Prohibits first fail accident and/or health insurance policies; enacts penalties and defines terms.
TITLE OF BILL: An act to amend the insurance law, in relation to the prohibition on first fail policies
PURPOSE: This bill would amend the insurance law by adding Article 33 which would prohibit fail first accident/or health insurance policies that require a patient to exhaust the least expensive drug options before insurers will cover more expensive treatment options. The bill would also prohibit switching patients to a different prescription drug without the full knowledge and consent of the prescribing physician and the patient, would require simple, common-sense steps to protect patients from the risks of ill-considered changes in their prescribed medicines. The bill would provide consumers with safeguards, transparency, and medical oversight that is necessary to ensure their health and safety.
SUMMARY OF PROVISIONS: This bill would amend the insurance law by adding a new article 33 which would prohibit fail first accident/or health insurance policies and unauthorized therapeutic substitution.
Section 3301 defines key terms.
Section 3302 prohibits health benefit plans that provide prescription coverage from reducing, limiting, or denying coverage when the insured was taking the medication or was currently covered by a policy that covered the drug. Section 3303 also prohibits switching patients to a different prescription drug without the full knowledge and consent of the prescribing physician and the patient, and would require simple, common-sense steps to protect patients from the risks of ill-considered changes in their prescribed medicines. The legislation specifies that an insurer is allowed to make uniform changes in its benefit design that apply to all covered drugs or increase cost-sharing obligations' only due to an increase in the underlying drug prices.
Section 3303 ensures the "consumers' right to know" and requires that any time a change to a patient's medication is recommended, that all "switch communications" clearly inform the insured of the originally prescribed medication, advise the insured of their rights and any cost-sharing changes they will assume.
Section 3304 establishes penalties in the event that an unauthorized therapeutic substitution or a "switch communication" is non-compliant or contains a false statement. These penalties include fines that shall not exceed $25,000.
Section 3305 authorizes the prescribing physician to override restrictions placed on a patient's medication by a PBM or insurer through fail first protocol in situations including when the treatment has been or is expected to be ineffective in treating the patient's disease or medical condition or is likely to cause an adverse reaction or other harm. Additionally, for medications with no generic equivalent and for which the prescribing physician feels there is no appropriate therapeutic alternative, the insurer or PMB is required to
provide access to medications labeled by the United States Food and Drug Administration without restriction.
JUSTIFICATION: Fail first, is an approach to prescribing drugs used by health insurers to control costs. Fail first, also called step therapy, insists that the least expensive drug in any class be proscribed to a patient first. If the treatment is ineffective, insurers will cover more expensive treatment options. This practice has serious negative consequences for consumers and the public health system. By limiting the array of medication options, both physicians and consumers are forced to compromise their treatment decisions in a way that is dangerous, time consuming and more expensive from a direct and indirect out-of-pocket cost perspective.
Under fail first, a consumer will often have to fail on one or more medications before they are allowed access to the medication that his or her physician would have tried as an initial treatment. It is poor clinical care to delay the start of effective treatment and expose a person to unnecessary risk. In this way, fail first denies patients the drugs they need when they need them, and effectively allows insurers to practice medicine without a license. There axe significant administrative costs associated with these types of policies and most importantly, consumers can relapse and require more expensive medical interventions such as hospitalization.
Of equal importance is the prohibition of unauthorized switching of patients to a different prescription drug without the full knowledge and consent of the prescribing physician and the patient. This bill would require simple, common-sense steps to protect patients from the risks of ill-considered changes in their prescribed medicines.
Because therapeutic substitution switches a patient to a different drug, it should only be done with the full knowledge and consent of the prescribing physician and the patient, and as a result of a discussion between them. "Therapeutic" substitutes may differ from each other in important ways; for example, therapeutic substitutes may not be equally effective in treating a patient's disease, and they may have different safety profiles or side effects. Consequently, many medical societies have spoken out against allowing therapeutic substitution without the prescribing physician's consent.
When physicians prescribe a particular medication, they evaluate which drug is likely to work best for the individual patient -- based on their knowledge of the patient's illness and treatment history, other medical conditions, drug-to-drug interactions, and drug-disease interactions. Only the prescribing physician has enough clinical information to make these decisions.
Requiring that the prescribing physician authorize any change to a different medication is therefore a critical safeguard to protect patients' health. Likewise, patients must not feel pressured to agree to a proposed switch -- they must understand, for example, that they can talk to their physician about a proposed switch, and have the right to say no -- and the prescribing physician and the.patient both must have full information on the substitute drug proposed for a patient. These simple safeguards can make a critical difference in many cases; they are especially important, for example, when a patient
is being successfully treated with the originally prescribed medication and could suffer a setback from a switch that fails to account for the patient's medical conditions and history, or when a switch is recommended for an elderly patient who has multiple chronic conditions and is taking many medications.
The bill prohibits insurers that provide prescription coverage under a health benefit plan from reducing, limiting, or denying coverage when the insured was taking the medication or was currently covered by a policy that covered the drug. The legislation provides transparency by requiring that all "switch communications" clearly inform the insured of the originally prescribed medication. Further, "switch communications" must advise the insured of their rights and any cost-sharing changes they will incur.
Most significantly, this bill allows the prescribing physician to override any step therapy, fail first protocol and manage medication therapy as appropriate. This medical veto and therapy management authority is essential to ensure patient safety when the suggested change in medication has been ineffective in treating the patient's disease or medical condition, is expected to be ineffective, or is likely to cause an adverse reaction or other harm.
LEGISLATIVE HISTORY: 2011,2012: S.5110/A.8609 Referred to Insurance
FISCAL IMPLICATIONS: This bill is budget neutral. The bill does not apply to any health care services paid for by any state, department or agency. This bill should save patients and health care providers a considerable amount in administrative costs and unnecessary medical treatment.
EFFECTIVE DATE: This bill would become effective 120 days after it shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 2086 2013-2014 Regular Sessions IN SENATE January 10, 2013 ___________Introduced by Sens. YOUNG, ADDABBO -- 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 the prohibition on first fail policies THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The insurance law is amended by adding a new article 33 to read as follows: ARTICLE 33 PROHIBITION ON FIRST FAIL POLICIES AND UNAUTHORIZED THERAPEUTIC SUBSTITUTION SECTION 3301. DEFINITIONS. 3302. PRESCRIPTION DRUG DENIALS. 3303. SWITCH COMMUNICATIONS/CONSUMER RIGHT TO KNOW. 3304. PENALTIES. 3305. PRESCRIPTION DRUG RESTRICTION OVERRIDES. S 3301. DEFINITIONS. AS USED IN THIS ARTICLE: (A) "INSURER" SHALL MEAN ANY PERSON OR ENTITY WHO OFFERS A POLICY OF ACCIDENT AND/OR HEALTH INSURANCE PURSUANT TO SECTION THREE THOUSAND TWO HUNDRED SIXTEEN, THREE THOUSAND TWO HUNDRED TWENTY-ONE, OR FOUR THOUSAND THREE HUNDRED THREE OF THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE PUBLIC HEALTH LAW; EXCEPT WHEN SUCH HEALTH CARE SERVICES ARE PROVIDED, DELIV- ERED, ARRANGED FOR, PAID FOR, OR REIMBURSED BY ANY STATE, DEPARTMENT OR AGENCY; (B) "PHARMACY BENEFITS MANAGER" OR "PBM", MEANS A PERSON OR ENTITY OTHER THAN A PHARMACY OR PHARMACIST ACTING AS AN ADMINISTRATOR IN CONNECTION WITH PHARMACY BENEFITS; (C) "SWITCH COMMUNICATION", MEANS A WRITTEN COMMUNICATION FROM ANY INSURER OR PBM TO A PATIENT OR THE PATIENT'S PHYSICIAN THAT RECOMMENDS A PATIENT'S MEDICATION BE SWITCHED BY THE ORIGINAL PRESCRIBING HEALTH CAREEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04369-01-3 S. 2086 2
PROFESSIONAL TO A DIFFERENT MEDICATION THAN THE MEDICATION ORIGINALLY PRESCRIBED BY THE PRESCRIBING HEALTH CARE PROFESSIONAL. (D) "GENERIC EQUIVALENT" MEANS A DRUG THAT IS THE SAME CHEMICAL COMPOUND AS ANOTHER DRUG AND IS THE SAME DOSAGE FORM, STRENGTH, ROUTE OF ADMINISTRATION, AND INTENDED USE, AND IS LISTED AS EQUIVALENT IN FDA'S APPROVED DRUG PRODUCTS WITH THERAPEUTIC EQUIVALENCE EVALUATIONS (ORANGE BOOK). (E) "THERAPEUTIC SUBSTITUTION" MEANS THE DISPENSING OF A CHEMICALLY DIFFERENT DRUG IN THE PLACE OF THE DRUG ORIGINALLY PRESCRIBED BY THE PATIENT'S PHYSICIAN OR OTHER PRESCRIBING HEALTH CARE PROFESSIONAL, INCLUDING BIOLOGICS AND PLASMA-DERIVED THERAPIES. THERAPEUTIC SUBSTI- TUTION DOES NOT INCLUDE SUBSTITUTION OF A GENERIC EQUIVALENT. S 3302. PRESCRIPTION DRUG DENIALS. (A) A POLICY OF ACCIDENT AND/OR HEALTH INSURANCE THAT COVERS PRESCRIPTION DRUGS SHALL NOT LIMIT, REDUCE, OR DENY COVERAGE FOR ANY DRUG IF, PRIOR TO THE LIMITATION, REDUCTION, OR DENIAL OF COVERAGE: (1) ANY INSURED WAS USING THE DRUG; (2) SUCH INSURED OR INSUREDS WERE COVERED UNDER THE POLICY; AND (3) THE DRUG WAS COVERED UNDER THE POLICY FOR SUCH INSURED INDIVIDUAL OR INDIVIDUALS. (B) A LIMITATION, REDUCTION, OR DENIAL OF COVERAGE INCLUDES REMOVING A DRUG FROM THE FORMULARY OR OTHER DRUG LIST, IMPOSING NEW PRIOR AUTHORI- ZATION OR OTHER UTILIZATION MANAGEMENT TOOLS, OR PLACING THE DRUG ON A FORMULARY TIER THAT INCREASES THE PATIENT'S COST-SHARING OBLIGATIONS OR OTHERWISE INCREASES THE PATIENT'S COST-SHARING OBLIGATIONS. (C) NOTHING IN THIS SECTION SHALL PROHIBIT AN INSURER FROM MAKING UNIFORM CHANGES IN ITS BENEFIT DESIGN THAT APPLY TO ALL COVERED DRUGS, UNIFORMLY REMOVING A DRUG FROM THE FORMULARY LIST FOR ALL INSUREDS, OR INCREASING COST-SHARING OBLIGATIONS MERELY DUE TO A PERCENTAGE COINSU- RANCE PAYMENT THAT NECESSARILY INCREASES WITH AN INCREASE IN THE UNDER- LYING DRUG PRICES. (D) NO THERAPEUTIC SUBSTITUTION OF A MEDICATION BY ANYONE AUTHORIZED TO DISPENSE MEDICATIONS FOR SELF OR HOME ADMINISTRATION BY A CONSUMER SHALL BE ALLOWED WITHOUT THE EXPRESS AUTHORIZATION OF THE ORIGINAL PRESCRIBING PHYSICIAN OR HEALTH CARE PROFESSIONAL AND NOTICE TO THE PATIENT AND THE POLICY SPONSOR AS PROVIDED FOR IN SECTION THREE THOUSAND THREE HUNDRED THREE OF THIS ARTICLE. PRIOR TO MAKING A THERAPEUTIC SUBSTITUTION IN A PATIENT'S PRESCRIPTION INCLUDING BUT NOT LIMITED TO CHANGES IN PRODUCT SELECTION AND CHANGES IN DOSAGE, THE DISPENSING PHAR- MACIST SHALL: (1) VERBALLY REQUEST THE PATIENT TO AGREE TO A CHANGE TO THE PRESCRIPTION, AND EXPLAIN THAT THE CHANGE CANNOT BE MADE UNLESS BOTH THE PATIENT AND THE PRESCRIBING PHYSICIAN (OR OTHER PRESCRIBING HEALTH CARE PROFESSIONAL) EXPRESSLY AGREE TO THE CHANGE; (2) VERBALLY DESCRIBE THE PROPOSED CHANGE THAT WOULD BE MADE TO THE PRESCRIPTION, INCLUDING CLEARLY IDENTIFYING THE ORIGINALLY PRESCRIBED MEDICATION AND THE MEDICATION THAT WOULD BE SUBSTITUTED FOR THE ORIGINALLY PRESCRIBED MEDICATION; AND (3) VERBALLY INFORM THE PATIENT OF THE IMPACT, IF ANY, ON THE PATIENT'S OUT-OF-POCKET COST. S 3303. SWITCH COMMUNICATIONS/CONSUMER RIGHT TO KNOW. (A) ANY TIME A PATIENT'S PRESCRIBED MEDICATION IS RECOMMENDED TO BE SWITCHED TO A MEDI- CATION OTHER THAN THAT ORIGINALLY PRESCRIBED BY THE PRESCRIBING PRACTI- TIONER, A SWITCH COMMUNICATION SHALL BE SENT TO:S. 2086 3
(1) THE PATIENT AND SHALL PROVIDE INFORMATION ABOUT WHY THE SWITCH IS PROPOSED AND THE PATIENT'S RIGHTS FOR REFUSING THE RECOMMENDED CHANGE IN TREATMENT; AND (2) THE POLICY SPONSOR AND SHALL INFORM SUCH SPONSOR OF THE PHARMACEU- TICAL WHOLESALE ACQUISITION COST, SHOWN IN CURRENCY FORM, OF THE RECOM- MENDED MEDICATION AND THE WHOLESALE ACQUISITION COST, SHOWN IN CURRENCY FORM, OF THE ORIGINALLY PRESCRIBED MEDICATION. (B) SUCH SWITCH COMMUNICATION SHALL: (1) CLEARLY IDENTIFY THE ORIGINALLY PRESCRIBED MEDICATION AND THE MEDICATION TO WHICH IT HAS BEEN PROPOSED THAT THE PATIENT SHOULD BE SWITCHED; (2) PROVIDE INFORMATION WHICH IS TRUTHFUL, ACCURATE, AND NOT MISLEAD- ING, WITH APPROPRIATE FAIR BALANCE, CONSISTENT WITH THE UNITED STATES FOOD AND DRUG ADMINISTRATION FOR MEDICATIONS; (3) INCLUDE CURRENT APPROVED PRODUCT LABELING AND INFORMATION ABOUT RISKS ASSOCIATED WITH THE RECOMMENDED MEDICATION; (4) CLEARLY ACKNOWLEDGE THAT NO THERAPEUTIC SUBSTITUTION SHALL BE ALLOWED WITHOUT THE EXPRESS AUTHORIZATION OF THE ORIGINAL PRESCRIBING PHYSICIAN OR OTHER ORIGINAL PRESCRIBING HEALTH CARE PROFESSIONAL; (5) ADVISE THE PATIENT OF HIS OR HER RIGHTS TO DISCUSS THE PROPOSED CHANGE IN TREATMENT BEFORE SUCH A SWITCH TAKES PLACE, INCLUDING A DISCUSSION WITH THE PATIENT'S PRESCRIBING PRACTITIONER, THE FILING OF A GRIEVANCE WITH THE INSURER TO PREVENT THE SWITCH IF SUCH A SWITCH IS BASED ON A FINANCIAL INCENTIVE AND THE FILING OF A GRIEVANCE WITH THE DEPARTMENT; AND (6) EXPLAIN ANY COST-SHARING CHANGES FOR WHICH THE PATIENT IS RESPON- SIBLE. (C) A COPY OF ANY SWITCH COMMUNICATION SENT TO A PATIENT SHALL ALSO BE SENT TO THE PRESCRIBING PRACTITIONER. (D) HEALTH INSURANCE PAYERS, INCLUDING EMPLOYERS RESPONSIBLE FOR PAYING THE HEALTH CARE PREMIUM OR PORTIONS THEREOF, SHALL BE NOTIFIED OF THERAPEUTIC SUBSTITUTIONS AMONG POLICY PARTICIPANTS AND OF ANY THERAPEU- TIC SUBSTITUTION PROGRAMS ADOPTED BY HEALTH PLANS AND PHARMACY BENEFIT MANAGERS IN ANY PLAN OFFERED BY SUCH PREMIUM PAYER OR EMPLOYER. (E) THE DEPARTMENT SHALL CREATE ONE FORM FOR INSURERS AND PHARMACY BENEFIT MANAGERS TO USE IN SWITCH COMMUNICATIONS TO PATIENTS, PRESCRIB- ING PRACTITIONERS, AND HEALTH INSURANCE PAYERS INCLUDING EMPLOYERS. (F) THE DEPARTMENT SHALL PROMULGATE RULES GOVERNING SWITCH COMMUNI- CATIONS. SUCH RULES SHALL INCLUDE, BUT NOT BE LIMITED TO THE FOLLOWING: (1) PROCEDURES FOR VERIFYING THE ACCURACY OF ANY SWITCH COMMUNICATIONS FROM POLICIES OF ACCIDENT AND/OR HEALTH INSURANCE AND PHARMACY BENEFIT MANAGERS TO ENSURE THAT SUCH SWITCH COMMUNICATIONS ARE TRUTHFUL, ACCU- RATE, AND NOT MISLEADING BASED ON COST TO THE PATIENT AND POLICY SPON- SOR, THE PRODUCT PACKAGE LABELING, MEDICAL COMPENDIA RECOGNIZED BY THE DRUG UTILIZATION REVIEW BOARD, AND PEER-REVIEWED MEDICAL LITERATURE, WITH APPROPRIATE REFERENCES PROVIDED; (2) EXCEPT FOR A SUBSTITUTION DUE TO THE FOOD AND DRUG ADMINIS- TRATION'S WITHDRAWAL OF A DRUG FOR PRESCRIPTION, A REQUIREMENT THAT ALL SWITCH COMMUNICATIONS BEAR A PROMINENT LEGEND ON THE FIRST PAGE THAT STATES: "THIS IS NOT A PRODUCT SAFETY NOTICE. THIS IS A PROMOTIONAL ANNOUNCEMENT FROM YOUR HEALTH CARE INSURER OR PHARMACY BENEFITS MANAGER ABOUT ONE OF YOUR CURRENT PRESCRIBED MEDICATIONS."; (3) A REQUIREMENT THAT, THE NOTIFICATION OF REQUEST FOR MEDICATION CHANGE (I) EXPRESSLY STATES THAT THE CHANGE INVOLVES A THERAPEUTIC SUBSTITUTION, NOT A GENERIC SUBSTITUTION; (II) EXPLAIN THE DIFFERENCE BETWEEN THERAPEUTIC SUBSTITUTION AND GENERIC SUBSTITUTION; AND (III)S. 2086 4
PROVIDE A TRUTHFUL, FAIR, AND BALANCED EXPLANATION REGARDING THE POTEN- TIAL, RAMIFICATIONS OF THE THERAPEUTIC SUBSTITUTION, INCLUDING BUT NOT LIMITED TO, THAT MEDICATIONS IN THE SAME THERAPEUTIC CLASS ARE ASSOCI- ATED WITH DIFFERENT RISKS AND BENEFITS AND MAY WORK DIFFERENTLY IN DIFFERENT PATIENTS. S 3304. PENALTIES. (A) ISSUING OR DELIVERING OR CAUSING TO BE ISSUED OR DELIVERED A SWITCH COMMUNICATION THAT HAS NOT BEEN APPROVED AND IS NOT IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION THREE THOUSAND THREE HUNDRED THREE OF THIS ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS. (B) PROVIDING A MISREPRESENTATION OR FALSE STATEMENT IN A SWITCH COMMUNICATION UNDER SECTION THREE THOUSAND THREE HUNDRED THREE OF THIS ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS. (C) ANY OTHER MATERIAL VIOLATION OF SECTION THREE THOUSAND THREE HUNDRED THREE OF THIS ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS. S 3305. PRESCRIPTION DRUG RESTRICTION OVERRIDES. (A) WHEN MEDICATIONS FOR THE TREATMENT OF ANY MEDICAL CONDITION ARE RESTRICTED FOR USE BY AN INSURER OR PBM BY A STEP THERAPY OR FAIL FIRST PROTOCOL, A PRESCRIBER SHALL HAVE ACCESS TO A CLEAR AND CONVENIENT PROCESS TO OVERRIDE SUCH RESTRICTIONS FROM THE INSURER AND MAY EXPEDITIOUSLY OVERRIDE SUCH RESTRICTION IF: (1) THE PREFERRED TREATMENT BY THE INSURER OR THE PBM HAS BEEN INEF- FECTIVE IN THE TREATMENT OF THE COVERED PERSON'S DISEASE OR MEDICAL CONDITION; OR (2) BASED ON SOUND CLINICAL EVIDENCE AND MEDICAL AND SCIENTIFIC EVIDENCE: (A) THE PREFERRED TREATMENT IS EXPECTED TO BE INEFFECTIVE BASED ON THE KNOWN RELEVANT PHYSICAL OR MENTAL CHARACTERISTICS OF THE COVERED PERSON AND KNOWN CHARACTERISTICS OF THE DRUG REGIMEN, AND IS LIKELY TO BE INEF- FECTIVE OR ADVERSELY AFFECT THE DRUG'S EFFECTIVENESS OR PATIENT COMPLI- ANCE; OR (B) THE PREFERRED TREATMENT HAS CAUSED OR IS LIKELY TO CAUSE AN ADVERSE REACTION OR OTHER HARM TO THE COVERED PERSON. (B) THE DURATION OF ANY STEP THERAPY OR FAIL FIRST PROTOCOL SHALL NOT BE LONGER THAN THE PERIOD DEEMED NECESSARY BY THE PRESCRIBING PHYSICIAN OR HEALTH CARE PROFESSIONAL TO DETERMINE THE TREATMENT'S CLINICAL EFFEC- TIVENESS OR A PERIOD OF FOURTEEN DAYS. (C) FOR MEDICATIONS WITH NO GENERIC EQUIVALENT AND FOR WHICH THE PRESCRIBING PHYSICIAN IN THEIR CLINICAL JUDGMENT FEELS THAT NO APPROPRI- ATE THERAPEUTIC ALTERNATIVE IS AVAILABLE AN INSURER OR PBM SHALL PROVIDE ACCESS TO UNITED STATES FOOD AND DRUG ADMINISTRATION (FDA) LABELED MEDI- CATIONS WITHOUT RESTRICTION TO TREAT SUCH MEDICAL CONDITIONS FOR WHICH AN FDA LABELED MEDICATION IS AVAILABLE. (D) NOTHING IN THIS SECTION SHALL REQUIRE COVERAGE FOR AN ADDITIONAL CONDITION NOT ALREADY COVERED BY THE POLICY OR WHICH IS NOT OTHERWISE COVERED BY LAW. S 2. This act shall take effect on the one hundred twentieth day after it shall have become a law.