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 BILL NUMBER:  S1034

 TITLE OF BILL : An act to amend the insurance law, in relation to health insurance policies and prescription drug coverage

  PURPOSE OR GENERAL IDEA OF BILL : Discourages the practice by health insurers of creating co-payment and co-insurance structures that effectively reduce coverage and raise costs for policy-holders. It limits the ability of health insurers to push patients toward generic drugs where the generic drugs are not the equivalent of the brand name drug prescribed. Prevents a change in an insurer's formulary from discontinuing use of a prescribed drug by an existing policyholder whose doctor determines the drug to be medically necessary. Further, it prohibits insurers from imposing an additional dispensing fee or co-pay to purchase prescription drugs from a local pharmacy as opposed to a mail order business.

 SUMMARY OF SPECIFIC PROVISIONS : Section 1: Amends Insurance Law section 3221 to add a new subsection (s) Which regulates small group insurance policies.

* Maximum co-payment and co-insurance amounts be limited so they shall not exceed ten times the dollar value of the lowest co-payment and co-insurance amount whose cost is above zero dollars.

* When an insurer has required that a member take a generic alternative to a brand-name patented drug prescribed by their doctor, and the alternative is not deemed as having an equivalent impact on the member by the member's prescribing physician and is not deemed an A-rated generically and therapeutically equivalent product as determined by the FDA, the insurer shall pay for and make available the brand-name patented drug originally prescribed by the member's doctor.

* In cases where step therapy is required prior to a patient accessing a brand name patented prescription drug, the patient can receive the brand name patented prescription drug prescribed by their doctor if the patient tries one alternative medication and the patient's doctor determines that the single source therapy remains medically necessary.

* A patient receiving coverage for a drug on an insurer's existing formulary shall not be denied coverage upon a change in the formulary if his or her physician determines that drug to be medically necessary.

* No insurer shall impose an additional fee or co-pay on an insured who elects to purchase prescription drugs from a local pharmacy as opposed to a mail order pharmacy business.

Section 2: Amends Insurance Law section 4303 to add a new subsection (hh) to add similar provisions to the insurance law as are added in bill section 1 above.

 JUSTIFICATION : Access to prescription drugs that best treat a particular illness or condition are essential to the health and well-being of New Yorkers, particularly the state's senior population. Decisions about the most appropriate prescription drug treatments made by doctors and patients can be inappropriately compromised by financial considerations.

This issue is most evident in relation to access to single-source drugs. Single-source drugs are unique in their formulation, dosage, and delivery-they have no generic equivalent because of current patent laws and are often times more expensive. The higher prices of single-source drugs cause insurance companies to create policies and formularies that steer the insured toward prescription drugs that are cheaper, rather than those that the doctor and patient may decide are the best course of treatment. Insurance companies put restrictions in place ranging from higher co-payments and coinsurance to bureaucratic approval requirements like pre-authorization and step therapy that hinder patient's access to brand name drugs that-their doctor has determined is the most suitable drug to treat their condition.

A 2008 study by my office showed that the most commonly prescribed single-source prescription drugs, and those most frequently used to treat ailments disproportionally impacting minorities like heart disease, were the most likely to have restrictions on their use imposed by the insurance companies. The findings included:

* All 15 health insurance companies surveyed imposed restrictions on use of the twenty most prescribed single-source drugs.

* More than a third of health insurance companies surveyed imposed restrictions on the use of the most commonly prescribed single-source drugs treating mental health conditions.

* More than a third of health insurance companies surveyed imposed restrictions on the use of the most commonly prescribed single-source drugs treating high cholesterol and blood pressure.

A 2009 report by my office further examining this issue resulted in additional conclusions, including:

* Single-source drugs treating HIV/AIDS routinely had the highest co-payments, despite findings that costly co-payments on HIV/AIDS drugs results in treatment interruption that can cause the virus to become resistant to the prescribed drug and make treatment of the patient more difficult.

* Insurance companies surveyed frequently require doctors to acquire pre-authorization to prescribe single-source drugs treating cancer for their patients.

* Single-source drugs treating chronic pain and cardiovascular ailments are extensively restricted through prior authorization. expensive co-payments and quantity limitations. In several instances. multiple limitations on use will be placed on one single-source drug.

This bill also gives freedom to patients to patronize their local pharmacy instead being forced to obtain their prescription drugs from mail order businesses.

 LEGISLATIVE HISTORY : This bill is a combination of Senate Bills 1843, 2938, and 5510 of 2010 that were all sponsored by senator Klein that address the issue of single source drugs and access to pharmaceuticals at local pharmacies.

 FISCAL IMPLICATIONS : None.

 EFFECTIVE DATE : This act shall take effect on January 1st in the year succeeding when it was signed into law and apply to all insurance policies or contracts issued or renewed after that date. 

Text

STATE OF NEW YORK
________________________________________________________________________

1034

2011-2012 Regular Sessions

IN SENATE

(PREFILED)

January 5, 2011
___________

Introduced by Sens. KLEIN, ADAMS, HASSELL-THOMPSON, OPPENHEIMER, PARKER,
  STAVISKY  --  read  twice  and ordered printed, and when printed to be
  committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to health insurance poli-
  cies and prescription drug coverage

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Section  3221 of the insurance law is amended by adding a
new subsection (s) to read as follows:
  (S) EVERY GROUP OR BLANKET POLICY DELIVERED OR ISSUED FOR DELIVERY  IN
THIS STATE WHICH PROVIDES PRESCRIPTION DRUG COVERAGE SHALL:
  (1)  LIMIT  THE  MAXIMUM  CO-PAYMENT AND CO-INSURANCE AMOUNTS FOR SUCH
PRESCRIPTION DRUGS SO THEY SHALL NOT EXCEED TEN TIMES THE  DOLLAR  VALUE
OF  THE  LOWEST  CO-PAYMENT  AND CO-INSURANCE AMOUNT WHOSE COST IS ABOVE
ZERO DOLLARS.
  (2) SUCH PRESCRIPTION DRUG COVERAGE SHALL BE SUBJECT TO THE  FOLLOWING
PROVISIONS:
  (I)  WHEN  AN  INSURER  HAS REQUIRED THAT A MEMBER INSURED BY A HEALTH
POLICY ISSUED UNDER THIS SECTION TAKE A GENERIC ALTERNATIVE TO A  BRAND-
NAME  PATENTED  DRUG  PRESCRIBED BY THEIR DOCTOR, AND THE ALTERNATIVE IS
NOT DEEMED AS HAVING AN EQUIVALENT IMPACT ON THE MEMBER BY THE  MEMBER'S
PRESCRIBING PHYSICIAN AND IS NOT DEEMED AN A-RATED GENERICALLY AND THER-
APEUTICALLY  EQUIVALENT  PRODUCT  AS  DETERMINED BY THE FDA, THE INSURER
SHALL PAY FOR AND MAKE AVAILABLE THE BRAND-NAME PATENTED DRUG ORIGINALLY
PRESCRIBED BY THE MEMBER'S DOCTOR.
  (II) IN CASES WHERE STEP  THERAPY  IS  REQUIRED  PRIOR  TO  A  PATIENT
ACCESSING  A  BRAND-NAME  PATENTED  PRESCRIPTION  DRUG,  THE PATIENT CAN
RECEIVE THE BRAND-NAME PATENTED PRESCRIPTION DRUG  PRESCRIBED  BY  THEIR
DOCTOR IF THE PATIENT TRIES ONE ALTERNATIVE MEDICATION AND THE PATIENT'S

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05154-01-1
S. 1034                             2

DOCTOR  DETERMINES  THAT  THE  SINGLE  SOURCE  THERAPY REMAINS MEDICALLY
NECESSARY.
  (3)  ENSURE  THAT  THERE  IS  CONTINUOUS  COVERAGE  OF A SINGLE SOURCE
PRESCRIPTION DRUG THAT IS  PART  OF  A  PRESCRIBED  THERAPY  UNTIL  SUCH
PRESCRIBED  THERAPY  IS  NO  LONGER  MEDICALLY NECESSARY FOR ANY COVERED
PERSON UNDER SUCH POLICY.
  (4) NO SUCH POLICY PROVIDED UNDER  THIS  SUBSECTION  SHALL  IMPOSE  AN
ADDITIONAL  FEE  OR  CO-PAY  REQUIREMENT  ON  ANY  INSURED WHO ELECTS TO
PURCHASE PRESCRIBED DRUGS FROM OTHER THAN A MAIL ORDER PROVIDER IF  SUCH
FEE  OR  CO-PAY  IS  NOT  OTHERWISE  IMPOSED.  NOR SHALL ANY SUCH POLICY
REQUIRE THAT ONLY MAIL ORDER PROVIDERS BE UTILIZED  AS  A  CONDITION  OF
COVERAGE FOR PRESCRIBED DRUGS.
  S  2.  Section  4303  of  the insurance law is amended by adding a new
subsection (hh) to read as follows:
  (HH) EVERY CONTRACT ISSUED BY A HOSPITAL SERVICE  CORPORATION,  HEALTH
SERVICE  CORPORATION  OR  MEDICAL  EXPENSE  INDEMNITY  CORPORATION WHICH
PROVIDES PRESCRIPTION DRUG COVERAGE SHALL:
  (1) LIMIT THE MAXIMUM CO-PAYMENT AND  CO-INSURANCE  AMOUNTS  FOR  SUCH
PRESCRIPTION  DRUGS  SO THEY SHALL NOT EXCEED TEN TIMES THE DOLLAR VALUE
OF THE LOWEST CO-PAYMENT AND CO-INSURANCE AMOUNT  WHOSE  COST  IS  ABOVE
ZERO DOLLARS.
  (2)  SUCH PRESCRIPTION DRUG COVERAGE SHALL BE SUBJECT TO THE FOLLOWING
PROVISIONS:
  (I) WHEN AN INSURER HAS REQUIRED THAT A MEMBER  INSURED  BY  A  HEALTH
CONTRACT  ISSUED  UNDER  THIS  SECTION  TAKE  A GENERIC ALTERNATIVE TO A
BRAND-NAME PATENTED DRUG PRESCRIBED BY THEIR DOCTOR, AND THE ALTERNATIVE
IS NOT DEEMED AS HAVING AN  EQUIVALENT  IMPACT  ON  THE  MEMBER  BY  THE
MEMBER'S  PRESCRIBING PHYSICIAN AND IS NOT DEEMED AN A-RATED GENERICALLY
AND THERAPEUTICALLY EQUIVALENT PRODUCT AS DETERMINED  BY  THE  FDA,  THE
INSURER  SHALL  PAY  FOR AND MAKE AVAILABLE THE BRAND-NAME PATENTED DRUG
ORIGINALLY PRESCRIBED BY THE MEMBER'S DOCTOR.
  (II) IN CASES WHERE STEP  THERAPY  IS  REQUIRED  PRIOR  TO  A  PATIENT
ACCESSING  A  BRAND-NAME  PATENTED  PRESCRIPTION  DRUG,  THE PATIENT CAN
RECEIVE THE BRAND-NAME PATENTED PRESCRIPTION DRUG  PRESCRIBED  BY  THEIR
DOCTOR IF THE PATIENT TRIES ONE ALTERNATIVE MEDICATION AND THE PATIENT'S
DOCTOR  DETERMINES  THAT  THE  SINGLE  SOURCE  THERAPY REMAINS MEDICALLY
NECESSARY.
  (3) ENSURE THAT THERE  IS  CONTINUOUS  COVERAGE  OF  A  SINGLE  SOURCE
PRESCRIPTION  DRUG  THAT  IS  PART  OF  A  PRESCRIBED THERAPY UNTIL SUCH
PRESCRIBED THERAPY IS NO LONGER  MEDICALLY  NECESSARY  FOR  ANY  COVERED
PERSON UNDER SUCH POLICY.
  (4)  NO  SUCH  POLICY  PROVIDED  UNDER THIS SUBSECTION SHALL IMPOSE AN
ADDITIONAL FEE OR CO-PAY  REQUIREMENT  ON  ANY  INSURED  WHO  ELECTS  TO
PURCHASE  PRESCRIBED DRUGS FROM OTHER THAN A MAIL ORDER PROVIDER IF SUCH
FEE OR CO-PAY IS NOT  OTHERWISE  IMPOSED.  NOR  SHALL  ANY  SUCH  POLICY
REQUIRE  THAT  ONLY  MAIL  ORDER PROVIDERS BE UTILIZED AS A CONDITION OF
COVERAGE FOR PRESCRIBED DRUGS.
  S 4. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law; provided that it shall
apply  to  all  new  policies and contracts issued, renewed, modified or
revised on or after such date.