Maryland Medical Assistance Program and Health Insurance - Coverage and Utilization Review - Drugs Reviewed by the Prescription Drug Affordability Board

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*sb0837*

SENATE BILL 837
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By: Senators Ready and Lam
Introduced and read first time: February 6, 2026
Assigned to: Finance

A BILL ENTITLED

AN ACT concerning 1

Maryland Medical Assistance Program and Health Insurance – Coverage and 2
Utilization Review – Drugs Reviewed by the Prescription Drug Affordability 3
Board 4

FOR the purpose of prohibiting a managed care organization and certain insurers , 5
nonprofit health service plans, and health maintenance organizations from requiring 6
a prior authorization or step therapy or fail –first protocol under certain 7
circumstances for prescription drugs that have been reviewed by the Prescription 8
Drug Affordability Board; prohibiting a managed care organization and certain 9
insurers, nonprofit health service plans, and health maintenance organizations from 10
limiting, restricting, or e xcluding coverage of prescription drugs that have been 11
reviewed by the Board under certain circumstances; and generally relating to 12
coverage and utilization review requirements for drugs reviewed by the Prescription 13
Drug Affordability Board. 14

BY adding to 15
Article – Health – General 16
Section 15–102.3(p) and 15–103(b)(34) and (35) 17
Annotated Code of Maryland 18
(2023 Replacement Volume and 2025 Supplement) 19

BY repealing and reenacting, without amendments, 20
Article – Insurance 21
Section 15–142(a) and (b) 22
Annotated Code of Maryland 23
(2017 Replacement Volume and 2025 Supplement) 24

BY adding to 25
Article – Insurance 26
Section 15–142(f) 27
Annotated Code of Maryland 28
2 SENATE BILL 837

(2017 Replacement Volume and 2025 Supplement) 1

BY repealing and reenacting, with amendments, 2
Article – Insurance 3
Section 15–142(f), 15–831, and 15–854 4
Annotated Code of Maryland 5
(2017 Replacement Volume and 2025 Supplement) 6

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 7
That the Laws of Maryland read as follows: 8

Article – Health – General 9

15–102.3. 10

(P) THE PROVISIONS OF § 15–142(F) OF THE INSURANCE ARTICLE APPLY 11
TO MANAGED CARE ORGANIZATIONS. 12

15–103. 13

(b) (34) A MANAGED CARE ORGANIZ ATION MAY NOT REQUIRE A PRIOR 14
AUTHORIZATION FOR A PRESCRIPTION DRUG THAT HAS BEEN REVIEW ED BY THE 15
PRESCRIPTION DRUG AFFORDABILITY BOARD IF THE BOARD: 16

(I) HAS N OT MADE A DETERMINAT ION THAT THE 17
PRESCRIPTION DRUG HA S LED OR WILL LEAD T O AN AFFORDABILITY C HALLENGE 18
UNDER § 21–2C–09 OF THIS ARTICLE; 19

(II) HAS MADE A POLICY RECOMMENDATION RELATING TO THE 20
DRUG TO THE GENERAL ASSEMBLY UNDER § 21–2C–09 OF THIS ARTICLE; OR 21

(III) HAS SET AN UPPER PAYMENT LIMIT FOR THE DRUG UNDER 22
§ 21–2C–14 OF THIS ARTICLE. 23

(35) (I) IN THIS PARAGRAPH , “LIMIT, RESTRICT, OR EXCLUDE ” 24
INCLUDES: 25

1. LIMITING OR REDUCING THE MAXIMUM COVERAGE 26
OF PRESCRIPTION DRUG BENEFITS; 27

2. INCREASING THE COST S HARING FOR A COVERED 28
PRESCRIPTION DRUG; 29

SENATE BILL 837 3

3. MOVING A PRESCRIPTION DRUG TO A MORE 1
RESTRICTIVE TIER IF THE MANAGED CARE ORGANIZATION USES A FORMULARY WITH 2
TIERS; AND 3

4. REMOVING A PRESCRIPTI ON DRUG FROM A 4
FORMULARY, UNLESS: 5

A. THE U.S. FOOD AND DRUG ADMINISTRATION HAS 6
ISSUED A STATEMENT ABOUT THE DRUG THAT CALLS INTO QUESTION THE CLINICAL 7
SAFETY OF THE DRUG; OR 8

B. THE MANUFACTURER OF T HE DRUG HAS NOTIFIED 9
THE U.S. FOOD AND DRUG ADMINISTRATION OF A M ANUFACTURING 10
DISCONTINUANCE OR PO TENTIAL DISCONTINUANCE AS REQUIRED UNDER § 506C 11
OF THE FEDERAL FOOD, DRUG, AND COSMETIC ACT. 12

(II) A MANAGED CARE ORGANIZ ATION MAY NOT LIMIT , 13
RESTRICT, OR EXCLUDE COVERAGE OF A PRESCRIPTION DR UG ON THE MANAGED 14
CARE ORGANIZATION ’S FORMULARY IF THE PRESCRIPTION DRUG HAS BEEN 15
REVIEWED BY THE PRESCRIPTION DRUG AFFORDABILITY BOARD AND THE BOARD: 16

1. HAS NOT MADE A DETERMINATION THAT THE 17
PRESCRIPTION DRUG HA S LED OR WILL LEAD T O AN AFFORDABILITY C HALLENGE 18
UNDER § 21–2C–09 OF THIS ARTICLE; 19

2. HAS MADE A POLICY RECOMMENDAT ION RELATING 20
TO THE DRUG TO THE GENERAL ASSEMBLY UNDER § 21–2C–09 OF THIS ARTICLE ; 21
OR 22

3. HAS SET AN UPPER PAYMENT LIM IT FOR THE DRUG 23
UNDER § 21–2C–14 OF THIS ARTICLE. 24

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws o f Maryland read 25
as follows: 26

Article – Insurance 27

15–142. 28

(a) (1) In this section the following words have the meanings indicated. 29

(2) “Step therapy drug” means a prescription drug or sequence of 30
prescription drugs required to be used under a step therapy or fail–first protocol. 31

4 SENATE BILL 837

(3) “Step therapy exception request” means a request to override a step 1
therapy or fail–first protocol. 2

(4) (i) “Step therapy or fail–first protocol” means a protocol established 3
by an insurer, a nonprofit health service plan, or a health maintenance organization that 4
requires a prescription drug or sequence of prescription drugs to be used by an insured or 5
an enrollee before a prescription drug ordered by a prescriber for the insured or the enrollee 6
is covered. 7

(ii) “Step therapy or fail –first protocol” includes a protocol that 8
meets the definition under subparagraph (i) of this paragraph regardless of the name, label, 9
or terminology used by the insurer, nonprofit health service plan, or health maintenance 10
organization to identify the protocol. 11

(5) “Supporting medical information” means: 12

(i) a paid claim from an entity subject to this section for an insured 13
or an enrollee; 14

(ii) a pharmacy record that documents that a prescription has been 15
filled and delivere d to an insured or an enrollee, or a representative of an insured or an 16
enrollee; or 17

(iii) other information mutually agreed on by an entity subject to this 18
section and the prescriber of an insured or an enrollee. 19

(b) (1) This section applies to: 20

(i) insurers and nonprofit health service plans that provide hospital, 21
medical, or surgical benefits to individuals or groups on an expense –incurred basis under 22
health insurance policies or contracts that are issued or delivered in the State; and 23

(ii) health maintenance organizations that provide hospital, 24
medical, or surgical benefits to individuals or groups under contracts that are issued or 25
delivered in the State. 26

(2) An insurer, a nonprofit health service plan, or a health maintenance 27
organization that provides coverage for prescription drugs through a pharmacy benefits 28
manager is subject to the requirements of this section. 29

(F) AN ENTITY SUBJECT TO THIS SECTION MAY NOT IMPOSE A STEP 30
THERAPY OR FAIL –FIRST PROTOCOL ON AN INSURED OR AN ENROLL EE FOR A 31
PRESCRIPTION DRUG THAT HAS BEEN REVIEW ED BY THE PRESCRIPTION DRUG 32
AFFORDABILITY BOARD IF THE BOARD: 33

SENATE BILL 837 5

(1) HAS NOT MADE A DETERMINATIO N THAT THE PRESCRIPT ION 1
DRUG HAS LED OR WILL LEAD TO AN AFFORDABI LITY CHALLENGE UNDER § 2
21–2C–09 OF THE HEALTH – GENERAL ARTICLE; 3

(2) HAS MADE A POLICY RECOMMENDATION RELATING TO THE DRUG 4
TO THE GENERAL ASSEMBLY UNDER § 21–2C–09 OF THE HEALTH – GENERAL 5
ARTICLE; OR 6

(3) HAS SET AN UPPER PAYMENT LIM IT FOR THE DRUG UNDER § 7
21–2C–14 OF THE HEALTH – GENERAL ARTICLE. 8

[(f)] (G) (1) An entity subject to this section shall establish a process for 9
requesting an exception to a step therapy or fail–first protocol that is: 10

(i) clearly described, including the specific information and 11
documentation, if needed, that must be submitted by the prescriber to be considered a 12
complete step therapy exception request; 13

(ii) easily accessible to the prescriber; and 14

(iii) posted on the entity’s website. 15

(2) A step therapy exception request shall be granted if, based on the 16
professional judgment of the prescriber and any information and documentation required 17
under paragraph (1)(i) of this subsection: 18

(i) the step therapy drug is contraindicated or will likely cause an 19
adverse reaction to the insured or enrollee; 20

(ii) the step therapy drug is expected to be ineffective based on the 21
known clinical characteristics of the insured or enrollee and the known characteristics of 22
the prescription drug regimen; 23

(iii) the insured or enrollee is stable on a prescription drug prescribed 24
for the medical condition under consideration while covered under the policy or contract of 25
the entity or under a previous source of coverage; or 26

(iv) while covered under the policy or contract of the entity or a 27
previous source of coverage, the insured or enrollee has tried a prescription drug that: 28

1. is in the same pharmacologic class or has the same 29
mechanism of action as the step therapy drug; and 30

2. was discontinued by the prescriber due to lack of efficacy 31
or effectiveness, diminished effect, or an adverse event. 32

6 SENATE BILL 837

(3) On granting a step therapy exception request, an entity subject to this 1
section shall authorize coverage for the prescription drug ordered by the prescriber for an 2
insured or enrollee. 3

(4) An enrollee or insured may appeal a step therapy exception request 4
denial in accordance with Subtitle 10A or Subtitle 10B of this title. 5

(5) This subsection may not be construed to: 6

(i) prevent: 7

1. an entity subject to this section from requiring an insured 8
or enrollee to try an AB –rated generic equivalent or interchangeable biological product 9
before providing coverage for the equivalent branded prescription drug; or 10

2. a health care provider from prescribing a prescription 11
drug that is determined to be medically appropriate; or 12

(ii) require an entity subject to this section to provide coverage for a 13
prescription drug that is not covered by a policy or contract of the entity. 14

(6) An entity subject to this section may use an existing step therapy 15
exception process that satisfies the requirements under this subsection. 16

15–831. 17

(a) (1) In this section the following words have the meanings indicated. 18

(2) “Authorized prescriber” has the meaning stated in § 12 –101 of the 19
Health Occupations Article. 20

(3) “Formulary” means a list of prescription drugs or devices that are 21
covered by an entity subject to this section. 22

(4) (i) “Member” means an individual entitled to health care benefits 23
for prescription drugs or devices under a policy issued or delivered in the State by an entity 24
subject to this section. 25

(ii) “Member” includes a subscriber. 26

(b) (1) This section applies to: 27

(i) insurers and nonprofit health service plans that provide coverage 28
for prescription drugs and devices under individual, group, or blanket health insurance 29
policies or contracts that are issued or delivered in the State; and 30

SENATE BILL 837 7

(ii) health maintenance organizations that provide coverage for 1
prescription drugs and devices under individual or group contracts that are issued or 2
delivered in the State. 3

(2) An insurer, nonprofit health service plan, or health maintenance 4
organization that provides coverage for prescription drugs and devices through a pharmacy 5
benefits manager is subject to the requirements of this section. 6

(3) This section does not apply to a managed care organization as defined 7
in § 15–101 of the Health – General Article. 8

(c) Each entity subject to this section that limits its coverage of prescription drugs 9
or devices to those in a formulary shall establish and implement a procedure by which a 10
member may: 11

(1) receive a prescription drug or device that is not in the entity’s formulary 12
or has been removed from the entity’s formulary in accordance with this section; or 13

(2) continue the same cost sharing requirements if the entity has moved 14
the prescription drug or device to a higher deductible, copayment, or coinsurance tier. 15

(d) The procedure shall provide for coverage for a prescription drug or device in 16
accordance with subsection (c) of this section if, in the judgment of the authorized 17
prescriber: 18

(1) there is no equivalent prescription drug or device in the entity’s 19
formulary in a lower tier; 20

(2) an equivalent prescription drug or device in the entity’s formulary in a 21
lower tier: 22

(i) has been ineffective in treating the disease or condition of the 23
member; or 24

(ii) has caused or is likely to cause an adverse reaction or other harm 25
to the member; or 26

(3) for a contraceptive prescription drug or device, the prescription drug or 27
device that is not on the formulary is medically necessary for the member to adhere to the 28
appropriate use of the prescription drug or device. 29

(e) A decision by an entity subject to this section not to provide access to or 30
coverage of a prescription drug or device in accordance with this section constitutes an 31
adverse decision as defined under Subtitle 10A of this title if the decision is based on a 32
finding that the proposed drug or device is not medically necessary, appropriate, or 33
efficient. 34

8 SENATE BILL 837

(f) An entity subject to this section that removes a drug from its formulary or 1
moves a prescription drug or device to a benefit tier that requires a member to pay a higher 2
deductible, copayment, or coinsurance amount for the prescription drug or device shall 3
provide a member who is currently on the prescription drug or device and the member’s 4
health care provider with: 5

(1) notice of the change at least 30 days before the change is implemented; 6
and 7

(2) in the notice required under item (1) of this subsection, the process for 8
requesting an exemption through the procedure adopted in accordance with this section. 9

(G) (1) IN THIS PARAGRAPH, “LIMIT, RESTRICT, OR EXCLUDE” INCLUDES: 10

(I) LIMITING OR REDUCING THE MAXI MUM COVERAGE OF 11
PRESCRIPTION DRUG BENEFITS; 12

(II) INCREASING THE COST SHARING FOR A COVERED 13
PRESCRIPTION DRUG; 14

(III) MOVING A PRESCRIPTION DRUG TO A M ORE RESTRICTIVE 15
TIER IF THE ENTITY USES A FORMULARY WITH TIERS; AND 16

(IV) REMOVING A PRESCRIPTION DRUG FROM A FORMULARY , 17
UNLESS: 18

1. THE U.S. FOOD AND DRUG ADMINISTRATION HAS 19
ISSUED A STATEMENT ABOUT THE DRUG THAT CALLS INTO QUESTION THE CLINICAL 20
SAFETY OF THE DRUG; OR 21

2. THE MANUFACTURER OF THE DRUG HAS NOTIFIED 22
THE U.S. FOOD AND DRUG ADMINISTRATION OF A M ANUFACTURING 23
DISCONTINUANCE OR PO TENTIAL DISCONTINUANCE AS REQUIRED UNDER § 506C 24
OF THE FEDERAL FOOD, DRUG, AND COSMETIC ACT. 25

(2) AN ENTITY SUBJECT TO THIS SECTION MAY NOT LIMIT, RESTRICT, 26
OR EXCLUDE COVERAGE OF A PRESCRIPTION DR UG ON THE ENTITY ’S FORMULARY 27
IF THE PRESCRIPTION DRUG HAS BEEN REVIEWED BY THE PRESCRIPTION DRUG 28
AFFORDABILITY BOARD AND THE BOARD: 29

(I) HAS NOT MADE A DETERMINA TION THAT THE 30
PRESCRIPTION DRUG HA S LED OR WILL LEAD T O AN AFFORDABILITY C HALLENGE 31
UNDER § 21–2C–09 OF THE HEALTH – GENERAL ARTICLE; 32

SENATE BILL 837 9

(II) HAS MADE A POLICY RECOMMENDATION RELATING TO THE 1
DRUG TO THE GENERAL ASSEMBLY UNDER § 21–2C–09 OF THE HEALTH – GENERAL 2
ARTICLE; OR 3

(III) HAS SET AN UPPER PAYMENT LIMIT FOR THE DRUG UNDER 4
§ 21–2C–14 OF THE HEALTH – GENERAL ARTICLE. 5

15–854. 6

(a) (1) This section applies to: 7

(i) insurers and nonprofit health service plans that provide coverage 8
for prescription drugs through a pharmacy benefit under individual, group, or blanket 9
health insurance policies or contracts that are issued or delivered in the State; and 10

(ii) health maintenance organizations that provide coverage for 11
prescription drugs t hrough a pharmacy benefit under individual or group contracts that 12
are issued or delivered in the State. 13

(2) An insurer, a nonprofit health service plan, or a health maintenance 14
organization that provides coverage for prescription drugs through a pharma cy benefits 15
manager or that contracts with a private review agent under Subtitle 10B of this title is 16
subject to the requirements of this section. 17

(3) This section does not apply to a managed care organization as defined 18
in § 15–101 of the Health – General Article. 19

(b) (1) (i) If an entity subject to this section requires a prior authorization 20
for a prescription drug, the prior authorization request shall allow a health care provider 21
to indicate whether a prescription drug is to be used to treat a chronic condition. 22

(ii) If a health care provider indicates that the prescription drug is 23
to treat a chronic condition, an entity subject to this section may not request a 24
reauthorization for a repeat prescription for the prescription drug for 1 year or fo r the 25
standard course of treatment for the chronic condition being treated, whichever is less. 26

(2) For a prior authorization that is filed electronically, the entity shall 27
maintain a database that will prepopulate prior authorization requests with an in sured’s 28
available insurance and demographic information. 29

(C) AN ENTITY SUBJECT TO THIS SECTION MAY NOT REQUIRE A PRIOR 30
AUTHORIZATION FOR A PRESCRIPTION DRUG TH AT HAS BEEN REVIEWED BY THE 31
PRESCRIPTION DRUG AFFORDABILITY BOARD IF THE BOARD: 32

10 SENATE BILL 837

(1) HAS NOT MADE A DETERMINATION THAT THE PRESCRIPTIO N 1
DRUG HAS LED OR WILL LEAD TO AN AFFORDABI LITY CHALLENGE UNDER § 2
21–2C–09 OF THE HEALTH – GENERAL ARTICLE; 3

(2) HAS MADE A POLICY RECOMMENDATION RELATING TO THE DRUG 4
TO THE GENERAL ASSEMBLY UNDER § 21–2C–09 OF THE HEALTH – GENERAL 5
ARTICLE; OR 6

(3) HAS SET AN UPPER PAYMENT LIMIT FOR THE DRUG UNDER § 7
21–2C–14 OF THE HEALTH – GENERAL ARTICLE. 8

[(c)] (D) (1) On receipt of information documenting a prior authorization 9
from the insured or from the insured’s health care provider, an entity subject to this section 10
shall honor a prior authorization granted to an insured from a previous entity for at least 11
the lesser of 90 days or the length of the course of treatment. 12

(2) During the time period described in paragraph (1) of this subsection, an 13
entity may perform its own review to grant a prior authorization for the prescription drug. 14

[(d)] (E) (1) An entity subject to this section shall honor a prior authorization 15
issued by the entity for a prescription dru g and may not require a health care provider to 16
submit a request for another prior authorization for the prescription drug: 17

(i) if the insured changes health benefit plans that are both covered 18
by the same entity and the prescription drug is a covered benefit under the current health 19
benefit plan; or 20

(ii) except as provided in paragraph (2) of this subsection, when the 21
dosage for the approved prescription drug changes and the change is consistent with federal 22
Food and Drug Administration labeled dosages. 23

(2) Except as provided in § 15–851 of this subtitle, an entity may require a 24
prior authorization for a change in dosage for an opioid under this subsection. 25

[(e)] (F) (1) If an entity under this section implements a new prior 26
authorization requirement for a prescription drug, the entity shall provide notice of the new 27
requirement at least 60 days before the implementation of a new prior authorization 28
requirement: 29

(i) in writing to any insured who is prescribed the prescription drug; 30
and 31

(ii) either in writing or electronically to all contracted health care 32
providers. 33

SENATE BILL 837 11

(2) The notice required under paragraph (1) of this subsection shall 1
indicate that the insured may remain on the prescription drug at the time of 2
reauthorization in accordance with subsection [(g)] (H) of this section. 3

[(f)] (G) (1) Except as provided in paragraph (2) of this subsection, an entity 4
subject to this section may not require more than one prior authorization if two or more 5
tablets of different dosage strengths of the same prescription drug are: 6

(i) prescribed at the same time as part of an insured’s treatment 7
plan; and 8

(ii) manufactured by the same manufacturer. 9

(2) This subsection does not prohibit an entity from requiring more than 10
one prior authori zation if the prescription is for two or more tablets of different dosage 11
strengths of an opioid that is not an opioid partial agonist. 12

[(g)] (H) (1) An entity subject to this section may not issue an adverse 13
decision on a reauthorization for the same pr escription drug or request additional 14
documentation from the prescriber for the reauthorization request if: 15

(i) the prescription drug is: 16

1. an immune globulin (human) as defined in 21 C.F.R. § 17
640.100; or 18

2. used for the treatment of a mental disorder listed in the 19
most recent edition of the Diagnostic and Statistical Manual of Mental Disorders published 20
by the American Psychiatric Association; 21

(ii) the entity previously approved a prior authorization for the 22
prescription drug for the insured; 23

(iii) the insured has been treated with the prescription drug without 24
interruption since the initial approval of the prior authorization; and 25

(iv) the prescriber attests that, based on the prescriber’s professional 26
judgment, the prescription drug continues to be necessary to effectively treat the insured’s 27
condition. 28

(2) If the prescription drug that is being requested has been removed from 29
the formulary or has been moved to a higher deductible, copayment, or coinsurance tier, 30
the enti ty shall provide the insured and insured’s health care provider the information 31
required under § 15–831 of this subtitle. 32

12 SENATE BILL 837

SECTION 3. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall 1
apply to all policies, contracts, and health benefit plans issued, delivered, or renewed in the 2
State on or after January 1, 2027. 3

SECTION 4. AND BE IT FURTHER ENACTED, That Sections 2 and 3 of this Act 4
shall take effect January 1, 2027. 5

SECTION 5. AND BE IT FURTHER ENACTED, That, except as provided in Section 6
4 of this Act, this Act shall take effect July 1, 2026. 7