Drug formularies.

Plain English Breakdown

The bill summary does not provide detailed information on the specific circumstances that allow formulary changes during a plan year.

Rules for Prescription Drug Lists

AB-2000 sets rules about how health plans and insurance companies can change their lists of covered prescription drugs during the year, and it also defines a quick process to get approval for non-covered but medically necessary drugs.

What This Bill Does

• Prohibits health care service plans or insurers from changing drug formularies (lists of covered drugs) during a plan year unless certain exceptions apply.
• Allows patients to stay on their current medication if they need to switch to another drug in the same class and the original drug was previously approved for their condition, is prescribed correctly, and is safe and effective.
• Requires plans or insurers to notify patients at least 90 days before any formulary changes that affect them.
• Mandates plans or insurers to report any formulary changes within 30 days to the Department of Managed Health Care or the Department of Insurance.
• Defines an 'expeditious process' for getting approval for non-covered but medically necessary drugs, requiring health care service plans to approve such requests within specific time frames.

Who It Names or Affects

• Health care service plans and insurers that provide prescription drug benefits
• Patients who rely on prescription medications covered by their insurance

Terms To Know

Drug formulary

A list of prescription drugs approved for coverage under a health plan or insurance policy.

Expeditious process

A quick procedure to obtain approval for nonformulary but medically necessary prescription drugs.

Limits and Unknowns

• The bill does not specify the exact penalties for violating its provisions.
• It is unclear how strictly these rules will be enforced or what specific circumstances allow formulary changes during a plan year.

Official Summary Text

AB 2000, as amended, Aguiar-Curry.
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
impose
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.

Current Bill Text

Download Bill PDF