Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law generally authorizes a health care service plan or health insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law also prohibits a health care service plan that covers prescription drug benefits from limiting or excluding coverage for a drug that was previously approved for coverage if an enrollee continues to be prescribed that drug, as specified.

The bill would authorize a licensed health care professional to request, and would require that they be granted, the authority to adjust the dose or frequency of a drug to meet the specific medical needs of the enrollee or insured without prior authorization if specified conditions are met. Under the bill, if the enrollee or insured has been continuously using a prescription drug selected by their prescribing provider for the medical condition under consideration while covered by their current or previous health coverage, the health care service plan or health insurance policy would be prohibited from limiting or excluding coverage of that prescription. With respect to health care service plans, the bill would specify that its provisions do not apply to Medi-Cal managed care plan contracts. 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, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care, and makes a willful violation of the act a crime. Existing law provides for the regulation of health insurers by the Department of Insurance. Existing law generally authorizes a health care service plan or health insurer to use utilization review, under which a licensed physician or a licensed health care professional who is competent to evaluate specific clinical issues may approve, modify, delay, or deny requests for health care services based on medical necessity. Existing law also prohibits a health care service plan that covers prescription drug benefits from limiting or excluding coverage for a drug that was previously approved for coverage if an enrollee continues to be prescribed that drug, as specified.

The bill would authorize a licensed health care professional to request, and would require that they be granted, the authority to adjust the dose or frequency of a drug to meet the specific medical needs of the enrollee or insured without prior authorization if specified conditions are met. Under the bill, if the enrollee or insured has been continuously using a prescription drug selected by their prescribing provider for the medical condition under consideration while covered by their current or previous health coverage, the health care service plan or health insurance policy would be prohibited from limiting or excluding coverage of that prescription. With respect to health care service plans, the bill would specify that its provisions do not apply to Medi-Cal managed care plan contracts. 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.

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2169 (Bauer-Kahan) - Prescription drug coverage: dose adjustments

Bill Summary:

AB 2169 would provide that a licensed health care professional may request, and must be granted, the authority to adjust the dose or frequency of a drug without prior authorization or subsequent utilization management if specified conditions are met.

Fiscal Impact:

• The Department of Managed Health Care (DMHC) estimates costs of approximately $24,000 in 2024-25, $1,488,000 in 2025-26, $2,084,000 in 2026-27, $2,085,000 in 2027-28, and $2,101,000 in 2028-29 and annually thereafter for state administration (Managed Care Fund).
• The California Department of Insurance (CDI) indicates that if the bill is enacted after regulations have been promulgated, then one-time costs would be $70,000 in 2024-25 and $80,000 in 2025-26 for state administration (Insurance Fund).

Background:

The DMHC regulates health plans under the Knox-Keene Act and the CDI regulates health insurance. Prior authorization is when the health plan/insurer or pharmacy benefit manager must authorize a particular prescription before it can be filled. Step therapy is a type of prior authorization for drugs that begins medication for a medical condition with the most preferred drug therapy and progresses to other therapies only if necessary. Prior authorization also may be used in conjunction with a step therapy system, so that a patient might be required to try a less expensive drug before receiving authorization to receive the drug originally requested. State law permits, if there is more than one drug that is clinically appropriate for the treatment of a medical condition, a health plan or insurer that provides coverage for prescription drugs to require step therapy.

If a health plan or insurer that provides coverage for prescription drugs fails to respond to a prior authorization or step therapy exception request within 72 hours for non-urgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed form, the request is deemed granted. Current law also requires a health plan or insurer to expeditiously grant a request for a step therapy exception if the provider submits the necessary justification and clinical detail, as specified.

Proposed Law:

Specific provisions of the bill would:

• Provide that a licensed health care professional may request, and must be granted by the health plan/insurer, the authority to adjust the dose or frequency of a drug to meet the specific medical needs of the enrollee/insured without prior authorization or subsequent utilization management if the following conditions are met:
  • The drug previously had been approved for coverage by the plan/insurer for an enrollee’s/insured’s chronic medical condition or cancer treatment and the plan’s/insurer’s prescribing provider continues to prescribe the drug for the enrollee’s/insured’s chronic medical condition or cancer treatment.
  • The drug is not an opioid or a scheduled controlled substance.
  • The dose has not been adjusted more than two times without prior authorization.
• Require that if the enrollee/insured has been continuously using a prescription drug selected by the enrollee’s/insured’s prescribing provider for the medical condition under consideration while covered by their current or previous health coverage, the health plan/insurer cannot limit or exclude coverage of that prescription.
• Exempt Medi-Cal managed care plans.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Richard Roth, Chair

BILL NO: AB 2169

SUBJECT: Prescription drug coverage: dose adjustments.

SUMMARY:

Authorizes a licensed health care professional to adjust the dose or frequency of a drug to meet the specific medical needs of an enrollee or insured without prior authorization or subsequent utilization management, no more than two times, if the drug has previously been approved for coverage by the plan or insurer and the prescribing provider continues to prescribe the drug. Prohibits a health plan or insurer from limiting or excluding coverage if the enrollee or insured has been continuously using a prescription drug selected by the prescribing provider for the medical condition while covered by their current or previous health coverage.

Existing law:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 (Knox-Keene Act); California Department of Insurance (CDI) to regulate health and other insurance; and, the Department of Health Care Services (DHCS) to administer the Medi-Cal program. [HSC §1340, et seq., INS §106, et seq., and WIC §14000, et seq.]
   
2. Prohibits a health plan contract from limiting or excluding coverage for a drug for an enrollee if the drug previously had been approved for coverage by the plan for an enrollee’s medical condition and the plan’s prescribing provider continues to prescribe the drug for the medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s condition. This does not: preclude the prescriber from prescribing another covered drug that is medically appropriate or a generic substitution; apply to off-label use of drugs; or, prohibit a health plan/insurer from charging a copayment or a deductible or from setting forth, by contract, limitations on maximum coverage of prescription drug benefits. [HSC §1367.22]
   
3. Requires health plans to maintain an expeditious process by which the prescribing provider may obtain authorization for a medically necessary nonformulary prescription drug. [HSC §1367.24]
   
4. Requires health plans to establish and maintain a system approved by DMHC under which enrollees may submit grievances to the plan. Requires a plan’s response to also comply with federal requirements. [HSC §1368]
5. Establishes an Independent Medical Review (IMR) process, under which enrollee and insured grievances involving a disputed health care service are eligible for review. Defines “disputed health care service” as any health care service eligible for coverage and payment under the contract that has been denied, modified, or delayed by a decision of the plan/insurer, or contracting provider, in whole or in part due to a finding that the service is not medically necessary. [HSC §1374.30 and INS §10169]
   
6. Establishes a process for expeditiously reviewing IMR requests related to imminent and serious threat to the enrollee. [HSC §1374.31 and INS §10169.1]
   
7. Requires, if a health plan or insurer that provides coverage for prescription drugs or a contracted physicians group fails to respond to a prior authorization or step therapy exception request, within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed request form, the request to be deemed granted. [HSC §1367.241 and INS §10123.191]
   
8. Requires a health plan or insurer to expeditiously grant a request for a step therapy exception within the time limits described in 7) above if the provider submits the necessary justification and clinical detail, as specified, when the enrollee or insured is stable on a prescription drug selected by the prescribing provider for the medical condition under consideration while covered by their current or previous health coverage or Medicaid. [HSC §1367.206(b)(5) and INS §10123.201(c)(2)(B)(v)]

This bill:

1. Authorizes a licensed health care professional to request, and requires the request to be granted, to adjust the dose or frequency of a drug to meet specific medical needs of an enrollee or insured without prior authorization or subsequent utilization management if the following conditions are met:
   1. The drug previously had been approved for coverage by the plan/insurer for an enrollee’s or insured’s chronic medical condition or cancer treatment and the prescribing provider continues to prescribe the drug for the chronic medical condition or cancer treatment;
   2. The drug is not an opioid or a scheduled controlled substance; and,
   3. The dose has not been adjusted more than two times without prior authorization.
2. Prohibits a health plan or insurer from limiting or excluding coverage if the enrollee or insured has been continuously using the prescription drug selected by the prescribing provider for the medical condition under consideration while covered by their current or previous health coverage.
3. Exempts Medi-Cal managed care plans contracting with DHCS, as specified.

FISCAL EFFECT:

According to the Assembly Appropriations Committee:

• DMHC estimates its cost for this bill to be approximately $24,000 in fiscal year (FY) 2024-25, $1.5 million in FY 2025-26, and $2.1 million in FY 2026-27 and annually thereafter (Managed Care Fund). DMHC states it anticipates additional workload to conduct independent medical reviews, revise survey methodology and develop tools to monitor compliance, review health plan filings of utilization management processes, and provide guidance to health plans. Additional costs include clinical and statistical consultants and software licensing. DMHC assumes the Office of Enforcement would need to address eleven referrals annually as a result of this bill. DMHC notes that generally, and depending on final enrollment data, a $1 million dollar increase to the Managed Care Fund could result in a 2-cent per month increase per enrollee on assessments to full-service health plans and a 1-cent increase per enrollee to specialized health plans. To the extent this bill and others result in an additional assessment on health plans, consumers could face increased premiums.
• CDI estimates costs of $70,000 in FY 2024-25 and $80,000 in FY 2025-26 if the bill is implemented after CDI completes development of regulations related to prescription drug utilization management (Insurance Fund).
• Annual costs in the low hundreds of thousands of dollars to CalPERS (Public Employees Health Care Fund, special funds). For a broader bill, SB 70 (Wiener), of the current legislative session, the CHBRP estimated expenditures for CalPERS premiums would increase by $310,000. The state pays for approximately 60% of CalPERS enrollees. CalPERS costs for this bill would likely be lower than cost for SB 70.

PRIOR VOTES:

COMMENTS:

1. Author’s statement. According to the author, according to the California Healthcare Foundation, 38% of Californians are living with one or more chronic medical conditions. Many Californians who suffer from chronic disease or illness rely on prescription medications to survive. One example is inflammatory bowel disease (IBD), a lifelong chronic illness that requires access to specific treatment as there is no “one size fits all” treatment for everyone with IBD. When providers find an effective medication, over time adjustment is often necessary, either by increasing the dose or by decreasing the dosing interval. A change in dosage is not a different treatment, but insurance policies treat them as such. This creates long pre-approval, denial, and appeal processes that make treatment less effective and more expensive over the long term. This bill authorizes prescribers to adjust, up to two times, the dose or frequency of a drug without prior authorization or subsequent utilization management, as long as the drug has been approved for coverage by the plan and the prescribing provider continues to prescribe it.
2. California Health Benefits Review Program (CHBRP). According to CHBRP, IBD includes Crohn’s disease and ulcerative colitis; cystic fibrosis; eosinophilic enteritis; enteropathy; chronic pancreatitis; and, intestinal malabsorption. Regarding prescription drugs, CHBRP indicates that almost all enrollees in plans and policies regulated by DMHC and CDI have pharmacy benefit coverage. Pharmacy benefits cover outpatient prescription drugs by covering prescriptions that are generally filled at a retail pharmacy, a mail-order pharmacy, or a specialty pharmacy. Plans and policies that include a pharmacy benefit may apply utilization management techniques, including prior authorization, step therapy, and formulary requirements. Utilization management generally applies to new prescriptions, but they may also be applied if there is a change in dose or dosage form (inhaled vs. oral, immediate vs. extended release, etc.) for a recurring prescription. Additionally, they may be applied to recurring prescriptions, should the enrollee’s plan or policy alter utilization management or if an enrollee switches from one plan or policy to another. Prescribers submit medical documentation along with a prior authorization request for an enrollee seeking to fill a script for a drug when utilization management is required.
   
3. DMHC Outpatient Prescription Drug Regulations. Among other provisions, Title 28 of the California Code of Regulations, §1300.67.24 (d)(2) indicates that in circumstances where an enrollee is changing plans, the new plan may not require the enrollee to repeat step therapy when that enrollee is already being treated for a medical condition by a prescription drug provided that the drug is appropriately prescribed and is considered safe and effective for the enrollee’s condition. This does not preclude the new plan from imposing a prior authorization requirement for the continued coverage of a prescription drug prescribed pursuant to step therapy imposed by the former plan, or preclude the prescribing provider from prescribing another drug covered by the new plan that is medically appropriate for the enrollee. 1300.67.24 (d)(3) requires a plan to provide coverage for the medically necessary dosage and quantity of the drug prescribed for the treatment of a medical condition consistent with professionally recognized standards of practice.
   
4. Prior legislation. SB 70 (Wiener of 2023) would have prohibited health plans and insurers from limiting or excluding coverage for a drug, dose of a drug, or dosage form of a drug on the basis that drug, dose of a drug, or dosage form is different from the use approved for marketing by the Federal Food and Drug Administration (FDA) if specified conditions are met, including that the drug has been previously covered for a chronic condition or cancer. SB 70 would also have prohibited plans/insurers from limiting or excluding coverage, or requiring additional cost-sharing for a drug, dosage, or dosage form of a drug that was previously approved. SB 70 was held on the Assembly Appropriations Suspense file.

SB 853 (Wiener of 2022) would have prohibited a health plan or insurer that provides coverage for prescription drugs from limiting or declining to cover a drug or dose of a drug as prescribed, or imposing additional cost-sharing for covering a drug as prescribed, if specified criteria apply. SB 853 would have provided that a reduction or termination of an ongoing and approved course of treatment before the end of the treatment or the end or amendment of the policy is an adverse benefit determination, and requires a health plan or insurer to notify an enrollee or insured, or their representative, and the enrollee’s or insured’s provider in writing, as specified. SB 853 would also have required a plan or insurer that has approved an ongoing course of treatment to provide continuing coverage pending appeal or review. Finally, SB 853 would have prohibited a health plan or insurer that provides coverage for prescription drugs from limiting or declining to cover a drug or dose of a drug as prescribed, or impose additional cost-sharing for covering a drug as prescribed, if specified provisions apply, including that the drug was previously covered by the plan or insurer or the enrollees or insured’s prior private or public health care coverage for the enrollees or insurer’s medical condition. SB 853 was held in the Assembly Appropriations Committee.

AB 347 (Arambula, Chapter 742, Statutes of 2021) requires a health plan or insurer to expeditiously grant a step therapy exception if specified criteria are met, including that the health care provider submit necessary justification and supporting clinical documentation supporting the provider's determination that the required prescription drug is inconsistent with good professional practice for provision of medically necessary covered services, as specified. SB 347 authorizes an enrollee or insured or their designee, guardian, health care provider or prescribing provider to appeal a denial of an exception request for coverage of a nonformulary drug, prior authorization request or step therapy exception request by filing a grievance, as specified. AB 347 deems a prior authorization request or step therapy exception request approved for the duration of the prescription, including refills, if a health plan, health insurer, or contracted physician group, or utilization review organization fails to notify a prescribing provider of its coverage determination within a specified timeframe. AB 347 additionally defines step therapy exception as a decision to override a generally applicable step therapy protocol in favor of coverage of the prescription drug prescribed by a health care provider for an individual enrollee.

AB 374 (Nazarian, Chapter 621, Statutes of 2015) authorizes a request for an exception to a payer’s step therapy process for prescription drugs to be submitted in the same manner as request for prior authorization for prescription drugs. In addition, it requires the payer to treat, and respond to, the request in the same manner as a request for prior authorization for prescription drugs. AB 374 also requires DMHC and CDI to include a provision for step therapy exception requests in the uniform prior authorization form.

1. Support. According to this bill’s sponsor, the Crohn’s and Colitis Foundation, many Californians who suffer from chronic disease or illness rely on prescription medications to survive. One example is IBD, a lifelong chronic illness that requires access to specific treatment and when patients’ needs are met, healthcare providers typically seek to avoid switching the medication of stable IBD patients, as finding a new treatment can be painful and time intensive. When insurance companies deny coverage of a medication or the optimization of dosage to an existing approved prescription, despite healthcare providers deeming medication vital to the patient’s health, patients risk hospitalization and even death. Many chronic diseases are well-managed with the regular use of the right medication at the right dose. When providers work with patients to find an effective medication, over time they may require adjustment of the amount given, either by increasing the dose or decreasing the dosing interval to achieve an effective therapeutic response. Every single adjustment in dose requires approval by the health plan, which, unfortunately, are often routinely denied requiring an appeal. Even more frustrating is most prescriptions for a dose adjustment that are initially denied are ultimately approved when appealed. For example, in 2021, 87.5% of IBD patients who appealed their insurance medication denials through DMHC’s IMR process eventually had their request approved. This means that patients were denied an effective dose of a life preserving medication for an unnecessary period of time. Moreover, many patients do not know this appeal is available to them, and the process can be lengthy, leaving patients without their necessary medication until a final decision is made. In addition, when a decision is made, the patient’s condition may have deteriorated or they were forced to move to another drug, which then limits future options and may not have the same therapeutic response as the previous drug at the right dose. IBD is just one of many chronic illnesses for which an inadequate dose can cause serious or life threating complications. If insurance companies are allowed to continue to deny prescribed changes in dosage levels, chronically ill patients will be unable to receive the critical treatment they need. Limiting access to medically necessary drugs and drug dosage is not adequate and does not represent quality care.
   
2. Opposition. Americas Health Insurance Plan, the Association of California Life and Health Insurance Companies, and the California Association of Health plans (plans) write this bill would undermine existing utilization management protocols for prescription drugs by nullifying these processes and allowing a provider to increase the dosage of a drug up to two times without giving a health plan or insurer the ability to ensure clinically appropriate use. The plans are concerned that stripping health plans and insurers of the ability to review a dosage increase could have a deleterious effect on our enrollees/insureds. It is important to note that clinical research and efficacy are not static and evolve over time. Oftentimes, a health plan may switch an enrollee to a more effective medication or a lower cost brand equivalent to treat a certain condition that is clinically appropriate and already on the health plan or insurer’s formulary. This bill ignores these considerations and gives providers a free pass to increase the dose of a particular drug without having to provide the health plan with a reason why the enrollee/insured should remain on the drug at elevated doses. The plans are also concerned that this bill may create potential patient safety concerns for enrollees. When health plans and insurers choose to limit a drug or specific dose of a drug, it is generally for safety reasons. Specific reasons include potential abuse or overuse, inconsistent usage with FDA-approved labeling or to prevent use at doses that have not been studied or shown to be efficacious. They are also concerned that this bill specifically excludes language that requires that a drug must be prescribed consistent with FDA-labeled dosages or prescribed for something that is consistent with the use for which the drug has been approved for marketing by the FDA. Limiting a health plan or insurer’s oversight may cause potentially adverse reactions to our enrollees if a dosage change is not done correctly.

SUPPORT AND OPPOSITION:

Support: Crohn’s and Colitis Foundation (sponsor)

California Academy of Family Physicians

California Chapter American College of Cardiology

California Chiropractic Association

California Chronic Care Coalition

California Life Sciences

California Medical Association

California Retired Teachers Association

California Society of Health System Pharmacists

Children’s Specialty Care Coalition

Everylife Foundation for Rare Diseases

Health Access California

National Multiple Sclerosis Society, MS-CAN

Oppose: America’s Health Insurance Plans

Association of California Life & Health Insurance Companies

California Association of Health Plans

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2169

Author:(Bauer-Kahan)

As Amended Ver:March 21, 2024

Majority vote

SUMMARY

Authorizes a licensed health care professional to request, and to be granted, the authority to adjust the dose or frequency of a drug to meet the specific medical needs of the enrollee or insured's chronic medical condition or cancer treatment without prior authorization or subsequent utilization management under specified conditions. Exempts Medi-Cal managed care plan contracts.

Major Provisions

COMMENTS

1. Prescription drug coverage. According to the California Health Benefit Review Program (CHBRP), almost all enrollees in plans and policies regulated by the Department of Managed Health Care (DMHC) and California Department of Insurance (CDI) have pharmacy benefit coverage. Pharmacy benefits cover outpatient prescription drugs by covering prescriptions (scripts) that are generally filled at a retail pharmacy, a mail-order pharmacy, or a specialty pharmacy. Plans and policies that include a pharmacy benefit may apply utilization management (UM) techniques, including prior authorization, step therapy, and formulary requirements. UM techniques are generally applied to new prescriptions, but they may also be applied if there is a change in dose or dosage form (inhaled vs. oral, immediate vs. extended release, etc.) for a recurring prescription. Additionally, they may be applied to recurring prescriptions, should the enrollee's plan or policy alter applicable UM techniques or if an enrollee switches from one plan or policy to another. Prescribers submit medical documentation along with a prior authorization request for an enrollee seeking to fill a script for a drug when UM requirements are present. Plans and insurers regulated by DMHC and CDI must complete utilization review (UR) for a completed prior authorization request within 72 hours (within 24 hours in emergency circumstances) or coverage for the script is required. UR may result in the plan or insurer covering the drug or denying coverage. Should a plan or insurer review a prior authorization request and then deny coverage, an enrollee, with assistance from the prescriber, may appeal the decision to the plan or insurer. Plans and insurers regulated by DMHC and CDI generally must review and respond to completed appeals within 30 days. The plan or insurer may agree to the appeal and cover the drug or may uphold their original denial. Should a plan or insurer review an appeal and uphold their denial, an enrollee, with assistance from the prescriber, may appeal the second denial to the appropriate regulator for state regulated health insurance. The regulator may uphold the denial or may require the plan or insurer to cover the drug.
2. Continuity Provisions of California Law. California law with respect to continuity of coverage requires that plans regulated by DMHC or CDI that include a pharmacy benefit not limit or exclude coverage for a drug for an enrollee when: i) the drug previously had been approved for coverage by the plan for a medical condition of the enrollee; ii) the plan's prescribing provider continues to prescribe the drug for the medical condition; and, iii) provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee's medical condition. This bill amends existing law to allow a prescriber to adjust the dose or frequency of a drug previously approved for a chronic medical condition or cancer. This authorization does not apply to opioids or a scheduled controlled substance.

According to the Author

Nearly half of all Americans live with a chronic medical condition, and that number is expected to rise by 25% in the next 20 years. According to the California Health Care Foundation, 38% of Californians are living with one or more chronic medical conditions. Many Californians who suffer from chronic disease or illness rely on prescription medications to survive. One example is inflammatory bowel disease (IBD), a lifelong chronic illness that requires access to specific treatment as there is no "one size fits all" treatment for everyone with IBD. When providers find an effective medication, over time adjustment is often necessary, either by increasing the dose or by decreasing the dosing interval. The author states that a change in dosage is not a different treatment, but insurance policies treat them as such. This creates long pre-approval, denial, and appeal processes that make treatment less effective and more expensive over the long term. The author concludes that this bill authorizes prescribers to adjust, up to two times, the dose or frequency of a drug without prior authorization or subsequent UM, as long as the drug has been approved for coverage by the plan and the plan's prescribing provider continues to prescribe it.

Arguments in Support

The Crohn's and Colitis Foundation (CCF), sponsor of this bill, writes that most prescriptions for a dose adjustment that are initially denied are ultimately approved when appealed. For example, in 2021, 87.5% of IBD patients who appealed their insurance medication denials through the DMHC IMR process eventually had their request approved. This means that patients were denied an effective dose of a life preserving medication for an unnecessary period of time. Moreover, many patients do not know this appeal is available to them, and the process can be lengthy, leaving patients without their necessary medication until a final decision is made. According to CCF, when a decision is made, the patient's condition may have deteriorated or they were forced to move to another drug, which then limits future options and may not have the same therapeutic response as the previous drug at the right dose. Limiting access to medically necessary drugs and drug dosage is not adequate and does not represent quality care. CCF concludes that this bill addresses this problem by ensuring patients have appropriate access to the right dose of a life sustaining drug that meets their specific medical needs as determined by their physician.

Arguments in Opposition

The California Association of Health Plans (CAHP), the Association of California Life and Health Insurance Companies (ACLHIC), and America's Health Insurance Plans (AHIP), contend that this bill would undermine existing UM protocols for prescription drugs by nullifying these processes and allowing a provider to increase the dosage of a drug up to two times without giving a health plan or insurer the ability to ensure clinically appropriate use. CAHP, ACLHIC, AHIP note that clinical research and efficacy are not static and evolve over time. Oftentimes, a health plan may switch an enrollee to a more effective medication or a lower cost brand equivalent to treat a certain condition that is clinically appropriate and already on the health plan or insurer's formulary. This bill ignores these considerations and gives providers a free pass to increase the dose of a particular drug without having to provide the health plan with a reason why the enrollee/insured should remain on the drug at elevated doses. The opposition concludes this bill will increase health care costs in California and will add costs to our healthcare delivery system by encouraging the use of expensive specialty and brand name drugs.

FISCAL COMMENTS

According to the Assembly Appropriations Committee,

1. DMHC estimates its cost for this bill to be approximately $24,000 in fiscal year (FY) 2024-25, $1.5 million in FY 2025-26, and $2.1 million in FY 2026-27 and annually thereafter (Managed Care Fund). DMHC states it anticipates additional workload to conduct independent medical reviews, revise survey methodology and develop tools to monitor compliance, review health plan filings of utilization management processes, and provide guidance to health plans. Additional costs include clinical and statistical consultants and software licensing. DMHC assumes the Office of Enforcement would need to address eleven referrals annually as a result of this bill. DMHC notes that generally, and depending on final enrollment data, a $1 million dollar increase to the Managed Care Fund could result in a 2-cent per month increase per enrollee on assessments to full-service health plans and a 1-cent increase per enrollee to specialized health plans. To the extent this bill and others result in an additional assessment on health plans, consumers could face increased premiums.
2. CDI estimates costs of $70,000 in FY 2024-25 and $80,000 in FY 2025-26 if the bill is implemented after CDI completes development of regulations related to prescription drug utilization management (Insurance Fund).
3. Annual costs in the low hundreds of thousands of dollars to CalPERS (Public Employees Health Care Fund, special funds). For a broader bill, SB 70 (Wiener), of the current legislative session, the CHBRP estimated expenditures for CalPERS premiums would increase by $310,000. The state pays for approximately 60% of CalPERS enrollees. CalPERS costs for this bill would likely be lower than cost for SB 70.

VOTES

ASM HEALTH: 14-0-2

YES: Bonta, Waldron, Aguiar-Curry, Arambula, Wendy Carrillo, Haney, Jones-Sawyer, Maienschein, McCarty, Joe Patterson, Rodriguez, Santiago, Schiavo, Weber

ABS, ABST OR NV: Flora, Sanchez

ASM APPROPRIATIONS: 12-1-2

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Mike Fong, Grayson, Haney, Hart, Pellerin, Villapudua

NO: Dixon

ABS, ABST OR NV: Jim Patterson, Ta

UPDATED

VERSION: March 21, 2024

CONSULTANT: Kristene Mapile / HEALTH / (916) 319-2097 FN: 0003139

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2169

Author:(Bauer-Kahan) – As Amended Ver:March 21, 2024

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

SUMMARY:

This bill prohibits a health plan or insurer from limiting or excluding coverage of a prescription drug if an enrollee has continuously used that drug for a medical condition while covered by their current or previous health plan or insurer. This bill also authorizes a licensed health care professional to adjust, without prior authorization, the dose or frequency of a drug to meet the specific medical needs of an enrollee or insured, if specified conditions are met.

FISCAL EFFECT:

1. The Department of Managed Health Care (DMHC) estimates its cost for this bill to be approximately $24,000 in fiscal year (FY) 2024-25, $1.5 million in FY 2025-26, and $2.1 million in FY 2026-27 and annually thereafter (Managed Care Fund). DMHC states it anticipates additional workload to conduct independent medical reviews, revise survey methodology and develop tools to monitor compliance, review health plan filings of utilization management processes, and provide guidance to health plans. Additional costs include clinical and statistical consultants and software licensing. DMHC assumes the Office of Enforcement would need to address eleven referrals annually as a result of this bill. DMHC notes that generally, and depending on final enrollment data, a $1 million dollar increase to the Managed Care Fund could result in a 2-cent per month increase per enrollee on assessments to full-service health plans and a 1-cent increase per enrollee to specialized health plans. To the extent this bill and others result in an additional assessment on health plans, consumers could face increased premiums.
2. The California Department of Insurance (CDI) estimates costs of $70,000 in FY 2024-25 and $80,000 in FY 2025-26 if the bill is implemented after CDI completes development of regulations related to prescription drug utilization management (Insurance Fund).
3. Annual costs in the low hundreds of thousands of dollars to CalPERS (Public Employees Health Care Fund, special funds). For a broader bill, SB 70 (Wiener), of the current legislative session, the California Health Benefits Review Program (CHBRP) estimated expenditures for CalPERS premiums would increase by $310,000. The state pays for approximately 60% of CalPERS enrollees. CalPERS costs for this bill would likely be lower than cost for SB 70.
   

COMMENTS:

1. Purpose. This bill is sponsored by the Crohn’s & Colitis Foundation. According to the author:

According to the California Healthcare Foundation, 38% of Californians are living with one or more chronic medical conditions. Many Californians who suffer from chronic disease or illness rely on prescription medications to survive. One example is inflammatory bowel disease (IBD), a lifelong chronic illness that requires access to specific treatment as there is no “one size fits all” treatment for everyone with IBD. When providers find an effective medication, over time adjustment is often necessary, either by increasing the dose or by decreasing the dosing interval. A change in dosage is not a different treatment, but insurance policies treat them as such. This creates long pre-approval, denial, and appeal processes that make treatment less effective and more expensive over the long term. AB 2169 authorizes prescribers to adjust, up to two times, the dose or frequency of a drug without prior authorization or subsequent utilization management, as long as the drug has been approved for coverage by the plan and the plan’s prescribing provider continues to prescribe it.

1. Continuity Provisions of California Law. California law requires DMHC- or CDI-regulated plans that include a pharmacy benefit not limit or exclude coverage for a drug for an enrollee when: (a) the drug previously had been approved for coverage by the plan for a medical condition of the enrollee; (b) the plan’s prescribing provider continues to prescribe the drug for the medical condition; and (c) the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition. This bill amends existing law to allow a prescriber to adjust the dose or frequency of a drug previously approved for a chronic medical condition or cancer.
2. Related Legislation. SB 70 (Wiener) prohibits a health plan or insurer from limiting or excluding coverage of a drug, dose of a drug, or dosage form of a drug that is prescribed for off-label use for a life-threatening or chronic and seriously debilitating condition or cancer, if the health plan or insurer previously covered the drug for the patient, regardless of whether the drug, dose, or dosage form is on the plan’s or insurer’s formulary. SB 70 also prohibits a health plan or insurance policy from requiring cost sharing for a drug that was previously approved for coverage. SB 70 was held in this committee.
3. Prior Legislation.
   1. AB 347 (Arambula), Chapter 742, Statutes of 2021, requires a health plan or health insurer to expeditiously grant a step therapy exception if specified criteria are met, including that the health care provider submit necessary justification and supporting clinical documentation supporting the provider's determination that the required prescription drug is consistent with good professional practice for provision of medically necessary covered services, as specified.
   2. SB 853 (Wiener), of the 2021-22 Legislative Session, was similar to SB 70 and was held in this committee.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: April 9, 2024

ASSEMBLY COMMITTEE ON HEALTH

Mia Bonta, Chair

ABPCA Bill Id:AB 2169

Author:((Bauer-Kahan) – As Amended Ver:March 21, 2024

SUBJECT: Prescription drug coverage: dose adjustments.

SUMMARY: Authorizes a licensed health care professional to request, and to be granted, the authority to adjust the dose or frequency of a drug to meet the specific medical needs of the enrollee or insured without prior authorization or subsequent utilization management under specified conditions. Specifically, this bill:

1. Authorizes a licensed health care professional to request, and to be granted, the authority to adjust the dose or frequency of a drug to meet the specific medical needs of the enrollee or insured without prior authorization or subsequent utilization management if the following conditions are met:
   1. The drug previously had been approved for coverage by the plan for an enrollee or insured’s chronic medical condition or cancer treatment and the plan or insurer’s prescribing provider continues to prescribe the drug for the enrollee’s chronic medical condition or cancer treatment;
   2. The drug is not an opioid or a scheduled controlled substance; and,
   3. The dose has not been adjusted more than two times without prior authorization.
2. Prohibits the health plan or insurer from limiting or excluding coverage of that prescription if the enrollee or insured has been continuously using a prescription drug selected by the enrollee or insured’s prescribing provider for the medical condition under consideration while covered by their current or previous health coverage.
3. Exempts Medi-Cal managed care plans contracting with the Department of Health Care Services from the provisions of this bill.

EXISTING LAW:

1. Establishes the Department of Managed Health Care (DMHC) to regulate health plans under the Knox-Keene Health Care Service Plan Act of 1975 and California Department of Insurance (CDI) to regulate health insurance. [Health and Safety Code (HSC) §1340, et seq., Insurance Code (INS) §106, et seq.]
2. Establishes as California's essential health benefits (EHBs) benchmark, the Kaiser Small Group Health Maintenance Organization contract, existing California mandates, and 10 federal Patient Protection and Affordable Care Act mandated benefits, including prescription drugs. [HSC §1367.005 and INS §10112.27]
3. Requires the criteria or guidelines used by health plans and insurers, or any entities with which plans or insurers contract for utilization review (UR) or utilization management (UM) functions, to determine whether to authorize, modify, or deny health care services to:
   1. Be developed with involvement from actively practicing health care providers;
   2. Be consistent with sound clinical principles and processes;
   3. Be evaluated, and updated if necessary, at least annually;
   4. If used as the basis of a decision to modify, delay, or deny services in a specified case under review, be disclosed to the provider and the enrollee or insured in that specified case; and,
   5. Be available to the public upon request. [HSC §1363.5 and INS §10123.135]
      
4. Requires reviews, for purposes of Independent Medical Review (IMR), to determine whether the disputed health care service was medically necessary based on the specific medical needs of the enrollee or insured and any of the following:
5. Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service;
6. Nationally recognized professional standards;
7. Expert opinion;
8. Generally accepted standards of medical practice; or,
9. Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious. [HSC §1374.33 and INS §10169.3]
10. Requires, if a health plan or health insurer that provides coverage for prescription drugs or a contracted physicians group fails to respond to a prior authorization, or step therapy exception request, as specified, within 72 hours for nonurgent requests, and within 24 hours if exigent circumstances exist, upon the receipt of a completed request form, the request to be deemed granted. [HSC §1367.241 and INS §10123.191]
11. Authorizes a health plan or insurer that provides coverage for prescription drugs to require step therapy if there is more than one drug that is clinically appropriate for the treatment of a medical condition. [HSC §1367.206 and INS §10123.201]
12. Prohibits a health plan contract from limiting or excluding coverage for a drug for an enrollee if the drug previously had been approved for coverage by the plan for a medical condition of the enrollee and the plan’s prescribing provider continues to prescribe the drug for the medical condition, provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s condition. Does not preclude the prescriber from prescribing another covered drug that is medically appropriate or a generic substitution, as authorized. Specifies that provisions do not apply to coverage for any drug that is prescribed for a use that is different from the use for which that drug has been approved for marketing by the federal Food and Drug Administration. [HSC §1367.22]

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

COMMENTS:

1. PURPOSE OF THIS BILL. According to the author, nearly half of all Americans live with a chronic medical condition, and that number is expected to rise by 25% in the next 20 years. According to the California Health Care Foundation, 38% of Californians are living with one or more chronic medical conditions. Many Californians who suffer from chronic disease or illness rely on prescription medications to survive. One example is inflammatory bowel disease (IBD), a lifelong chronic illness that requires access to specific treatment as there is no “one size fits all” treatment for everyone with IBD. When providers find an effective medication, over time adjustment is often necessary, either by increasing the dose or by decreasing the dosing interval. The author states that a change in dosage is not a different treatment, but insurance policies treat them as such. This creates long pre-approval, denial, and appeal processes that make treatment less effective and more expensive over the long term. The author concludes that this bill authorizes prescribers to adjust, up to two times, the dose or frequency of a drug without prior authorization or subsequent UM, as long as the drug has been approved for coverage by the plan and the plan’s prescribing provider continues to prescribe it.
2. BACKGROUND.
   1. Prescription drug coverage. According to the California Health Benefit Review Program, almost all enrollees in plans and policies regulated by DMHC and CDI have pharmacy benefit coverage. Pharmacy benefits cover outpatient prescription drugs by covering prescriptions (scripts) that are generally filled at a retail pharmacy, a mail-order pharmacy, or a specialty pharmacy. Plans and policies that include a pharmacy benefit may apply UM techniques, including prior authorization, step therapy, and formulary requirements. UM techniques are generally applied to new prescriptions, but they may also be applied if there is a change in dose or dosage form (inhaled vs. oral, immediate vs. extended release, etc.) for a recurring prescription. Additionally, they may be applied to recurring prescriptions, should the enrollee’s plan or policy alter applicable UM techniques or if an enrollee switches from one plan or policy to another. Prescribers submit medical documentation along with a prior authorization request for an enrollee seeking to fill a script for a drug when UM requirements are present. Plans and insurers regulated by DMHC and CDI must complete UR for a completed prior authorization request within 72 hours (within 24 hours in emergency circumstances) or coverage for the script is required. UR may result in the plan or insurer covering the drug or denying coverage. Should a plan or insurer review a prior authorization request and then deny coverage, an enrollee, with assistance from the prescriber, may appeal the decision to the plan or insurer. Plans and insurers regulated by DMHC and CDI generally must review and respond to completed appeals within 30 days. The plan or insurer may agree to the appeal and cover the drug or may uphold their original denial. Should a plan or insurer review an appeal and uphold their denial, an enrollee, with assistance from the prescriber, may appeal the second denial to the appropriate regulator for state regulated health insurance. The regulator may uphold the denial or may require the plan or insurer to cover the drug.
   2. Continuity Provisions of California Law. California law with respect to continuity of coverage requires that plans regulated by DMHC or CDI that include a pharmacy benefit not limit or exclude coverage for a drug for an enrollee when: i) the drug previously had been approved for coverage by the plan for a medical condition of the enrollee; ii) the plan’s prescribing provider continues to prescribe the drug for the medical condition; and, iii) provided that the drug is appropriately prescribed and is considered safe and effective for treating the enrollee’s medical condition. This bill amends existing law to allow a prescriber to adjust the dose or frequency of a drug previously approved for a chronic medical condition or cancer. This authorization does not apply to opioids or a scheduled controlled substance.
3. SUPPORT. The Crohn’s and Colitis Foundation (CCF), sponsor of this bill, writes that most prescriptions for a dose adjustment that are initially denied are ultimately approved when appealed. For example, in 2021, 87.5% of IBD patients who appealed their insurance medication denials through the DMHC IMR process eventually had their request approved. This means that patients were denied an effective dose of a life preserving medication for an unnecessary period of time. Moreover, many patients do not know this appeal is available to them, and the process can be lengthy, leaving patients without their necessary medication until a final decision is made. According to CCF, when a decision is made, the patient’s condition may have deteriorated or they were forced to move to another drug, which then limits future options and may not have the same therapeutic response as the previous drug at the right dose. Limiting access to medically necessary drugs and drug dosage is not adequate and does not represent quality care. CCF concludes that this bill addresses this problem by ensuring patients have appropriate access to the right dose of a life sustaining drug that meets their specific medical needs as determined by their physician.
4. OPPOSITION. The California Association of Health Plans (CAHP), the Association of California Life and Health Insurance Companies (ACLHIC), and America’s Health Insurance Plans (AHIP), contend that this bill would undermine existing utilization management protocols for prescription drugs by nullifying these processes and allowing a provider to increase the dosage of a drug up to two times without giving a health plan or insurer the ability to ensure clinically appropriate use. CAHP, ACLHIC, AHIP note that clinical research and efficacy are not static and evolve over time. Oftentimes, a health plan may switch an enrollee to a more effective medication or a lower cost brand equivalent to treat a certain condition that is clinically appropriate and already on the health plan or insurer’s formulary. This bill ignores these considerations and gives providers a free pass to increase the dose of a particular drug without having to provide the health plan with a reason why the enrollee/insured should remain on the drug at elevated doses. The opposition concludes this bill will increase health care costs in California and will add costs to our healthcare delivery system by encouraging the use of expensive specialty and brand name drugs.
5. RELATED LEGISLATION. SB 516 (Skinner) prohibits a health plan or health insurer from requiring a contracted health professional to complete or obtain a prior authorization for any covered health care services if the plan or insurer approved or would have approved not less than 90% of the prior authorization requests they submitted in the most recent completed one-year contracted period. SB 516 is pending in Assembly Appropriations Committee.
6. PREVIOUS LEGISLATION.
   1. SB 70 (Wiener) of 2023 was similar to this bill and would have additionally prohibit limiting or excluding coverage of a drug, dose of a drug, or dosage form of a drug that is prescribed for off-label use if the drug has been previously covered for a chronic condition or cancer, as specified, regardless of whether or not the drug, dose, or dosage form is on the plan’s or insurer’s formulary. Would have prohibited a health plan contract or health insurance policy from requiring additional cost sharing not already imposed for a drug that was previously approved for coverage. SB 70 was held in the Assembly Appropriations Committee.
   2. SB 598 (Skinner) of 2023 was substantially similar to SB 516 (Skinner) and was held in Assembly Appropriations Committee.
   3. SB 853 (Wiener) of 2022 was similar to SB 70 (Wiener) of 2023. SB 853 was held in the Assembly Appropriations Committee.
   4. AB 347 (Arambula), Chapter 742, Statutes of 2021, requires a health plan or health insurer to expeditiously grant a step therapy exception if specified criteria are met, including that the health care provider submit necessary justification and supporting clinical documentation supporting the provider's determination that the required prescription drug is inconsistent with good professional practice for provision of medically necessary covered services, as specified.

REGISTERED SUPPORT / OPPOSITION:

Support

Crohn’s & Colitis Foundation (sponsor)
California Chapter American College of Cardiology

California Chronic Care Coalition

California Life Sciences

California Medical Association

California Retired Teachers Association

Children's Specialty Care Coalition

National Multiple Sclerosis Society, MS-CAN

Oncology Nursing Society

Opposition

America’s Health Insurance Plans

Association of California Life & Health Insurance Companies
California Association of Health Plans

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