Drug formularies.

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 requires a health care service plan or health insurer that provides prescription drug benefits and maintains one or more drug formularies to meet certain criteria for its formularies and the placement of drugs on formularies. This bill would prohibit a health care service plan or health insurer that provides prescription drug benefits and maintains one or more drug formularies from making changes to a formulary during a plan or policy year, except in specified circumstances. If a plan or insurer implements a formulary change requiring an enrollee or insured to change to a different drug in the same drug class during the plan year, the bill would authorize the individual to remain on the previously covered drug for the rest of the plan year if the drug was previously approved for coverage for the individual's medical condition, is appropriately prescribed, and is considered safe and effective for treating that condition, and would require the plan or insurer to notify the individual and their provider no less than 90 days before the change is implemented. The bill would require a plan or insurer, or its pharmacy benefit manager, to report to the appropriate department any changes made to a formulary during a plan or policy year within 30 days of the change being made. The bill would authorize the departments to investigate and take enforcement action against a plan or insurer for noncompliance with the above-described requirements and to impose, after notice and the opportunity for a hearing, administrative penalties, as specified, for a violation of these provisions. The bill would authorize the departments to conduct audits related to these provisions. Because a willful violation of the bill's provisions by a health care service plan would be a crime, the bill would impose a state-mandated local program. Existing law requires a health care service plan that provides prescription drug benefits to maintain an expeditious process by which prescribing providers may obtain authorization for a medically necessary nonformulary prescription drug. This bill would define "expeditious process" for the above-described purpose to require a plan to approve authorization within 72 hours for nonurgent requests, or within 24 hours if exigent circumstances exist, of a request for approval of a drug prescription. If the plan fails to meet those requirements, the bill would authorize an enrollee to request, and would require the plan to provide, 90 days of transitional coverage to the enrollee for the previously covered drug. The bill would require the Department of Managed Health Care to utilize existing data and its existing authority to collect data from plans and annually publish on its internet website and submit to the Legislature an aggregated report on information related to requests for approval of a nonformulary drug as described above. 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.