fund/federal/special/local) increase in net annual expenditures for CalPERS.
  • Enrollee out-of-pocket costs for covered benefits $3.3 million.

SUPPORT: (Verified 8/24/18)

California Medical Association (source)

AIDS Healthcare Foundation

Alcohol Justice

American Academy of Pediatrics, California

California Academy of Family Physicians

California Association for Alcohol/Drug Educators

California Chapter of the American College or Emergency Physicians

California Council of Community Behavioral Health Agencies

County Behavioral Health Directors Association of California

Western Center on Law and Poverty

OPPOSITION: (Verified 8/24/18)

America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

California Chamber of Commerce

Health Net

ARGUMENTS IN SUPPORT: The California Medical Association writes this bill will help to ensure that those seeking treatment for substance abuse disorders are able to receive it without long, arduous delays and waiting for health plan approval, by removing prior authorization. It will also ensure that, no matter the fate of the ACA, patients will not come to an end of their coverage, causing them to choose between continuing treatment for addiction, or losing that coverage and facing recovery without medication or physician guidance. These, and other provisions in the bill, will make sure that health plan administrative barriers do not prevent patients seeking recovery from being able to receive the outstandingly effective, FDA-approved method of treatment. The AIDS Healthcare Foundation (AHF) writes that the CDC has called attention to the fact that prescription opioids are correlative to increases in HIV and STD rates. AHF has experienced this issue first hand two years ago when the State of Indiana asked AHF to intervene in a small community of 4,300 residents that experienced 170 cases of HIV in eight months due to the rampant abuse of prescription opioids. This bill removes barriers for people seeking substance abuse treatment. The American Academy of Pediatrics, California advocates for increasing resources to improve access to MAT of opioid-addicted adolescents and young adults. Many barriers to treatment exist with existing law. People seeking MAT still struggle to access it and insurance utilization management policies pose a significant obstacle. This bill removes barriers to some of the most effective and innovative treatment of opioid abuse disorders.

ARGUMENTS IN OPPOSITION: America’s Health Insurance Plans and the Association of California Life and Health Insurance Companies indicate that health plans are working to address the opioid epidemic by preventing opioid misuse and abuse at the front end and by helping patients who are already addicted access the treatments they need, including MAT. Patients seeking MAT have a number of consumer protections in place under existing California and federal law. This bill removes all prior authorization and step therapy protocols for MAT, contrary to industry consensus and clinical evidence. Health plans pursue effective provider incentive structures, including medical management techniques, to protect patient safety and affordability. Health plans are promoting the appropriate use of MAT drugs, which can interfere with other medications or potentially worsen comorbidities and working with clinicians to ensure tailed, patient-focused treatment programs are established to improve outcomes and promote adherence. This bill could expose consumers and plans sponsors to surprise out-of-network bills.

ASSEMBLY FLOOR: 58-17, 5/31/18

AYES: Aguiar-Curry, Travis Allen, Arambula, Berman, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chiu, Chu, Cooley, Daly, Eggman, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Levine, Limón, Low, Maienschein, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Waldron, Weber, Wood, Rendon

NOES: Acosta, Baker, Bigelow, Choi, Cunningham, Dahle, Flora, Fong, Frazier, Harper, Kiley, Lackey, Mayes, Obernolte, Patterson, Steinorth, Voepel

NO VOTE RECORDED: Chen, Cooper, Mathis

Prepared by:

8/24/18 14:39:53

**** END ****

 THIRD READING  

Bill No: AB 2384

Author:

:

Vote:

SENATE HEALTH COMMITTEE: 6-2, 6/27/18

AYES: Pan, Beall, Leyva, Mitchell, Monning, Roth

NOES: Nguyen, Nielsen

NO VOTE RECORDED: Hernandez

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/16/18

AYES: Portantino, Beall, Bradford, Hill, Wiener

NOES: Bates, Nielsen

ASSEMBLY FLOOR: 58-17, 5/31/18 - See last page for vote

SUBJECT:

SOURCE: California Medical Association

DIGEST:

This bill mandates coverage for at least one medication-assisted treatment (MAT) and overdose prescription drugs for opioid use disorder; and prohibits health plans and insurers from using prior authorization, fail first or step-therapy and other utilization management requirements for at least one version of each MAT and overdose prescription drug. This bill sunsets on January 1, 2024.

ANALYSIS:

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health insurance. [HSC §1340, et seq. and INS §106, et seq.]
   
2. Requires a health plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs, including nonformulary drugs determined to be medically necessary. Prohibits, consistent with existing law, formularies for outpatient prescription drugs from discouraging enrollment of individual with health conditions and not reduce the generosity of benefits with a particular condition that is not based on clinical indication or reasonable medical management practices. [HSC §1372.41 and INS §10123.193]
3. Permits, in the provision of outpatient prescription drug coverage, a health plan or health insurer to utilize formulary, prior authorization, step therapy, or other reasonable medical management practices. Requires any limit or utilization management to be consistent with and based on clinical guidelines and peer-reviewed scientific and medical literature. [HSC §1372.41 and INS §10123.193]
   
4. Requires a health plan that provides prescription drug benefits to maintain an expeditious process by which prescribing providers may obtain authorization for a medically necessary nonformulary prescription drug. [HSC §1367.24]
5. Requires, if a health plan or health insurer that provides coverage for prescription drugs fails to respond to a prior authorization, as specified, within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed form, the request to be deemed granted. [HSC §1367.241 and INS §10123.191]
6. Requires a request for an exception to a health plan’s or health insurer’s step therapy process for prescription drugs to be submitted in the same manner as a request for prior authorization pursuant to 5) above and treated in the same manner and responded to in the same manner. [HSC §1367.25 and INS §10123.197]
7. Prohibits, under the Affordable Care Act (ACA), group health plans (insured and self-insured group health plans) and health insurance issuers offering group or individual health insurance coverage from imposing lifetime or annual limits on the dollar value of health benefits. [42 USC §300gg-11]
   
8. Requires, to the extent required by the ACA, every health plan and health insurer that issues, sells, renews, or offers contracts for health care coverage in this state to comply with the requirements of ACA related to annual and lifetime limits, and any rules or regulations issued under that law, in addition to any state laws or regulations that do not prevent the application of those requirements. Exempts specified public programs from these requirements to the extent consistent with the ACA. [HSC §1367.001 and INS §10112.1]
   

This bill:

1. Requires a health plan and health insurer that provides prescription drug benefits and maintains one or more drug formularies to include, at a minimum, at least one version of each of the following MAT and overdose reversal prescription drugs approved by the United States Food and Drug Administration (FDA) for opioid use disorder:
2. Buprenorphine;
3. Methadone;
4. Naltrexone;
5. A combination of buprenorphine and naloxone; and,
6. Naloxone in at least one form of administration approved for community use.
   
7. Permits each of the medications listed in 1) above to be substituted for an equivalent drug that is approved by the FDA for MAT and serves the same medical function as the drug being substituted.
   
8. Prohibits at least one version of each of the five MAT and overdose reversal prescription drugs listed in 1) above and identified by the health plan or health insurer to be provided pursuant to this bill from being subject to the following:
9. Prior authorization;
10. An annual or lifetime dollar limit, if federal restrictions on those limits are amended, revised, or repealed;
11. A requirement that the enrollee/insured receives coverage at a facility that exceeds allowable time and distance standards for network adequacy, a specific number of visits, days of coverage, scope or duration of treatment, or other similar limitations;
12. Financial requirements different than those for other illnesses covered under the health plan contract or health insurance policy; and,
13. Step therapy, fail first polices, or other similar drug utilization strategies or policies for patients that may conflict with a prescribed course of treatment from a licensed health care professional.
    
14. Defines “MAT” as the use of medications, commonly in combination with counseling and behavioral therapy, to provide a comprehensive approach to the treatment of opioid use disorder; and it includes, but is not limited to, pharmacologic therapies with or without behavioral therapies.
    
15. Prohibits the requirements of this bill from being subject to an enrollee’s/insured’s prior success or failure with the MAT services provided.
    
16. States that this bill applies to an FDA-approved drug for use in MAT for opioid use disorder that an enrollee or insured is being prescribed as of January 1, 2019, or, for a new enrollee or insured, that the new enrollee or insured is being prescribed at the time of enrollment.
    
17. Excludes Medi-Cal managed care plans, as specified, from the definition of health plan for purposes of this bill.
    
18. Sunsets on January 1, 2024.

Comments

1. Author’s statement. According to the author, “California, like the rest of the nation, is grappling with a serious healthcare dilemma: how to use opioid medication to relieve pain safely and effectively while at the same time reducing the risk of prescription medication misuse, addiction and overdose. As an emergency room physician, I saw the impact that opioid abuse has on families firsthand and I believe we need to reduce the availability of prescription medications that may be misused or diverted. This bill will continue to advance California in the direction of recovery, as it removes barriers to some of the most effective and innovative treatment of substance abuse disorder in medication-assisted therapy. California is leading the country in multi-year reduction of overdose deaths from prescription opioids, and now we have a chance to lead in providing critical recovery services, as well. This bill will have a direct effect in removing barriers to accessing high-quality, evidence-based care. With these measures, I hope we are able to reduce the misuse of opioids while also effectively relieving pain.”
2. Opioid dependence. According to the California HealthCare Foundation (CHCF), in 2016, an estimated 5.8% of people ages 12 years and older (1,934,253 people) misused opioids in California, and 1.1% (348,193 people) had an opioid use disorder (OUD). Approximately one-fifth of those who misuse opioids have an OUD. California had 1,919 opioid overdose deaths in 2016. There are 165,977 to 245,093 people with OUD in California without local access to opioid agonist treatment (i.e. buprenorphine or methadone). The Centers for Disease Control and Prevention (CDC) estimates that the U.S. spends $52.4 billion annually on the nonmedical use of opioids, $55.7 billion on misuse and addiction, and $20.4 billion associated with overdose.
3. Barriers. The CHCF report identifies the following barriers to medication-assisted treatment, noting that only 10% of Americans seeking treatment can access it:
   1. A shortage of primary care buprenorphine prescribers, addiction specialists, and opioid treatment programs;
   2. Restrictive health plan authorization requirements;
   3. Lack of sufficient behavioral health workforce;
   4. Stigma (leading patients to avoid opioid treatment programs);
   5. Lack of provider knowledge and training;
   6. Many opioid treatment programs do not accept health insurance;
   7. Many commercial plans have difficulty ensuring a network sufficient to meet demand;
   8. Most health plans do not have medical, pharmacy, or care management staff knowledgeable about addiction treatments; and,
   9. Privacy restrictions in the law result in challenges to coordinating care.
4. Plan recommendations and response. The 2017 CHCF report was commissioned for a health plan audience to make the case for commercial and public plans to improve access to medication-assisted treatment, as part of a broader initiative to lower opioid-related morbidity and mortality. The 2017 CHCF report indicates that plans can assess network adequacy and expand their networks to ensure better access to addiction and pain treatment, and can incentivize integration of behavioral health services. The report indicates that health plans are working to increase treatment access through multiple coordinated approaches, including: changing formularies to promote safer opioid prescribing; eliminating prior authorization requirements and copays for medication-assisted treatment and naloxone; contracting with telehealth providers; incentivizing behavioral health integration through P4P or direct grants; providing data analytics to identify patients at risk for addiction; training case managers to guide members to treatment; starting care management programs for addiction; creating dashboards to measure progress on opioid prescribing and medication-assisted treatment access, and sharing them with providers and delegated medical groups; identifying outlier prescribers to provide education and, when appropriate, refer for fraud; and, identifying outlier members to refer to case management.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• According to CDI, no costs (Insurance Fund), and staff notes possible costs to DMHC in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement while it is operative, to promulgate regulations, and update Technical Assistance Guides (until January 1, 2024).
• According to the California Health Benefits Review Program (CHBRP), which assumes that this bill only applies to opioid-related treatment, approximately $24.7 million in net change. The following figures do include expected offsets for the decreased use of services, such as emergency room visits, imaging, and inpatient days:
  • $16.9 million (GF/federal fund) for Medi-Cal’s total net annual expenditures, as Medi-Cal managed care enrollee OUD prevalence and related use of MAT is expected to be twice that of the commercially insured population.
  • Increased employer-funded premium costs in the private insurance market of approximately $2.8 million.
  • Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million.
  • $148,000 (General Fund/federal/special/local) increase in net annual expenditures for CalPERS.
  • Enrollee out-of-pocket costs for covered benefits $3.3 million.

SUPPORT: (Verified 8/16/18)

California Medical Association (source)

AIDS Healthcare Foundation

Alcohol Justice

American Academy of Pediatrics, California

California Academy of Family Physicians

California Association for Alcohol/Drug Educators

California Chapter of the American College or Emergency Physicians

California Council of Community Behavioral Health Agencies

County Behavioral Health Directors Association of California

Western Center on Law and Poverty

OPPOSITION: (Verified 8/16/18)

America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

California Chamber of Commerce

Health Net

ARGUMENTS IN SUPPORT: The California Medical Association writes this bill will help to ensure that those seeking treatment for substance abuse disorders are able to receive it without long, arduous delays and waiting for health plan approval, by removing prior authorization. It will also ensure that, no matter the fate of the ACA, patients will not come to an end of their coverage, causing them to choose between continuing treatment for addiction, or losing that coverage and facing recovery without medication or physician guidance. These, and other provisions in the bill, will make sure that health plan administrative barriers do not prevent patients seeking recovery from being able to receive the outstandingly effective, FDA-approved method of treatment. The AIDS Healthcare Foundation (AHF) writes that the CDC has called attention to the fact that prescription opioids are correlative to increases HIV and STD rates. AHF has experienced this issue first hand two years ago when the State of Indiana asked AHF to intervene in a small community of 4,300 residents that experienced 170 cases of HIV in eight months due to the rampant abuse of prescription opioids. This bill removes barriers for people seeking substance abuse treatment. The American Academy of Pediatrics, California advocates for increasing resources to improve access to MAT of opioid-addicted adolescents and young adults. Many barriers to treatment exist with existing law. People seeking MAT still struggle to access it and insurance utilization management policies pose a significant obstacle. This bill removes barriers to some of the most effective and innovative treatment of opioid abuse disorders.

ARGUMENTS IN OPPOSITION: America’s Health Insurance Plans and the Association of California Life and Health Insurance Companies indicate that health plans are working to address the opioid epidemic by preventing opioid misuse and abuse at the front end and by helping patients who are already addicted access the treatments they need, including medication-assisted treatment. Patients seeking MAT have a number of consumer protections in place under existing California and federal law. This bill removes all prior authorization and step therapy protocols for MAT, contrary to industry consensus and clinical evidence. Health plans pursue effective provider incentive structures, including medical management techniques, to protect patient safety and affordability. Health plans are promoting the appropriate use of MAT drugs, which can interfere with other medications or potentially worsen comorbidities and working with clinicians to ensure tailed, patient-focused treatment programs are established to improve outcomes and promote adherence. This bill could expose consumers and plans sponsors to surprise out-of-network bills.

ASSEMBLY FLOOR: 58-17, 5/31/18

AYES: Aguiar-Curry, Travis Allen, Arambula, Berman, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chiu, Chu, Cooley, Daly, Eggman, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Levine, Limón, Low, Maienschein, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, O'Donnell, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Santiago, Mark Stone, Thurmond, Ting, Waldron, Weber, Wood, Rendon

NOES: Acosta, Baker, Bigelow, Choi, Cunningham, Dahle, Flora, Fong, Frazier, Harper, Kiley, Lackey, Mayes, Obernolte, Patterson, Steinorth, Voepel

NO VOTE RECORDED: Chen, Cooper, Mathis

Prepared by:

8/18/18 13:17:25

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 2384 (Arambula) - Medication-assisted treatment

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

Bill Summary:

Requires a health plan and health insurer to provide medication-assisted treatment (MAT) and overdose prescription drugs for opioid use disorder; and prohibits health plans and insurers from using prior authorization; fail first or step-therapy and other utilization management requirements. Sunsets on January 1, 2024.

Fiscal Impact:

• According to Department of Insurance, no costs (Insurance Fund), and staff notes possible costs to DMHC in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement while it is operative, to promulgate regulations, and update Technical Assistance Guides (until January 1, 2024).
• According to the California Health Benefits Review Program (CHBRP), which assumes that the bill only applies to opioid-related treatment, approximately $24.7 million in net change. The following figures do include expected offsets for the decreased use of services, such as emergency room visits, imaging, and inpatient days:
  • $16.9 million (GF/federal fund) for Medi-Cal’s total net annual expenditures, as Medi-Cal managed care enrollee OUD prevalence and related use of MAT is expected to be twice that of the commercially insured population.
    
  • Increased employer-funded premium costs in the private insurance market of approximately $2.8 million;
  • Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million
  • $148,000 (General Fund/federal/special/local) increase in net annual expenditures for CalPERS.
  • Enrollee out-of-pocket costs for covered benefits $3.3 million.

Background:

The federal Substance Abuse and Mental Health Services Administration (SAHMSA) defines medication-assisted treatment (MAT) as the use of medications approved by the Food & Drug Administration (FDA), in combination with counseling and behavioral health therapies. Health plans and insurers commonly use a number of utilization management tools to manage costs and to ensure the appropriateness of care. For some enrollees with opioid use disorder, some of these tools may create structural barriers to accessing coverage for MAT. According to the California HealthCare Foundation (CHCF), in 2016, an estimated 5.8% of people ages 12 years and older (1,934,253 people) misused opioids in California, and 1.1% (348,193 people) had an opioid use disorder (OUD). Approximately one-fifth of those who misuse opioids have an OUD. California had 1,919 opioid overdose deaths in 2016. There are 165,977 to 245,093 people with OUD in California without local access to opioid agonist treatment (i.e. buprenorphine or methadone).

Proposed Law:

Assembly Bill 2384 includes the following provisions, among others:

• Requires a health care service plan and a health insurer that provides prescription drug benefits to cover, at a minimum, at least one version of each specified medication-assisted treatment and overdose reversal prescription drugs approved by the United States Food and Drug Administration (FDA) for opioid use disorder, regardless of whether a drug is self-administered or administered by a health care provider.
• Provides that each of the medication-assisted treatment and overdose reversal prescription drugs may be substituted for an equivalent drug that is approved by the FDA for medication-assisted treatment and serves the same medical function as the drug being substituted.
• Prohibits medication-assisted treatment and overdose reversal prescription drugs from being subject to the following: prior authorization; an annual or lifetime dollar limit; a requirement that the enrollee receives coverage at an outpatient facility that exceeds allowable time and distance standards for network adequacy, a specific number of visits, days of coverage, scope or duration of treatment, or other similar limitations; financial requirements different than those for other illnesses covered under the health care service; step therapy, fail first policies, or other similar drug utilization strategies or policies for patients that may conflict with a prescribed course of treatment from a licensed health care professional.
• Prohibits the bill’s requirements from being subject to an enrollee’s prior success or failure with the medication-assisted treatment services provided.
• Establishes that the bill applies to an FDA-approved drug for use in medication-assisted treatment for opioid use disorder that an enrollee is being prescribed as of January 1, 2019, or, for a new enrollee, that the new enrollee is being prescribed at the time of enrollment.
• Sunsets the bill on January 1, 2024.

Related Legislation:

AB 182 (Waldron, 2017) would have required the Department of Public Health (CDPH) to develop, coordinate, implement, and oversee a public awareness campaign, as specified, upon appropriation or receipt of adequate state or federal funds, to educate targeted audiences about the growing heroin use and opioid medication abuse epidemic, as well as the importance and availability of services to avert addiction and to treat substance use disorders. AB 182 was held under submission in the Senate Appropriations Committee’s suspense file.

Staff Comments:

According to the CHBRP analysis, there is clear and convincing evidence that medications used to provide medication-assisted treatment for opioid use disorder are more effective than a placebo or no treatment for retention of patients in treatment, abstinence from opioids, and birth outcomes. There is also a preponderance of evidence that receipt of medication reduces mortality.

With respect to projected impact on expenditures, CHBRP also notes, although the frequency of services will increase due to new users and removal of utilization management, unit cost of services and medication assisted treatment maintenance mediations is not anticipated to change, post-mandate. However, due to the removal of utilization management related to brand-name drug use, CHBRP assumes that doses of naloxone provided to medication-assisted treatment patients will shift to greater use of auto-injectors ($4,603 per unit) and lesser use of pre-filled syringes and nasal spray ($94 per unit), which will raise the average unit cost for naloxone. The expected increases in medication-assisted treatment and related services would increase total net annual expenditures for enrollees in DMHC-regulated plans and CDI-regulated policies. The expenditure impacts include expected offsets for the decreased use of some services (such as inpatient days, emergency room visits, and imaging) expected for new users of medication-assisted treatment. Offsets related to commercial enrollees are larger due to the higher prices paid, except for services with restrictions or additional licensure requirements on suppliers like methadone and buprenorphine. This bill would increase CalPERS’ total net annual expenditures by $148,000 or 0.0027%, as the offsets applicable for other commercial enrollees newly in medication-assisted treatment for OUD would occur for some CalPERS enrollees as well.

In the first year post-mandate, CHBRP projects that this bill would decrease the illicit drug use, opioid overdose, overdose-related mortality, poor maternal/fetal outcomes, and HIV and hepatitis C transmission among the 9,979 new medication-assisted treatment users. The public health impact of this bill may be less than could be anticipated for several reasons including structural barriers, such as the limited number of providers.

CHBRP notes the cost impacts projected could be higher if this bill would (1) require coverage for outpatient treatment of substance use disorders other than opioid addiction (such as tobacco and alcohol), (2) affect coverage of behavioral therapy and/or naloxone that is independent of maintenance MAT medication use, (3) broadly require closed network plans/policies to cover treatments prescribed by or delivered by out-of-network providers/facilities and/or (4) directly impact coverage of inpatient treatment.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Dr. Richard Pan, Chair

BILL NO: AB 2384

SUBJECT: Medication-assisted treatment.

SUMMARY:

Mandates medication-assisted treatment and overdose prescription drugs for opioid use disorder; and prohibits health plans and insurers from using prior authorization; fail first or step-therapy and other utilization management requirements. Sunsets this bill on January 1, 2024.

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act) and the California Department of Insurance (CDI) to regulate health insurance. [HSC §1340, et seq. and INS §106, et seq.]
   
2. Establishes as California's essential health benefits (EHBs) benchmark the Kaiser Small Group Health Maintenance Organization, existing California mandates, and ten federal Affordable Care Act (ACA) mandated benefits, which include prescription drug coverage. Requires nongrandfathered individual and small group health plan contracts and health insurance policies to cover these EHBs and comply with Knox-Keene Act requirements including those related to prescription drug coverage. [HSC §1367.005 and INS §10112.27]
   
3. Requires a health plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs, including nonformulary drugs determined to be medically necessary. Prohibits, consistent with existing law, formularies for outpatient prescription drugs from discouraging enrollment of individual with health conditions and not reduce the generosity of benefits with a particular condition that is not based on clinical indication or reasonable medical management practices. [HSC §1372.41 and INS §10123.193]
4. Permits, in the provision of outpatient prescription drug coverage, a health plan or health insurer to utilize formulary, prior authorization, step therapy, or other reasonable medical management practices. Requires any limit or utilization management to be consistent with and based on clinical guidelines and peer-reviewed scientific and medical literature. [HSC §1372.41 and INS §10123.193]
   
5. Requires a health plan that provides prescription drug benefits to maintain an expeditious process by which prescribing providers may obtain authorization for a medically necessary nonformulary prescription drug. [HSC §1367.24]
6. Requires, if a health plan or health insurer that provides coverage for prescription drugs fails to respond to a prior authorization, as specified, within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed form, the request to be deemed granted. [HSC §1367.241 and INS §10123.191]
7. Requires a request for an exception to a health plan’s or health insurer’s step therapy process for prescription drugs to be submitted in the same manner as a request for prior authorization pursuant to 6) above and treated in the same manner and responded to in the same manner. [HSC §1367.25 and INS §10123.197]
8. Prohibits, under the ACA, group health plans (insured and self-insured group health plans) and health insurance issuers offering group or individual health insurance coverage from imposing lifetime or annual limits on the dollar value of health benefits. [42 USC §300gg-11]
   
9. Requires, to the extent required by the ACA, every health plan and health insurer that issues, sells, renews, or offers contracts for health care coverage in this state to comply with the requirements of ACA related to annual and lifetime limits, and any rules or regulations issued under that law, in addition to any state laws or regulations that do not prevent the application of those requirements. Exempts specified public programs from these requirements to the extent consistent with the ACA. [HSC §1367.001 and INS §10112.1]
   
10. Establishes time and distance standards, such as requiring a primary care provider to be within 15 miles or 30 minutes of an enrollee’s/insured’s work or residence, and appointment availability standards, such as 48 hours for urgent appointments that do not require prior authorization, 96 hours for urgent appointments that do require prior authorization, 15 days for specialists for non-urgent appointments, ten business days for non-urgent appointments with a non-physician mental health care provider for health plans and health insurers. [HSC §1367.03, INS §10133.53, 28 CCR §1300:67.2.2 and 10 CCR §2240.15]
    
11. Requires reviews, for purposes of Independent Medical Review (IMR), to determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee/insured and any of the following:
12. Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service;
13. Nationally recognized professional standards;
14. Expert opinion;
15. Generally accepted standards of medical practice; or,
16. Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. [HSC §1374.33(b) and IC §10169.3 (b)]
    

This bill:

1. Requires a health plan and health insurer that provides prescription drug benefits and maintains one or more drug formularies to include, at a minimum, the following medication-assisted treatment and overdose reversal prescription drugs approved by the United States Food and Drug Administration (FDA) for opioid use disorder:
2. Buprenorphine, in both oral and injectable forms;
3. Methadone, as provided through a plan’s medical benefit;
4. Naltrexone, in both oral and suspended release injectable forms;
5. A combination of buprenorphine and naloxone in both oral and implantable forms; and,
6. Naloxone in at least one form of administration.
   
7. Prohibits medication-assisted treatment provided pursuant to this bill from being subject to the following:
8. Prior authorization;
9. An annual or lifetime dollar limit, if federal restrictions on those limits are amended, revised, or repealed;
10. A requirement that the enrollee/insured receives coverage at a facility that exceeds allowable time and distance standards for network adequacy, a specific number of visits, days of coverage, scope or duration of treatment, or other similar limitations;
11. Financial requirements different than those for other illnesses covered under the health plan contract or health insurance policy; and,
12. Step therapy, fail first polices, or other similar drug utilization strategies or policies for patients that may conflict with a prescribed course of treatment from a licensed health care professional.
    
13. Defines “medication-assisted treatment” as the use of medications, commonly in combination with counseling and behavioral therapy, to provide a comprehensive approach to the treatment of opioid use disorder; and it includes, but is not limited to, pharmacologic therapies with or without behavioral therapies.
    
14. Prohibits the requirements of this bill from being subject to an enrollee’s/insured’s prior success or failure with the medication-assisted treatment services provided.
    
15. States legislative intent that a person seeking treatment for opioid use disorder be provided access to covered, medically necessary, medication-assisted treatment prescription drugs in an expedited manner.
    
16. Prohibits a health plan or health insurer from denying coverage of treatment for opioid use disorder pursuant to this bill pending a determination of medical necessity.
    
17. Defines “medically necessary” as the treatment has been determined by the treating physician as meeting the medical needs of the enrollee and the treatment meets one or more of the standards for medical necessity set forth in existing IMR law.
    
18. Excludes Medi-Cal managed care plans from the definition of health plan for purposes of this bill.
    
19. Sunsets this bill on January 1, 2024.

FISCAL EFFECT:

According to the Assembly Appropriations Committee:

1. Minor costs to CDI (Insurance Fund) and costs to DMHC in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement while it is operative (until January 1, 2024).
2. According to the California Health Benefits Review Program (CHBRP): costs to CalPERS of $150,000 (General Fund/federal/special/local); (b) Increased employer-funded premium costs in the private insurance market of approximately $2.8 million; (c) Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million, and total

out-of-pocket costs of $3.3 million. CHBRP assumed in its analysis this bill only applies to opioid-related treatment.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, California, like the rest of the nation, is grappling with a serious healthcare dilemma: how to use opioid medication to relieve pain safely and effectively while at the same time reducing the risk of prescription medication misuse, addiction and overdose. As an emergency room physician, I saw the impact that opioid abuse has on families firsthand and I believe we need to reduce the availability of prescription medications that may be misused or diverted. This bill will continue to advance California in the direction of recovery, as it removes barriers to some of the most effective and innovative treatment of substance abuse disorder in medication-assisted therapy. California is leading the country in multi-year reduction of overdose deaths from prescription opioids, and now we have a chance to lead in providing critical recovery services, as well. This bill will have a direct effect in removing barriers to accessing high-quality, evidence-based care. With these measures, I hope we are able to reduce the misuse of opioids while also effectively relieving pain.
2. Opioid dependence. According to the California HealthCare Foundation (CHCF), in 2016, an estimated 5.8% of people ages 12 years and older (1,934,253 people) misused opioids in California, and 1.1% (348,193 people) had an opioid use disorder (OUD). Approximately one-fifth of those who misuse opioids have an OUD. California had 1,919 opioid overdose deaths in 2016. There are 165,977 to 245,093 people with OUD in California without local access to opioid agonist treatment (i.e. buprenorphine or methadone). The Centers for Disease Control and Prevention (CDC) estimates that the U.S. spends $52.4 billion annually on the nonmedical use of opioids, $55.7 billion on misuse and addiction, and $20.4 billion associated with overdose.
3. Medication-assisted treatment. According to the Substance Abuse and Mental Health Services Administration (SAMHSA), medicated-assisted treatment is the use of FDA- approved medications, in combination with counseling and behavioral therapies, to provide a “whole-patient” approach to the treatment of substance use disorders. In a September 2017 report, CHCF included a table to show the medications available, how they work, and how they are provided.

*Retention in treatment at 12 months with significant reduction or elimination of illicit drug use.

1. Barriers. The CHCF report identifies the following barriers to medication-assisted treatment, noting that only 10% of Americans seeking treatment can access it:
2. A shortage of primary care buprenorphine prescribers, addiction specialists, and opioid treatment programs;
3. Restrictive health plan authorization requirements;
4. Lack of sufficient behavioral health workforce;
5. Stigma (leading patients to avoid opioid treatment programs);
6. Lack of provider knowledge and training;
7. Many opioid treatment programs do not accept health insurance;
8. Many commercial plans have difficulty ensuring a network sufficient to meet demand;
9. Most health plans do not have medical, pharmacy, or care management staff knowledgeable about addiction treatments; and,
10. Privacy restrictions in the law result in challenges to coordinating care.
11. Plan recommendations and response. The 2017 CHCF report was commissioned for a health plan audience to make the case for commercial and public plans to improve access to medication-assisted treatment, as part of a broader initiative to lower opioid-related morbidity and mortality. The 2017 CHCF report indicates that plans can assess network adequacy and expand their networks to ensure better access to addiction and pain treatment, and can incentivize integration of behavioral health services. The report indicates that health plans are working to increase treatment access through multiple coordinated approaches, including: Changing formularies to promote safer opioid prescribing; Eliminating prior authorization requirements and copays for medication-assisted treatment and naloxone; Contracting with telehealth providers; Incentivizing behavioral health integration through P4P or direct grants; Providing data analytics to identify patients at risk for addiction; Training case managers to guide members to treatment; Starting care management programs for addiction; Creating dashboards to measure progress on opioid prescribing and medication-assisted treatment access, and sharing them with providers and delegated medical groups; Identifying outlier prescribers to provide education and, when appropriate, refer for fraud; and, Identifying outlier members to refer to case management.
    
12. 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, and reviewed this bill. According to CHBRP:
    1. Coverage impacts and enrollees covered. At baseline, almost all commercial enrollees have on formulary outpatient prescription coverage for the drugs, medical benefit coverage for the outpatient services, and mental health coverage for the behavioral therapy mentioned in this bill. At baseline, most enrollees have benefit coverage not subject to medical necessity review or prior authorization for medication-assisted treatment-related drugs or behavioral therapy. However, other forms of utilization management, including in-network restrictions and limits on utilization, are relevant for most enrollees and could impact utilization of medication-assisted treatment for opioid use disorder. Postmandate, all enrollees would have benefit coverage fully compliant with this bill.
    2. Essential health benefits. This bill would alter the terms and conditions of existing benefit coverage but would not require coverage for a new state benefit mandate the bill appears not to exceed the definition of EHB in California.
       
    3. Medical effectiveness. There is clear and convincing evidence that medications used to provide medication-assisted treatment for OUD are more effective than a placebo or no treatment for retention of patients in treatment, abstinence from opioids, and birth outcomes. There is a preponderance of evidence that receipt of medication reduces mortality. Depending on the outcome, there is either inconclusive or insufficient evidence to determine whether adding a structured behavioral therapy intervention to medication improves outcomes. With the exception of birth outcomes, where there is limited evidence that buprenorphine and buprenorphine-naloxone are more effective than methadone, evidence about the relative effectiveness of these medications is inconclusive. Persons with OUD have more difficulty initiating treatment with extended-release naltrexone than buprenorphine-naloxone because they must be completely detoxified from opioids before beginning treatment, but outcomes of treatment with the two medications are similar for persons who successfully initiate treatment. There is insufficient evidence to assess the impact of utilization management on use of medication to treat opioid use disorder and patient outcomes.

• 1. Utilization. CHBRP assumes that the removal of utilization management tools would result in an increase from 20% to 25% of enrollees with OUD utilizing medication-assisted treatment. CHBRP assumes that the remaining structural and attitudinal barriers would dampen use of medication-assisted treatment among the other 75% of enrollees with OUD. For new and continuing users of medication-assisted treatment, CHBRP assumes that the removal of utilization management barriers would increase use of behavioral therapy by 5% and use of naloxone (the anti-overdose medication) by 5%.
     
  2. Impact on expenditures. Although the frequency of services will increase due to new users and removal of utilization management, unit cost of services and medication-assisted treatment maintenance mediations is not anticipated to change, postmandate, However, due to the removal of utilization management related to brand-name drug use, CHBRP assumes that doses of naloxone provided to medication-assisted treatment patients will shift to greater use of auto-injectors ($4,603 per unit) and lesser use of pre-filled syringes and nasal spray ($94 per unit), which will raise the average unit cost for naloxone.
     
     The expected increases in medication-assisted treatment and related services would increase total net annual expenditures for enrollees in DMHC-regulated plans and CDI-regulated policies. The expenditure impacts include expected offsets for the decreased use of some services (such as inpatient days, emergency room visits, and imaging) expected for new users of medication-assisted treatment. Offsets related to commercial enrollees are larger due to the higher prices paid, except for services with restrictions or additional licensure requirements on suppliers like methadone and buprenorphine. This bill would increase CalPERS’ total net annual expenditures by $148,000 or 0.0027%, as the offsets applicable for other commercial enrollees newly in medication-assisted treatment for OUD would occur for some CalPERS enrollees as well.
  3. Public health. In the first year postmandate, CHBRP projects that this bill would decrease the illicit drug use, opioid overdose, overdose-related mortality, poor maternal/fetal outcomes, and HIV and hepatitis C transmission among the 9,979 new medication-assisted treatment users. The public health impact of this bill may be less than could be anticipated for several reasons including structural barriers, such as the limited number of providers. Attitudinal barriers also pose significant barriers for some patients. The nature of addiction precludes some people with OUD from recognizing their need for help as well as stigma from family, friends, and employers in acknowledging addiction and from providers recognizing opioid replacement therapy as a valid, effective treatment.
     
     The opioid epidemic across the U.S. and in California continues to grow, and CHBRP projects that the demand for medication-assisted treatment will continue as relapsed OUD patients attempt medication-assisted treatment again and first-time medication-assisted treatment initiators join the pool of patients seeking care. This bill’s removal of utilization management tools would continue to facilitate medication-assisted treatment for some number of enrollees. However, CHBRP anticipates that the medication-assisted treatment demand-supply mismatch and limited patient readiness for treatment will remain significant barriers to care.

1. Related legislation. AB 2741 (Burke) would limit all opioid prescriptions for minors to a maximum of 5 days, with exceptions, and require a prescriber to discuss risks related to opioid medication with the minor and the minor’s parent or guardian and obtain written consent prior to writing the prescription. AB 2741 is pending in the Senate Business, Professions and Economic Development Committee.
   

AB 2859 (Caballero) would increase safe storage practices among parents to prevent access to prescription drugs in the home by children and adolescents. AB 2859 is set for hearing in the Business, Professions and Economic Development Committee on June 25, 2018.

AB 2086 (Gallagher) would allow prescribers of controlled substances to review a list of patients for whom they are listed as being the prescriber. AB 2086 passed the Senate Business, Professions and Economic Development Committee by a vote of 9-0 on June 18, 2018.

AB 2486 (McCarty) would establish the Opioid Prevention and Rehabilitation Program Fund to treat opioid addiction by providing existing programs the additional funding. AB 2486 is set on June 27, 2018 in the Senate Health Committee.

AB 2760 (Wood) would require certain prescriptions for opioids to also include a co-prescription for naloxone. AB 2760 passed the Senate Business, Professions and Economic Development Committee by a vote of 8-0 on June 18, 2018.

AB 2256 (Santiago) would authorize a pharmacy or wholesaler to furnish naloxone or another opioid antagonists directly to a law enforcement agency, under specified conditions. AB 2256 is set on July 2, 2018 in the Senate Appropriations Committee.

AB 1963 (Waldron) requires DHCS to increase the Medi-Cal provider reimbursement rates by an unspecified percentage for medication-assisted treatment, buprenorphine/naloxone combination treatment, methadone treatment, and naltrexone treatments provided by certified providers, for opioid addiction. AB 1963 was held in the Assembly Appropriations Committee.

AB 2487 (McCarty) Requires every physician and surgeon to take one hour of training in medication-assisted treatment for opioid abuse disorders within six months of first receiving a federal Drug Enforcement Administration registration or within six months of their next renewal after January 1, 2019. AB 2487 is set in June 25, 2018 in the Senate Business, Professions and Economic Development Committee.

1. Prior legislation. AB 182 (Waldron of 2017) would have required the Department of Public Health (DPH) to develop, coordinate, implement, and oversee a public awareness campaign, as specified, upon appropriation or receipt of adequate state or federal funds, to educate targeted audiences about the growing heroin use and opioid medication abuse epidemic, as well as the importance and availability of services to avert addiction and to treat substance use disorders. AB 182 was held in the Senate Appropriations Committee.

AB 715 (Wood of 2017) would have required DPH to convene a workgroup for the purpose of reviewing existing guidelines and developing a recommended statewide guideline regarding the prescribing of opioid pain relievers for instances of acute, short-term pain, as specified. Would have required DPH to report to the Legislature on or before March 1, 2019, as specified, and would have sunset the bill on January 1, 2020. In his veto message the Governor stated:

“Opioid misuse and addiction is a national epidemic that has been devastating for many California communities. Since 2014, the Department of Public Health has lead the Prescription Opioid Misuse and Overdose Prevention Workgroup which is comprised of state and local agencies as well as medical and patient organizations committed to reducing opioid overdose rates in California. Furthermore, both the California Medical Board and the federal Centers for Disease Control have published updated guidelines for prescribing controlled substances for pain including opioids. For these reasons, this bill is unnecessary”.

AB 2592 (Cooper of 2016) would have created within DPH a pilot program that would award grants to eligible pharmacies for the purpose of supplying medicine locking closure packages to patients with prescriptions for opioids. AB 2592 was held on the Assembly Appropriations Committee suspense file.

AB 1977 (Wood of 2016) would have established the Opioid Abuse Task Force to develop recommendations to the Legislature regarding the abuse and misuse of opioids in California. AB 1977 passed out of this Committee by a vote of 8-0 on June 29, 2016. These provisions were amended out of AB 1977.

AB 623 (Wood of 2015) would have prohibited health care service plans or health insurers from requiring the use of opioids that have no abuse-deterrent properties; required pharmacists to provide patients who receive opioid product information about proper storage and disposal; and authorized providers to prescribe less than 30-day supplies of opioids. AB 623 was held on the Assembly Appropriations Committee suspense file.

SB 282 (Hernandez, Chapter 654, Statutes of 2015) authorizes a prescribing provider to use an electronic process to transmit prior authorization requests for prescription drugs, and modifies timeframes by which health plans and insurers (collectively referred to as "carriers") must respond to such prior authorization requests.

SB 866, (Ed Hernandez, Chapter 648, Statutes of 2011) requires DMHC and CDI to jointly develop a uniform prior authorization form that health plans and insurers must accept when prescribing providers seek authorization for prescription drug benefits.

AB 374 (Nazarian, Chapter 621, Statutes of 2015) permits an exception to a health plan or insurer’s step therapy process to be submitted in the same manner as a request for prior authorization for prescription drugs. This bill requires those requests to be treated in the same manner, and responded to by the plan or insurer in the same manner, as a prior authorization request.

AB 831 (Bloom of 2013) would have required the California Health and Human Services Agency (CHHS) to convene a temporary working group to develop a state plan to reduce the rate of fatal drug overdoses and would have appropriated $500,000 from the General Fund to CHHS to provide grants to local agencies to implement drug overdose prevention and response programs. AB 831 was held on the Assembly Appropriations Committee suspense file.

1. Support. The California Medical Association writes this bill will help to ensure that those seeking treatment for substance abuse disorders are able to receive it without long, arduous delays and waiting for health plan approval, by removing prior authorization. It will also ensure that, no matter the fate of the ACA, patients will not come to an end of their coverage, causing them to choose between continuing treatment for addiction, or losing that coverage and facing recovery without medication or physician guidance. These, and other provisions in the bill, will make sure that health plan administrative barriers do not prevent patients seeking recovery from being able to receive the outstandingly effective, FDA-approved method of treatment. The AIDS Healthcare Foundation (AHF) writes that the CDC has called attention to the fact that prescription opioids are correlative to increases HIV and STD rates. AHF has experienced this issue first hand two years ago when the State of Indiana asked AHF to intervene in a small community of 4300 residents that experienced 170 cases of HIV in eight months due to the rampant abuse of prescription opioids. This bill removes barriers for people seeking substance abuse treatment. The American Academy of Pediatrics, California advocates for increasing resources to improve access to medication-assisted treatment of opioid-addicted adolescents and young adults. Many barriers to treatment exist with existing law. People seeking medication-assisted treatment still struggle to access it and insurance utilization management policies pose a significant obstacle. This bill would remove barriers to some of the most effective and innovative treatment of opioid abuse disorders.
   
2. Opposition. America’s Health Insurance Plans and the Association of California Life and Health Insurance Companies indicate that health plans are working to address the opioid epidemic by preventing opioid misuse and abuse at the front end and by helping patients who are already addicted access the treatments they need, including medication-assisted treatment. Patients seeking medication-assisted treatment have a number of consumer protections in place under existing California and federal law. This bill would remove all prior authorization and step therapy protocols for medication-assisted treatment, contrary to industry consensus and clinical evidence. Health plans pursue effective provider incentive structures, including medical management techniques, to protect patient safety and affordability. Health plans are promoting the appropriate use of medication-assisted treatment drugs, which can interfere with other medications or potentially worsen comorbidities and working with clinicians to ensure tailed, patient-focused treatment programs are established to improve outcomes and promote adherence. This bill could expose consumers and plans sponsors to surprise out-of-network bills.
   
3. Policy comment. In an effort to address barriers in access to care to treat OUD, this bill mandates coverage of specific medications, removes utilization management tools that health plans and health insurers use, applies strict network adequacy requirements even if there is no provider within the time and distance standard, and protects patients in medication-assisted treatment, but not any other patient, from annual and lifetime limits should the ACA be repealed. There are many challenges to getting people with OUD onto, and to maintain, treatment. For their part, health plans and insurers can and should do more to ease administrative burdens that do not serve a critical clinical purpose. This bill may go to an extreme in eliminating all utilization management tools along with the other provisions that could affect the health plans’ and health insurers’ ability to manage benefits and networks.
   
4. Amendments. The author and sponsor have offered to the opposition amendments to narrow the mandated medications and clarify that either brand or generic forms of the drugs are permitted and delete the intent provisions related to medically necessary medication-assisted treatment and the definition of medical necessity.

SUPPORT AND OPPOSITION:

Support: California Medical Association (sponsor)

Aids Healthcare Foundation

Alcohol Justice

American Academy of Pediatrics, California

California Academy of Family Physicians

California Chapter of the American College or Emergency Physicians

California Council of Community Behavioral Health Agencies

County Behavioral Health Directors Association of California

Western Center on Law and Poverty

Oppose: America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

California Chamber of Commerce

Health Net

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2384

Author:(Arambula)

As Amended Ver:May 25, 2018

Majority vote

SUMMARY: Requires, until January 1, 2030, a drug formulary maintained by a health care service plan (excluding Medi-Cal managed care plans), or a health insurer to include, at a minimum, the following medication-assisted treatment (MAT) drugs approved by the United States Food and Drug Administration, as specified:

1. Buprenorphine, in both oral and injectable forms;
2. Methadone;
3. Naltrexone, in both oral and suspended release injectable forms;
4. Disulfiram;
5. Acamprosate;
6. A combination of buprenorphine and naloxone in both oral and implantable forms; and,
7. Naloxone in at least one form of administration.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Minor costs to the California Department of Insurance (Insurance Fund) and costs to DMHC in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement while it is operative (until January 1, 2024).
2. According to the California Health Benefits Review Program (CHBRP): costs to CalPERS of $150,000 (GF/federal/special/local); (b) Increased employer-funded premium costs in the private insurance market of approximately $2.8 million; (c) Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million, and total out-of-pocket costs of $3.3 million. CHBRP assumed in its analysis this bill only applies to opioid-related treatment.

COMMENTS: According to the author, California, like the rest of the nation, is grappling with a serious healthcare dilemma: how to use opioid medication to relieve pain safely and effectively while at the same time reducing the risk of prescription medication misuse, addiction and overdose. This bill will continue to advance California in the direction of recovery, as it removes barriers to some of the most effective and innovative treatment of substance abuse disorder in MAT. California is leading the country in multi-year reduction of overdose deaths from prescription opioids, and now we have a chance to lead in providing critical recovery services, as well. This bill will have a direct effect in removing barriers to accessing high-quality, evidence-based care.

The California Medical Association (CMA), sponsor of this bill, states in support that Americans seeking MAT still struggle to access it with insurance utilization management policies posing a significant obstacle. CMA writes that this bill will help to ensure that those seeking treatment for substance use disorders are able to receive it without long, arduous delays and waiting for health plan approval.

In a prior version of this bill, the California Chamber of Commerce writing in opposition contends that this bill eliminates a number of mechanisms that control costs and provide consumer protections. The California Association of Health Plans, also in opposition, states that this bill requires health plans to cover MAT in a manner that hamstrings health plans’ ability to make sound coverage policies that take into account the best clinical evidence or cost considerations.

Analysis Prepared by: Judith Babcock / HEALTH / (916) 319-2097 FN: 0003425

Date of Hearing: May 16, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2384

Author:(Arambula) – As Amended Ver:May 1, 2018

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

SUMMARY:

This bill requires health plans and insurers to cover all federally approved "medication-assisted treatment prescription drugs" for the treatment of substance use disorders and for the reversal of overdose, presumes these drugs to be medically necessary, and prohibits any utilization management such as prior authorization or step therapy.

FISCAL EFFECT:

1. Minor costs to the California Department of Insurance (Insurance Fund) and costs to DMHC in the range of $200,000 annually (Managed Care Fund) to verify and enforce health plan and insurer compliance with this requirement.
2. The California Health Benefits Review Program (CHBRP), projects this bill to have the following costs (subject to a number of narrowing assumptions discussed below):
   1. Costs to Medi-Cal managed care of $17 million (GF/federal), and costs to CalPERS of $150,000 (GF/federal/special/local).
   2. Increased employer-funded premium costs in the private insurance market of approximately $2.8 million.
   3. Increased premium expenditures by employees and individuals purchasing insurance of $1.6 million, and total out-of-pocket costs of $3.3 million.

CHBRP notes the cost impacts projected could be exponentially higher if this bill would (1) require coverage for outpatient treatment of substance use disorders other than opioid addiction (such as tobacco and alcohol), (2) affect coverage of behavioral therapy and/or naloxone that is independent of maintenance MAT medication use, (3) broadly require closed network plans/policies to cover treatments prescribed by or delivered by out-of-network providers/facilities and/or (4) directly impact coverage of inpatient treatment.

1. This bill increases state Medi-Cal costs for treatments that are currently paid for locally. Substance use treatment is carved out of Medi-Cal managed care. Pursuant to 2011 realignment, substance use treatment costs for Medi-Cal enrollees are a county obligation. This bill requires managed care plans to cover substance use treatment at state cost. Presumably this new realignment would trigger a renegotiation of state-local financing and programmatic responsibility, but as proposed, this bill simply increases state costs without any offsetting realignment savings.
2. Uncertain, significant administrative costs to the Department of Health Care Services (GF/federal). This bill mandates Medi-Cal managed care plans to cover drug treatments that are currently carved out of managed care. This is a major reorganization of drug treatment in Medi-Cal and would require a renegotiation with the federal government of two separate waivers: the waiver under which Medi-Cal beneficiaries are enrolled in managed care, and the Drug Medi-Cal-Organized Delivery System (DMC-ODS) waiver through which the counties provide drug treatment.

COMMENTS:

1. Purpose. According to the author, this bill removes barriers to some of the most effective and innovative treatment of substance abuse disorders.
2. MAT. MAT is primarily used for the treatment of addiction to opioids such as heroin and prescription pain relievers that contain opiates. The prescribed medications normalize brain chemistry, block the euphoric effects of alcohol and opioids, relieve physiological cravings, and normalize body functions without the negative effects of the abused drug. Outpatient medications include buprenephrine, combination buprenephrine-naloxone, and extended-release naltrexone, and emergency (anti-overdose) medications (naloxone). Drugs provided though the medical benefit include methadone, which is only dispensed by federally certified centers, as well as extended-release naltrexone, buprenorphrine implants, and extended-release buprenorphrine, which requires implantation or injection by a clinician. Behavioral therapy is also generally recommended and is required by federal for patients receiving treatment in opioid treatment programs, such as those that dispense methadone.
3. CHBRP Findings: According to CHBRP, there is clear and convincing evidence that medications used to provide MAT for opioid use disorders are more effective than a placebo or no treatment for retention of patients in treatment, abstinence from opioids, and birth outcomes. There is a preponderance of evidence that receipt of medication reduces mortality. Depending on the outcome, there is either inconclusive or insufficient evidence to determine whether adding a structured behavioral therapy intervention to medication improves outcomes.

CHBRP assumes that the removal of utilization management tools would result in an increase, from 20% to 25%, of enrollees with opioid use disorder utilizing MAT. CHBRP finds most plans and insurers have some type of utilization management on many drugs, but most drugs are not subject to prior authorization or other types utilization review by most plans.

1. Drug Medi-Cal (DMC). Forty counties have opted into the DMC-Organized Delivery System (DMC-ODS) federal waiver program, and ten of those counties have begun implementation of the program. This program implements an organized delivery system for diagnosis and treatment of substance use disorders within Medi-Cal. Counties that opt into the DMC-ODS waiver are required to provide additional treatments and assure access to a network of providers. All other counties are part of the DMC Program which operates as a “carve-out” of the broader Medi-Cal program. In these counties, substance use treatments are fairly limited, so requiring coverage in managed care would increase access to a range of treatments.
2. Support and Opposition. California Medical Association (CMA), sponsor of this bill, states people seeking MAT still struggle to access it and insurance utilization management policies pose a significant obstacle. The California Association of Health Plans states that this bill requires health plans to cover MAT in a manner that hamstrings health plans’ ability to make sound coverage policies that take into account the best clinical evidence or cost considerations.
3. Staff Comments. Although the state's opioid crisis makes it imperative to find solutions to facilitate drug treatment, this bill may go too far in its loosening of all restrictions for a certain class of drugs—both current and future drugs of unknown cost, clinical indications, and comparative efficacy. In addition, CHBRP made a number of assumptions that limit the estimated cost impact of this bill, but notes if the bill is interpreted differently costs could be exponentially higher.

Clinical indications differ for different drugs, and evidence suggests many prescribers lack confidence on how to correctly prescribe substance use medications. This bill restricts plans' and insurers' ability to ensure drugs are prescribed correctly. For instance, CHBRP notes extended-release naltrexone is appropriate only if a patient is completely detoxified from opioids. This bill would require an insurer to reimburse for that drug regardless of whether it was clinically appropriate for the patient. Cost is also an issue: a naloxone auto-injector is $4,600 while a spray or other injection mechanism is under $100. Removing all restrictions on the ability of plans to manage these drugs may lead to more expensive options being prescribed or available even if options are comparable in efficacy.

Many other medically necessary drugs are subject to various utilization management tools, even though they are clinically appropriate for the patient. It is unclear whether substance use treatment drugs should be treated differently. If addressing health plan and insurer protocols is of interest, the author may wish to explore a less-expansive approach that does not set a precedent of requiring categorical approval for drugs in a particular class regardless of cost or medical necessity.

Finally, this bill dramatically upends how drug treatment services are delivered through the Medi-Cal program by requiring managed care plans to cover what are in many cases duplicate treatment services currently provided by counties. The author may wish to exempt Medi-Cal managed care from the bill or address the cost and delivery system implications of this change.

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

Date of Hearing: April 24, 2018

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 2384

Author:(Arambula) – As Amended Ver:April 18, 2018

SUBJECT: Medication-assisted treatment.

SUMMARY: Requires a drug formulary maintained by a health care service plan (health plan), including a Medi-Cal managed care (MCMC) plan, or health insurer to include, at a minimum, all prescription drugs approved by the United States Food and Drug Administration (FDA) for the medication-assisted treatment (MAT), as defined, of substance use disorders (SUDs). Specifically, this bill:

1. Requires health plans, including specified MCMC plans, and health insurers that provide prescription drug benefits and maintain one or more drug formularies to include all MAT prescription drugs approved by the FDA for the treatment of SUDs.
2. Presumes MAT to be medically necessary and not subject to the following:
   1. Prior authorization;
   2. An annual or lifetime dollar limit, if federal restrictions on those limits are amended, revised, or repealed;
   3. Requirement that the enrollee or insured receives coverage at a facility that exceeds allowable time and distance standards for network adequacy, a specific number of visits, days of coverage, scope or duration of treatment, or other similar limitations;
   4. Financial requirements different than those for other illnesses covered under the health plan or health insurer; and,
   5. Step therapy, fail first policies, or other similar drug utilization strategies or policies for patients that may conflict with a prescribed course of treatment from a licensed health care professional.
3. Provides that the requirements of this bill are not subject to an enrollee or insured’s prior success or failure with MAT services provided.
4. Defines the following:
   1. MAT as the use of medications, commonly in combination with counseling and behavioral therapy, to provide a comprehensive approach to SUD treatment. Includes, but is not limited to, pharmacologic therapies with or without behavioral therapies;
   2. Pharmacologic therapy as a prescribed course of treatment that may include methadone, buprenorphine, naltrexone, or other FDA approved or evidence based medications for the treatment of SUD;
   3. Behavioral therapy as an individual, family, or group therapy designed to help a patient engage in the treatment process, modify a patient’s attitude and behaviors related to SUD, and increase healthy life skills;
   4. Medically necessary as the treatment that has been determined by the treating physician as meeting the medical needs of the enrollee or insured and the treatment meets one or more standards for medical necessity set forth in existing law; and,
   5. Financial requirements as a deductible, copayment, coinsurance, or out-of-pocket maximum.

EXISTING LAW:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans and the California Department of Insurance (CDI) to regulate health insurers.
2. Establishes the federal Patient Protection and Affordable Care Act, which enacts various health care coverage market reforms including the availability of health insurance exchanges.
3. Mandates the 10 federally required essential health benefits (EHBs) in the individual and small group market and establishes the Kaiser Small Group health plan as California’s EHB benchmark plan, including prescription drug benefits, as specified, and incorporates by reference state law and regulations related to outpatient prescription drug coverage.
4. Requires health plans that provide prescription drug benefits to provide coverage for all medically necessary outpatient drugs, except as specified.
5. Requires health plans and health insurers that provide prescription drug benefits and maintain drug formularies to post the formulary or formularies for each product offered by the health plan or health insurer on the health plan's or insurer’s website in a manner that is accessible and searchable by potential enrollees and insureds, enrollees, insureds and providers.
6. Requires DMHC and CDI to develop a standard formulary template that contains specified information by January 1, 2017. Requires health plans and health insurers to use the standard formulary template within six months of the date the template is developed by DMHC and CDI.
7. Requires health plans and health insurers to update their posted formularies with any change to those formularies on a monthly basis.
8. Requires health plans to maintain the following:
   1. Complete drug formulary or formularies, including a list of prescription drugs on the formulary of the plan by major therapeutic category with an indication of whether any drugs are preferred over other drugs;
   2. Records developed by the pharmacy and therapeutic committee of the health plan that fully describe the reasoning behind formulary decisions; and,
   3. Health plan arrangements with entities that are associated with activities of the health plan to encourage formulary compliance or otherwise manage prescription drug benefits.
9. Requires DMHC and CDI to jointly develop a uniform prior authorization form that health plans and health insurers must accept when prescribing providers seek authorization for prescription drug benefits. Requires prescribers to use the standardized prior authorization form. Provides that if a health plan or health insurer fails to utilize or accept the prior authorization form, or fails to respond within 72 hours for non-urgent requests and within 24 hours when exigent circumstances exist, the prior authorization request is deemed granted.
10. Requires health plans and health insurers offering outpatient prescription drugs in the individual, small group, or large group markets to comply with the request for exception appeal process for non-formulary drugs as described in the federal regulations.
11. Authorizes an insurer to require step therapy, as defined, when more than one drug is appropriate for the treatment of a medical condition, subject to specified requirements. Prohibits a new insurer from requiring the insured to repeat step therapy when that person is already being treated for a medical condition by a prescription drug, as specified, in instances where an insured changes policies.
12. Requires, pursuant to regulation, a plan that requires step therapy, to have an expedited process in place to authorize exceptions to step therapy when medically necessary and to conform effectively and efficiently to continuity of care requirements, as specified. Prohibits when an enrollee changes plans, the new plan from requiring the enrollee to repeat step therapy when that enrollee is already being treated for a medical condition by prescription drug that is appropriately prescribed and that is safe and effective for the enrollee’s condition. Allows a new plan to impose a prior authorization requirement. Defines “step therapy” as a type of protocol that specifies the sequence in which different prescription drugs for a given medical condition and medically appropriate for a particular patient are to be prescribed.
13. Requires health plans to disclose or provide for the disclosure the process the health plan, its contracting provider groups, or any entity with which the plan contracts for services that include utilization review or utilization management functions, uses to authorize, modify, or deny health care services under the benefits provided by the health plan, including coverage for sub-acute care, transitional inpatient care, or care provided in skilled nursing facilities. Requires health plans to disclose those processes to enrollees or persons designated by an enrollee, or to any other person or organization, upon request. Requires the criteria or guidelines used by health plans, or any entities with which plans contract for services, that include utilization review or utilization management functions, to determine whether to authorize, modify, or deny health care services to comply with all the following:
    1. Be developed with involvement from actively practicing health care providers;
    2. Be consistent with sound clinical principles and processes; and,
    3. Be evaluated, and updated if necessary, at least annually.
14. Requires health plans to demonstrate that medical decisions are rendered by qualified medical providers, unhindered by fiscal and administrative management.
15. Establishes the Independent Medical Review process as part of the DMHC or CDI appeal process.
16. Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services.
17. Establishes the Drug Medi-Cal (DMC) program that provides medically necessary SUD treatment services to eligible Medi-Cal beneficiaries for specific, approved services. Permits DHCS to enter into contracts with each county, or enter into contracts directly with certified MAT providers, for the provision of various alcohol and drug use treatment services, including SUD services.

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, “California, like the rest of the nation, is grappling with a serious healthcare dilemma: how to use opioid medication to relieve pain safely and effectively while at the same time reducing the risk of prescription medication misuse, addiction and overdose. As an emergency room physician, I saw the impact that opioid abuse has on families firsthand and I believe we need to reduce the availability of prescription medications that may be misused or diverted. AB 2348 will continue to advance California in the direction of recovery, as it removes barriers to some of the most effective and innovative treatment of substance abuse disorder in Medication Assisted Therapy. California is leading the country in multi-year reduction of overdose deaths from prescription opioids, and now we have a chance to lead in providing critical recovery services, as well. AB 2348 will have a direct effect in removing barriers to accessing high-quality, evidence-based care. With these measures, I hope we are able to reduce the misuse of opioids while also effectively relieving pain.”
2. BACKGROUND.
   1. MAT. MAT is the use of medications, in combination with counseling and behavioral therapies, to provide a “whole-patient” approach to the treatment of SUDs. Research shows that a combination of medication and therapy can successfully treat these disorders, and for some people struggling with addiction, MAT can help sustain recovery.

MAT is primarily used for the treatment of addiction to opioids such as heroin and prescription pain relievers that contain opiates. The prescribed medication operates to normalize brain chemistry, block the euphoric effects of alcohol and opioids, relieve physiological cravings, and normalize body functions without the negative effects of the abused drug. Medications used in MAT are approved by the FDA, and MAT programs are clinically driven and tailored to meet each patient’s needs.

MAT is proven to be clinically effective and to significantly reduce the need for inpatient detoxification services. MAT provides a more comprehensive, individually tailored program of medication and behavioral therapy. MAT also includes support services that address the needs of most patients. The ultimate goal of MAT is full recovery including the ability to live a self-directed life.

• 1. 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 (Ed Hernandez), Chapter 9, Statutes of 2015, added an impact assessment on essential health benefits, and legislation that impacts health insurance benefit designs, cost sharing, premiums, and other health insurance topics. CHBRP states in its analysis of the introduced version of AB 2384, the following:
     1. Enrollees covered. According to CHBRP, in 2019, 100% of the 23.4 million Californians enrolled in state-regulated health insurance, will have insurance subject to this bill.
     2. Impact on expenditures.
        1. CHBRP estimates that the expected increases in MAT and related services would increase total net annual expenditures for enrollees in DMHC-regulated plans and CDI-regulated policies. The expenditure impacts include expected offsets for the decreased use of some services (such as inpatient days, emergency room visits, and imaging) expected for new users of MAT. Offsets related to commercial enrollees are larger due to the higher prices paid (MCMC plans have been generally successful in negotiating or setting lower prices and so would see less of an offset impact on costs), except for services with restrictions or additional licensure requirements on suppliers like methadone and buprenorphine.
        2. MCMC enrollee opioid use disorder (OUD) prevalence and related use of MAT is expected to be roughly twice that of the commercially insured population and so the impacts of this bill are expected to be larger for Medi-Cal. CHBRP would expect that continuing MAT users would continue to use Drug Medi-Cal coverage, but expects that the prohibition on utilization management among MCMC plans would prompt some additional Medi-Cal enrollees to access MAT using managed care plan benefit coverage. Under this bill, Medi-Cal’s total net annual expenditures for enrollment of beneficiaries in managed care would increase by $16,932,000 or 0.0579%.
        3. The California Public Employees' Retirement System (CalPERS) total net annual expenditures would increase by $148,000 or 0.0027%, as the offsets applicable for other commercial enrollees newly in MAT for OUD would occur for some CalPERS enrollees.
        4. No measureable impact on the number of uninsured in California is projected.
     3. EHBs. As this bill would alter the terms and conditions of existing benefit coverage but would not require coverage for a new state benefit mandate, this bill does not appear to exceed the definition of EHBs in California.
     4. Medical effectiveness. According to CHBRP, there is clear and convincing evidence that medications used to provide MAT for OUD are more effective than a placebo or no treatment for retention of patients in treatment, abstinence from opioids, and birth outcomes. There is a preponderance of evidence that receipt of medication reduces mortality. Depending on the outcome, there is either inconclusive or insufficient evidence to determine whether adding a structured behavioral therapy intervention to medication improves outcomes. With the exception of birth outcomes, where there is limited evidence that buprenorphine and buprenorphine-naloxone are more effective than methadone, evidence about the relative effectiveness of these medications is inconclusive. Persons with OUD have more difficulty initiating treatment with extended-release naltrexone than buprenorphine-naloxone because they must be completely detoxified from opioids before beginning treatment, but outcomes of treatment with the two medications are similar for persons who successfully initiate treatment. There is insufficient evidence to assess the impact of utilization management on use of medication to treat OUD and patient outcomes.
     5. Benefit coverage. At baseline (existing coverage, projected to 2019), almost all commercial enrollees have on-formulary outpatient prescription drug coverage for the drugs, medical benefit coverage for the outpatient services, and mental health coverage for the behavioral therapy mentioned in this bill. Because such benefits are frequently contractually carved out (covered, instead, through DMC), few Medi-Cal beneficiaries enrolled in managed care have on-formulary outpatient prescription drug coverage for the drugs, medical benefit coverage for the outpatient services, or mental health coverage for the behavioral therapy mentioned in this bill. At baseline, most enrollees have benefit coverage not subject to medical necessity review or prior authorization for MAT-related drugs or behavioral therapy. However, other forms of utilization management, including in-network restrictions and limits on utilization, are relevant for most enrollees and could impact utilization of MAT to treat OUD. Post mandate, all enrollees would have benefit coverage fully compliant with this bill.
     6. Utilization. CHBRP assumes that the removal of utilization management tools would result in an increase from 20% to 25% of enrollees with OUD utilizing MAT. CHBRP assumes that the remaining structural and attitudinal barriers would dampen use of MAT among the other 75% of enrollees with OUD. For new and continuing users of MAT, CHBRP assumes that the removal of utilization management barriers would increase use of behavioral therapy by 5% and use of naloxone (the anti-overdose medication) by 5%.
     7. Public health. According to CHBRP, in the first year post-mandate, CHBRP projects that this bill would decrease the illicit drug use, opioid overdose, overdose-related mortality, poor maternal/fetal outcomes, and HIV and hepatitis C transmission among the 9,979 new MAT users. The public health impact of this bill may be less than could be anticipated for several reasons including structural barriers, such as the limited number of providers. Attitudinal barriers also pose significant barriers for some patients. The nature of addiction precludes some people with OUD from recognizing their need for help as well as stigma from family, friends, and employers in acknowledging addiction and from providers recognizing opioid replacement therapy as a valid, effective treatment.
     8. Long-term impacts. The opioid epidemic across the U.S. and in California continues to grow, and CHBRP projects that the demand for MAT will continue as relapsed OUD patients attempt MAT again and first-time MAT initiators join the pool of patients seeking care. This bill’s removal of utilization management tools would continue to facilitate MAT treatment for some number of enrollees. However, CHBRP anticipates that the MAT demand-supply mismatch and limited patient readiness for treatment will remain significant barriers to care.

c) Medi-Cal MAT.  Individuals eligible for Medi-Cal may obtain medication assisted treatment through the DMC-Organized Delivery System (DMC-ODS) where counties have opted in or through the DMC Program for all other counties. 40 counties have opted into the DMC-ODS and have DHCS-approved implementation plans, and 10 of those counties have begun implementation of the program. DMC-ODS is a pilot program to test a new paradigm for the organized delivery of health care services for Medicaid eligible individuals with SUD. The goal of the DMC-ODS is to demonstrate how organized SUD care improves beneficiary health outcomes, while decreasing system-wide health care costs.  Counties that opt into the DMC-ODS waiver are required to provide methadone, buprenorphine, disulfiram and naloxone in the narcotic treatment program (NTP) setting and may also offer additional MAT, such as buprenorphine and naltrexone (Vivitrol) at DMC facilities. Reimbursement rates for these services are set by contracts agreed upon by the counties and DHCS.  All other counties are part of the DMC Program which operates as a “carved-out” of the broader Medi-Cal program and is administered by DHCS and operated under federal waivers approved by the Centers for Medicine and Medicaid Services.  Authorized narcotic replacement medications are methadone, buprenorphine, naltrexone, and levo-alpha-acetylmethadol and are available to patients receiving treatment in a licensed NTP. The rates for services provided in DMC are set by DHCS.

1. SUPPORT. California Medical Association (CMA), sponsor of this bill, states that Americans seeking MAT still struggle to access it with insurance utilization management policies posing a significant obstacle. CMA writes that this bill will help to ensure that those seeking treatment for SUD are able to receive it without long, arduous delays and waiting for health plan approval.
2. OPPOSITION. The California Chamber of Commerce contends that this bill eliminates a number of mechanisms that control costs and provide consumer protections. The California Association of Health Plans states that this bill requires health plans to cover MAT in a manner that hamstrings health plans’ ability to make sound coverage policies that take into account the best clinical evidence or cost considerations.
3. RELATED LEGISLATION.
   1. AB 1963 (Waldron) requires DHCS to increase the Medi-Cal provider reimbursement rates by an unspecified percentage for MAT, buprenorphine/naloxone combination treatment, methadone treatment, and naltrexone treatments provided by certified providers, for opioid addiction. AB 1963 is pending in the Assembly Appropriations Committee.
   2. AB 2487 (McCarty) of 2018 would require the application for a physician’s and surgeon’s certificate to include proof of satisfactory completion of a course on opiate-dependent patient treatment and management and includes at least eight hours of instruction in buprenorphine treatment of opioid use disorders. AB 2487 would also require a licensed physician and surgeon to complete a continuing education course on opiate-dependent patient treatment and management. AB 2487 is pending in the Assembly Appropriations Committee.
4. PREVIOUS LEGISLATION.
   1. AB 395 (Bocanegra), Chapter 223, Statutes of 2017, added the use of MAT as an authorized service by NTPs licensed by DHCS, and made legislative findings and declarations that it is in the best interest of the health and welfare of the people of this state to also coordinate MAT for SUDs. AB 395 modified the specific controlled substances authorized for use by licensed NTPs for narcotic replacement therapy MAT to instead allow medications approved by the FDA for the purpose of narcotic replacement treatment or MAT for SUDs, and refer to medications, rather than controlled substances.
   2. SB 554 (Stone), Chapter 242, Statutes of 2017, established the buprenorphine prescribing privileges of the federal Comprehensive Addiction and Recovery Act in the Nurse Practitioner (NP) and Physician Assistants (PA) practice acts. NPs and PAs who have completed the 24 hours of required training may seek a waiver for up to 30 patients.
   3. AB 417 (Beall) of 2009 would have established a buprenorphine MAT pilot program under DMC, commencing January 1, 2011, and concluding December 31, 2016, for the purpose of determining the efficacy of buprenorphine in treating opioid addiction. AB 417 would have required all narcotic treatment programs participating in the pilot program to operate in accordance with prescribed requirements. AB 417 would also have authorized the use of buprenorphine and any other federally approved controlled substances used for the purpose of narcotic replacement treatment. AB 417 was held on the Senate Appropriations Committee suspense file.
5. TECHNICAL AMENDMENTS. Recent amendments to this bill deleted provisions with respect to MAT for the treatment of the reversal of overdose and referenced an incorrect code section when defining “medically necessary.” As such, the author wishes to amend this bill as follows:
   1. On page two, line eight, add to Section 1367.207 (a) to read:  A health care service plan that provides prescription drug benefits and maintains one or more drug formularies shall include all medication-assisted treatment prescription drugs approved by the United States Food and Drug Administration (FDA) for the treatment of substance use disorders and for the reversal of overdose.
   2. On page four, line six, revise Section 1367.207 (d)(4) to read:  “Medically necessary” means the treatment has been determined by the treating physician as meeting the medical needs of the enrollee and the treatment meets one or more of the standards for medical necessity set forth in subdivision (h) of Section 1367.01 subdivision (b) of Section 1374.33.
   3. Make parallel changes in the Insurance Code and references the definition of medically necessary in the Insurance Code. 

REGISTERED SUPPORT / OPPOSITION:

Support

California Medical Association (sponsor)

AIDS Healthcare Foundation

American Medical Association

Biocom

California Academy of Family Physicians

California Access Coalition

California Council of Community Behavioral Health Agencies

California Life Sciences Association

California Pharmacists Association

Depression and Bipolar Support Alliance

Mental Health America of California

Mental Health Center

National Health Law Program

Pharmaceutical Research and Manufacturers of America

Opposition

America’s Health Insurance Plans

Association of California Life and Health Insurance Companies

California Association of Health Plans

California Chamber of Commerce

Local Health Plans of California

Analysis Prepared by: Kristene Mapile and Judith Babcock / HEALTH / (916) 319-2097