SB 524: Health care coverage: patient steering.
- Session Year: 2021-2022
- House: Senate
- Latest Version Date: 2021-09-07
Existing law provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan, a health insurer, or the agent thereof from engaging in patient steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, or agent thereof. The bill would provide that these provisions do not apply to certain entities, including an entity that is part of a fully integrated delivery system, as specified. The bill would also make related findings and declarations.
Because a willful violation of these 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 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan, a health insurer, and a self-insured employer plan, or the agent thereof from engaging in patient steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, self-insured employer plan, or agent thereof. The bill would provide that these provisions do not apply to certain entities, including an entity that is part of a fully integrated delivery system, as specified. The bill would also make related findings and declarations.
Because a willful violation of these 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 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan, a health insurer, and a self-insured employer plan, or the agent thereof from engaging in patient steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, self-insured employer plan, or agent thereof. The bill would provide that these provisions do not apply to an entity that is part of a fully integrated delivery system, as specified. The bill would also make related findings and declarations.
Because a willful violation of these 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 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan, a health insurer, and a self-insured employer plan, or the agent thereof from engaging in patient steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, self-insured employer plan, or agent thereof. The bill would provide that these provisions do not apply to an entity that is part of a fully integrated delivery system, as specified. The bill would also make related findings and declarations.
Because a willful violation of these 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 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan, a health insurer, and a self-insured employer plan, or the agent thereof from engaging in patient steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, self-insured employer plan, or agent thereof. The bill would provide that these provisions do not apply to an entity that is part of a fully integrated delivery system, as specified. The bill would also make related findings and declarations.
Because a willful violation of these 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 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan, a health insurer, and a self-insured employer plan, or the agent thereof from engaging in patient steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, self-insured employer plan, or agent thereof. The bill would provide that these provisions do not apply to an entity that is part of a fully integrated delivery system, and as specified. The bill would also make related findings and declarations.
Because a willful violation of these provisions by a health care service plan is 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 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and the and makes the willful violation of its provisions a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan or a health insurer, including plan, a health insurer, and a self-insured employer plan, or the agent of a health care service plan or health insurer thereof from engaging in patient steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, or plans or insurers agent. self-insured employer plan, or agent thereof. The bill would provide that these provisions do not apply to a fully integrated delivery system, and would also make related findings and declarations.
Because a willful violation of these provisions by a health care service plan is 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 provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan or a health insurer, including a self-insured employer plan, or the agent of a health care service plan or health insurer from engaging in patient steering. steering, as specified. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, or plans or insurers agent. The bill would provide that these provisions do not apply to a fully integrated delivery system, and would also make related findings and declarations.
Existing law provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan contract or health insurance policy that provides coverage for outpatient prescription drugs to cover medically necessary prescription drugs.
This bill would prohibit a health care service plan or a health insurer, including a self-insured employer plan, or the agent of a health care service plan or health insurer from engaging in patient steering. The bill would define patient steering to mean communicating to an enrollee or insured that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy, as specified, or offering group health care coverage contracts or policies that include provisions that limit access to only pharmacy providers that are owned or operated by the health care service plan, health insurer, or plans or insurers agent. The bill would also make related findings and declarations.
Existing law, the Pharmacy Law, establishes the California State Board of Pharmacy in the Department of Consumer Affairs for the licensure and regulation of pharmacists and pharmacies. A violation of the Pharmacy Law is a crime. Existing law also imposes requirements on audits of pharmacy services provided to beneficiaries of a health benefit plan, as specified, and prohibits those audit provisions from being construed to suggest or imply that the department or the board has any jurisdiction or authority over those provisions.This bill would recast those audit provisions within the Pharmacy Law thereby vesting the board with administration and enforcement authority over those provisions. Because a violation of these provisions under the Pharmacy Law 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 Pharmacy Law, establishes the California State Board of Pharmacy in the Department of Consumer Affairs for the licensure and regulation of pharmacists and pharmacies. A violation of the Pharmacy Law is a crime. Existing law also imposes requirements on audits of pharmacy services provided to beneficiaries of a health benefit plan, as specified, and prohibits those audit provisions from being construed to suggest or imply that the department or the board has any jurisdiction or authority over those provisions.
This bill would recast those audit provisions within the Pharmacy Law thereby vesting the board with administration and enforcement authority over those provisions. Because a violation of these provisions under the Pharmacy Law 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.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Section 1367.44 is added to the Health and Safety Code, to read:1367.44.(a)A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health care service plan coverage provisions that limit enrollees access to only those pharmacy providers that are owned or operated by the health care service plan or plans agent, or are owned or operated by a corporate affiliate of the health care service plan or plans agent.
(c)Patient steering does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plans agent.
(d)This section does not prevent a health care service plan or the agent of a health care service plan from offering and communicating to enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(e)This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
(f)This section does not apply to a self-insured multiemployer Taft-Hartley plan or the agent of a self-insured multiemployer Taft-Hartley plan.
SEC. 3.Section 10123.66 is added to the Insurance Code, to read:10123.66.(a)A health insurer or the agent of a health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health insurance coverage provisions that limit insureds access to only those pharmacy providers that are owned or operated by the health insurer or insurers agent, or owned or operated by a corporate affiliate of the health insurer or insurers agent.
(c)Patient steering does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurers agent.
(d)This section does not prevent a health insurer or the agent of a health insurer from offering and communicating to insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
(e)This section does not apply to a health insurer that uses as its provider network the network of its affiliated health care service plan that is part of a fully integrated delivery system in which insureds primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans insureds may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
(f)This section does not apply to a self-insured multiemployer Taft-Hartley plan or the agent of a self-insured multiemployer Taft-Hartley plan.
SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A self-insured employer plan or the agent of a self-insured employer plan shall not engage in patient steering.(b)Patient steering means either of the following:(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the self-insured employer plan or self-insured employer plans agent, or owned or operated by a corporate affiliate of the self-insured employer plan or self-insured employer plans agent.(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the self-insured employer plan or self-insured employer plans agent.(d)This chapter does not prevent a self-insured employer plan or the agent of a self-insured employer plan from offering and communicating to enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.(e)This chapter does not apply to a self-insured employer plan administered by a health care service plan or its health insurer affiliate that is part of a fully integrated delivery system in which enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, primarily use pharmacies that are entirely owned and operated by the health care service plan and the enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, may use any pharmacy in the self-insured employer plans network that has the ability to dispense the medication or provide the services.SEC. 3.SEC. 2.Section 1367.44 is added to the Health and Safety Code, to read:1367.44.(a)A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health care service plan coverage provisions that limit enrollees access to only those pharmacy providers that are owned or operated by the health care service plan or plans agent, or are owned or operated by a corporate affiliate of the health care service plan or plans agent.
(c)Patient steering does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plans agent.
(d)This section does not prevent a health care service plan or the agent of a health care service plan from offering and communicating to enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(e)This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
(f)This section does not apply to a self-insured multiemployer Taft-Hartley plan or the agent of a self-insured multiemployer Taft-Hartley plan.
SEC. 4.SEC. 3.Section 10123.66 is added to the Insurance Code, to read:10123.66.(a)A health insurer or the agent of a health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health insurance coverage provisions that limit insureds access to only those pharmacy providers that are owned or operated by the health insurer or insurers agent, or owned or operated by a corporate affiliate of the health insurer or insurers agent.
(c)Patient steering does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurers agent.
(d)This section does not prevent a health insurer or the agent of a health insurer from offering and communicating to insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
(e)This section does not apply to a health insurer that uses as its provider network the network of its affiliated health care service plan that is part of a fully integrated delivery system in which insureds primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans insureds may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
(f)This section does not apply to a self-insured multiemployer Taft-Hartley plan or the agent of a self-insured multiemployer Taft-Hartley plan.
SEC. 5.SEC. 4.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A self-insured employer plan or the agent of a self-insured employer plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the self-insured employer plan or self-insured employer plans agent, or owned or operated by a corporate affiliate of the self-insured employer plan or self-insured employer plans agent.
(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the self-insured employer plan or self-insured employer plans agent.
(d)(1)This chapter does not prevent a self-insured employer plan or the agent of a self-insured employer plan from offering and communicating to enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.
(2)Notwithstanding paragraph (1), a self-insured employer plan or the agent of a self-insured employer plan shall not prohibit an in-network pharmacy from offering to match the financial incentives offered to an insured of the self-insured employer by the self-insured employer plan or its agent, as set forth in this subdivision.(e)This chapter does not apply to a self-insured employer plan administered by a health care service plan or its health insurer affiliate that is part of a fully integrated delivery system in which enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, primarily use pharmacies that are entirely owned and operated by the health care service plan and the enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, may use any pharmacy in the self-insured employer plans network that has the ability to dispense the medication or provide the services.
SEC. 3.Section 1367.44 is added to the Health and Safety Code, to read:1367.44.(a)A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health care service plan coverage provisions that limit enrollees access to only those pharmacy providers that are owned or operated by the health care service plan or plans agent, or are owned or operated by a corporate affiliate of the health care service plan or plans agent.
(c)Patient steering does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plans agent.
(d)(1)This section does not shall prevent a health care service plan or the agent of a health care service plan from offering and communicating to enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(2)Notwithstanding paragraph (1), a health care service plan or the agent of a health care service plan shall not prohibit an in-network pharmacy from offering to match the incentives offered to an enrollee of the health care service plan by the health care service plan or its agent, as set forth in this section.(e)This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 4.Section 10123.66 is added to the Insurance Code, to read:10123.66.(a)A health insurer or the agent of a health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health insurance coverage provisions that limit insureds access to only those pharmacy providers that are owned or operated by the health insurer or insurers agent, or owned or operated by a corporate affiliate of the health insurer or insurers agent.
(c)Patient steering does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurers agent.
(d)(1)This section does not shall prevent a health insurer or the agent of a health insurer from offering and communicating to insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
(2)Notwithstanding paragraph (1), a health insurer or the agent of a health insurer shall not prohibit an in-network pharmacy from offering to match the incentives offered to an insured of the health insurer by the health insurer or its agent, as set forth in this section.(e)This section does not apply to a health insurer that uses as its provider network the network of its affiliated health care service plan that is part of a fully integrated delivery system in which insureds primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans insureds may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A self-insured employer plan or the agent of a self-insured employer plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the self-insured employer plan or self-insured employer plans agent, or owned or operated by a corporate affiliate of the self-insured employer plan or self-insured employer plans agent.
(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the self-insured employer plan or self-insured employer plans agent.
(d)Nothing in this chapter shall(d)(1)This chapter does not prevent a self-insured employer plan or the agent of a self-insured employer plan from offering enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.
(2)Notwithstanding paragraph (1), a self-insured employer plan or the agent of a self-insured employer plan shall not prohibit an in-network pharmacy from offering to match the financial incentives offered to an insured of the self-insured employer by the self-insured employer plan or its agent, as set forth in this subdivision.
(e)This chapter does not apply to a self-insured employer plan administered by a health care service plan or its health insurer affiliate that is part of a fully integrated delivery system in which enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, primarily use pharmacies that are entirely owned and operated by the health care service plan and the enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, may use any pharmacy in the self-insured employer plans network that has the ability to dispense the medication or provide the services.
SEC. 3.Section 1367.44 is added to the Health and Safety Code, to read:1367.44.(a)A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health care service plan coverage provisions that limit enrollees access to only those pharmacy providers that are owned or operated by the health care service plan or plans agent, or are owned or operated by a corporate affiliate of the health care service plan or plans agent.
(c)Patient steering does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plans agent.
(d)Nothing in this section(d)(1)This section does not shall prevent a health care service plan or the agent of a health care service plan from offering enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(2)Notwithstanding paragraph (1), a health care service plan or the agent of a health care service plan shall not prohibit an in-network pharmacy from offering to match the incentives offered to an enrollee of the health care service plan by the health care service plan or its agent, as set forth in this section.
(e)This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 4.Section 10123.66 is added to the Insurance Code, to read:10123.66.(a)A health insurer or the agent of a health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of health insurance coverage provisions that limit insureds access to only those pharmacy providers that are owned or operated by the health insurer or insurers agent, or owned or operated by a corporate affiliate of the health insurer or insurers agent.
(c)Patient steering does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurers agent.
(d)Nothing in this section(d)(1)This section does not shall prevent a health insurer or the agent of a health insurer from offering insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
(2)Notwithstanding paragraph (1), a health insurer or the agent of a health insurer shall not prohibit an in-network pharmacy from offering to match the incentives offered to an insured of the health insurer by the health insurer or its agent, as set forth in this section.
(e)This section does not apply to a health insurer that uses as its provider network the network of its affiliated health care service plan that is part of a fully integrated delivery system in which insureds primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans insureds may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A self-insured employer plan or the agent of a self-insured employer plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the self-insured employer plan or self-insured employer plans agent, or owned or operated by a corporate affiliate of the self-insured employer plan or self-insured employer plans agent.
(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the self-insured employer plan or self-insured employer plans agent.
(d)Nothing in this chapter shall prevent a self-insured employer plan or the agent of a self-insured employer plan from offering enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.
(e)This chapter does not apply to a self-insured employer plan administered by a health care service plan or its health insurer affiliate that is part of a fully integrated delivery system in which enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, primarily use pharmacies that are entirely owned and operated by the health care service plan and the enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, may use any pharmacy in the self-insured employer plans network that has the ability to dispense the medication or provide the services.
SEC. 3.Section 1367.44 is added to the Health and Safety Code, to read:1367.44.(a)A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care health care service plan coverage provisions that limit enrollees access to only those pharmacy providers that are owned or operated by the health care service plan or plans agent, or are owned or operated by a corporate affiliate of the health care service plan or plans agent.
(c)Patient steering does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plans agent.
(d)Nothing in this section shall prevent a health care service plan or the agent of a health care service plan from offering enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(e)This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 4.Section 10123.66 is added to the Insurance Code, to read:10123.66.(a)A health insurer or the agent of a health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care health insurance coverage provisions that limit insureds access to only those pharmacy providers that are owned or operated by the health insurer or insurers agent, or owned or operated by a corporate affiliate of the health insurer or insurers agent.
(c)Patient steering does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurers agent.
(d)Nothing in this section shall prevent a health insurer or the agent of a health insurer from offering insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
(e)This section does not apply to a health insurer that uses as its provider network the network of its affiliated health care service plan that is part of a fully integrated delivery system in which enrollees insureds primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees insureds may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A self-insured employer plan or the agent of a self-insured employer plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the self-insured employer plan or self-insured employer plans agent, or owned or operated by a corporate affiliate of the self-insured employer plan or self-insured employer plans agent.
(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the self-insured employer plan or self-insured employer plans agent.
(d)Nothing in this chapter shall prevent a self-insured employer plan or the agent of a self-insured employer plan from offering enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.
(e)This chapter does not apply to a self-insured employer plan or its health insurer affiliate that is part of a fully integrated delivery system where enrollees or insureds primarily use pharmacies that are entirely owned and operated by the self-insured employer plan, and the self-insured employer plans enrollees or insureds may use any pharmacy in the self-insured employer plans network that has the ability to dispense the medication or provide the services.(e)This chapter does not apply to a self-insured employer plan administered by a health care service plan or its health insurer affiliate that is part of a fully integrated delivery system in which enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, primarily use pharmacies that are entirely owned and operated by the health care service plan and the enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, may use any pharmacy in the self-insured employer plans network that has the ability to dispense the medication or provide the services.
SEC. 3.Section 1367.44 is added to the Health and Safety Code, to read:1367.44.(a)A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees access to only those pharmacy providers that are owned or operated by the health care service plan or plans agent, or are owned or operated by a corporate affiliate of the health care service plan or plans agent.
(c)Patient steering does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plans agent.
(d)Nothing in this section shall prevent a health care service plan or the agent of a health care service plan from offering enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(e)This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 4.Section 10123.66 is added to the Insurance Code, to read:10123.66.(a)A health insurer or the agent of a health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit insureds access to only those pharmacy providers that are owned or operated by the health insurer or insurers agent, or owned or operated by a corporate affiliate of the health insurer or insurers agent.
(c)Patient steering does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurers agent.
(d)Nothing in this section shall prevent a health insurer or the agent of a health insurer from offering insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
(e)This section does not apply to a health insurer that uses as its provider network the network of its affiliated health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A health care service plan or a health insurer, including a A self-insured employer plan, plan or the agent of a health care service plan or health insurer self-insured employer plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the health care service plan, health insurer, or plans or insurers agent, self-insured employer plan or self-insured employer plans agent, or owned or operated by a corporate affiliate of the health care service plan, health insurer, or plans or insurers agent. self-insured employer plan or self-insured employer plans agent.
(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan, health insurer, or plans or insurers agent. self-insured employer plan or self-insured employer plans agent.
(d)Nothing in this chapter shall prevent a health care service plan, or health insurer, including a self-insured employer plan, plan or the agent of a health care service plan or health insurer self-insured employer plan from offering enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.
(e)This chapter does not apply to a health care service plan self-insured employer plan or its health insurer affiliate that is part of a fully integrated delivery system where enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, enrollees or insureds primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, self-insured employer plan, and the self-insured employer plans enrollees or insureds may use any pharmacy in the health care service plans self-insured employer plans network that has the ability to dispense the medication or provide the services.
SEC. 3.Section 1367.44 is added to the Health and Safety Code, to read:1367.44.(a)A health care service plan or the agent of a health care service plan shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee, verbally, electronically, or in writing, that the enrollee is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees access to only those pharmacy providers that are owned or operated by the health care service plan or plans agent, or are owned or operated by a corporate affiliate of the health care service plan or plans agent.
(c)Patient steering does not include directing an enrollee to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan or plans agent.
(d)Nothing in this section shall prevent a health care service plan or the agent of a health care service plan from offering enrollees financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee when the prescription is dispensed.
(e)This section does not apply to a health care service plan that is part of a fully integrated delivery system in which enrollees primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
SEC. 4.Section 10123.66 is added to the Insurance Code, to read:10123.66.(a)A health insurer or the agent of a health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an insured, verbally, electronically, or in writing, that the insured is required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit insureds access to only those pharmacy providers that are owned or operated by the health insurer or insurers agent, or owned or operated by a corporate affiliate of the health insurer or insurers agent.
(c)Patient steering does not include directing an insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health insurer or insurers agent.
(d)Nothing in this section shall prevent a health insurer or the agent of a health insurer from offering insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the insured when the prescription is dispensed.
SEC. 5.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A health care service plan or a health insurer, including a self-insured employer plan, or the agent of a health care service plan or health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the health care service plan, health insurer, or plans or insurers agent, or owned or operated by a corporate affiliate of the health care service plan, health insurer, or plans or insurers agent.
(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan, health insurer, or plans or insurers agent.
(d)Nothing in this chapter shall prevent a health care service plan, or health insurer, including a self-insured employer plan, or the agent of a health care service plan or health insurer from offering enrollees or insureds financial incentives to use a particular pharmacy, including, but not limited to, reductions in copays or other financial incentives given to the enrollee or insured when the prescription is dispensed.
(e)This chapter does not apply to a health care service plan that is part of a fully integrated delivery system where enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, primarily use pharmacies that are entirely owned and operated by the health care service plan, and the plans enrollees, including enrollees in a self-insured employer plan administered by the health care service plan or its health insurer affiliate, may use any pharmacy in the health care service plans network that has the ability to dispense the medication or provide the services.
The Legislature finds and declares all of the following:
(a)When a health care service plan, health insurer, or pharmacy benefit manager requires a patient to use a specific pharmacy provider for services that otherwise could be provided by any pharmacy in the provider network, it unjustifiably limits patient choice and may put the patients health at risk.
(b)Evidence shows that limiting access to pharmacy providers is designed to eliminate competition and can result in higher costs for the patient and for the health care system as a whole. It can result in patients losing connection with trusted providers and being unable to get the advice and consultation they need.
(c)Therefore, it is necessary to limit the practice of patient steering, used by some health care service plans and health insurers, and their contracted pharmacy benefit managers, to those situations when it is used for established clinical or logistical reasons, and not for financial benefit to the plan or insurer, or their agents.
SEC. 2.Chapter 9.6 (commencing with Section 4450) is added to Division 2 of the Business and Professions Code, to read:9.6.Patient Steering4450.(a)A health care service plan or a health insurer, including a self-insured employer plan, or the agent of a health care service plan or health insurer shall not engage in patient steering.
(b)Patient steering means either of the following:
(1)Communicating to an enrollee or insured, verbally, electronically, or in writing, that they are required to have a prescription dispensed at, or pharmacy services provided by, a particular pharmacy or pharmacies if there are other pharmacies in the network that have the ability to dispense the medication or provide the services.
(2)Offering or including in contract or policy designs for purchasers of group health care coverage provisions that limit enrollees or insureds access to only those pharmacy providers that are owned or operated by the health care service plan, health insurer, or plans or insurers agent, or owned or operated by a corporate affiliate of the health care service plan, health insurer, or plans or insurers agent.
(c)Patient steering does not include directing an enrollee or insured to a specific pharmacy for a specific prescription due to the need for special handling or clinical requirements that cannot be performed by other pharmacies in the provider network of the health care service plan, health insurer, or plans or insurers agent.
SECTION 1.The heading of Chapter 9.5 (commencing with Section 4430) of Division 2 of the Business and Professions Code is repealed.SEC. 2.The heading of Article 26 (commencing with Section 4430) is added to Chapter 9 of Division 2 of the Business and Professions Code, to read:26.Audits of Pharmacy BenefitsSEC. 3.Section 4430 of the Business and Professions Code is amended to read:4430.For purposes of this article, the following definitions shall apply:(a)Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.(b)Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.(c)Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.(d)Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.(e)Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.(f)Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.(g)Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.(h)Pharmacy has the same meaning as provided in Section 4037.(i)Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.(j)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.SEC. 4.Section 4431 of the Business and Professions Code is amended to read:4431.(a)This article does not apply to an audit conducted because a pharmacy benefit manager, carrier, health benefit plan sponsor, or other third-party payer has indications that support a reasonable suspicion that criminal wrongdoing, willful misrepresentation, fraud, or abuse has occurred.(b)This article does not apply to an audit conducted by, or at the direction of, the California State Board of Pharmacy, the State Department of Health Care Services, the State Department of Public Health, or the Medicare program.SEC. 5.Section 4432 of the Business and Professions Code is amended to read:4432.Notwithstanding any other law, a contract that is issued, amended, or renewed on or after January 1, 2013, between a pharmacy and a carrier or a pharmacy benefit manager to provide pharmacy services to beneficiaries of a health benefit plan shall comply with the provisions of this article. This article does not apply to contracts authorized by Section 4600.2 of the Labor Code.SEC. 6.Section 4439 of the Business and Professions Code is amended to read:4439.This article shall not be construed to suggest or imply that the Department of Consumer Affairs has any jurisdiction or authority over the provisions of this article.SEC. 7.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.For purposes of this chapter, article, the following definitions shall apply:
(a)Carrier means a health care service plan, as defined in Section 1345 of the Health and Safety Code, or a health insurer that issues policies of health insurance, as defined in Section 106 of the Insurance Code.
(b)Clerical or recordkeeping error includes a typographical error, scriveners error, or computer error in a required document or record.
(c)Extrapolation means the practice of inferring a frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors on any portion of claims submitted, based on the frequency or dollar amount of overpayments, underpayments, nonvalid claims, or other errors actually measured in a sample of claims.
(d)Health benefit plan means any plan or program that provides, arranges, pays for, or reimburses the cost of health benefits. Health benefit plan includes, but is not limited to, a health care service plan contract issued by a health care service plan, as defined in Section 1345 of the Health and Safety Code, and a policy of health insurance, as defined in Section 106 of the Insurance Code, issued by a health insurer.
(e)Maximum allowable cost means the maximum amount that a pharmacy benefit manager will reimburse a pharmacy for the cost of a drug.
(f)Maximum allowable cost list means a list of drugs for which a maximum allowable cost has been established by a pharmacy benefit manager.
(g)Obsolete means a drug that may be listed in national drug pricing compendia but is no longer available to be dispensed based on the expiration date of the last lot manufactured.
(h)Pharmacy has the same meaning as provided in Section 4037.
(i)Pharmacy audit means an audit, either onsite or remotely, of any records of a pharmacy conducted by or on behalf of a carrier or a pharmacy benefits manager, or a representative thereof, for prescription drugs that were dispensed by that pharmacy to beneficiaries of a health benefit plan pursuant to a contract with the health benefit plan or the issuer or administrator thereof. Pharmacy audit does not include a concurrent review or desk audit that occurs within three business days of transmission of a claim, or a concurrent review or desk audit if a chargeback or recoupment is not demanded.
(j)Pharmacy benefit manager means a person, business, or other entity that, pursuant to a contract or under an employment relationship with a carrier, health benefit plan sponsor, or other third-party payer, either directly or through an intermediary, manages the prescription drug coverage provided by the carrier, plan sponsor, or other third-party payer, including, but not limited to, the processing and payment of claims for prescription drugs, the performance of drug utilization review, the processing of drug prior authorization requests, the adjudication of appeals or grievances related to prescription drug coverage, contracting with network pharmacies, and controlling the cost of covered prescription drugs.
SEC. 4.Section 4431 of the Business and Professions Code is amended to read:4431.(a)Nothing in this chapter shall This article does not apply to an audit conducted because a pharmacy benefit manager, carrier, health benefit plan sponsor, or other third-party payer has indications that support a reasonable suspicion that criminal wrongdoing, willful misrepresentation, fraud, or abuse has occurred.
(b)Nothing in this chapter shall This article does not apply to an audit conducted by, or at the direction of, the California State Board of Pharmacy, the State Department of Health Care Services, the State Department of Public Health, or the Medicare program.
SEC. 5.Section 4432 of the Business and Professions Code is amended to read:4432.Notwithstanding any other law, a contract that is issued, amended, or renewed on or after January 1, 2013, between a pharmacy and a carrier or a pharmacy benefit manager to provide pharmacy services to beneficiaries of a health benefit plan shall comply with the provisions of this chapter. article. This chapter shall article does not apply to contracts authorized by Section 4600.2 of the Labor Code.
SEC. 6.Section 4439 of the Business and Professions Code is amended to read:4439.This chapter article shall not be construed to suggest or imply that the Department of Consumer Affairs or the California State Board of Pharmacy has any jurisdiction or authority over the provisions of this chapter. article.
SEC. 7.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
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Date
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Status
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|---|---|
| Jan 27, 2022 | Stricken from file. |
| Oct 8, 2021 | In Senate. Consideration of Governor's veto pending. |
| Oct 8, 2021 | Vetoed by the Governor. |
| Sep 9, 2021 | Enrolled and presented to the Governor at 1 p.m. |
| Sep 3, 2021 | Assembly amendments concurred in. (Ayes 35. Noes 0. Page 2378.) Ordered to engrossing and enrolling. |
| Sep 2, 2021 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 2, 2021 | Read third time. Passed. (Ayes 57. Noes 7. Page 2734.) Ordered to the Senate. |
| Aug 31, 2021 | Read second time. Ordered to third reading. |
| Aug 30, 2021 | Read second time and amended. Ordered to second reading. |
| Aug 26, 2021 | From committee: Do pass as amended. (Ayes 13. Noes 3.) (August 26). |
| Aug 19, 2021 | August 19 set for first hearing. Placed on suspense file. |
| Jul 7, 2021 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 6, 2021 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 15. Noes 1.) (July 6). |
| Jun 28, 2021 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on B. & P. |
| Jun 23, 2021 | From committee: Do pass and re-refer to Com. on B. & P. (Ayes 11. Noes 1.) (June 22). Re-referred to Com. on B. & P. |
| Jun 14, 2021 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on HEALTH. |
| May 28, 2021 | Referred to Coms. on HEALTH and B. & P. |
| May 24, 2021 | In Assembly. Read first time. Held at Desk. |
| May 24, 2021 | Read third time. Passed. (Ayes 39. Noes 0. Page 1232.) Ordered to the Assembly. |
| May 20, 2021 | From committee: Do pass. (Ayes 6. Noes 0. Page 1195.) (May 20). |
| May 18, 2021 | Set for hearing May 20. |
| May 17, 2021 | May 17 hearing: Placed on APPR suspense file. |
| May 7, 2021 | Set for hearing May 17. |
| May 3, 2021 | Read second time and amended. Re-referred to Com. on APPR. |
| Apr 29, 2021 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 10. Noes 0. Page 956.) (April 28). |
| Apr 19, 2021 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on HEALTH. |
| Apr 15, 2021 | Set for hearing April 28. |
| Apr 13, 2021 | Read second time and amended. Re-referred to Com. on HEALTH. |
| Apr 12, 2021 | From committee: Do pass as amended and re-refer to Com. on HEALTH. (Ayes 11. Noes 0. Page 670.) (April 5). |
| Mar 16, 2021 | Set for hearing April 5. |
| Mar 15, 2021 | March 22 set for first hearing canceled at the request of author. |
| Mar 11, 2021 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on B., P. & E.D. |
| Mar 11, 2021 | Set for hearing March 22. |
| Feb 25, 2021 | Referred to Coms. on B., P. & E.D. and HEALTH. |
| Feb 22, 2021 | Art. IV. Sec. 8(a) of the Constitution dispensed with. |
| Feb 18, 2021 | From printer. May be acted upon on or after March 20. |
| Feb 17, 2021 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| Sep 3, 2021 | Unfinished Business SB524 Skinner et al. Concurrence | Senate Floor |
Passed |
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| Sep 2, 2021 | SB 524 Skinner Senate Third Reading By Arambula | Assembly Floor |
Passed |
|
| May 24, 2021 | Senate 3rd Reading SB524 Skinner | Senate Floor |
Passed |
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