senate Bill S2711

Amended

Regulates step therapy and first fail health insurance policies and contracts

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 23 / Jan / 2013
    • REFERRED TO INSURANCE
  • 08 / Jan / 2014
    • REFERRED TO INSURANCE
  • 14 / Feb / 2014
    • AMEND AND RECOMMIT TO INSURANCE
  • 14 / Feb / 2014
    • PRINT NUMBER 2711A

Summary

Regulates step therapy and first fail health insurance policies and contracts.

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Bill Details

Versions:
S2711
S2711A
Legislative Cycle:
2013-2014
Current Committee:
Senate Insurance
Law Section:
Insurance Law
Laws Affected:
Add Art 33 ยงยง3301 & 3302, Ins L
Versions Introduced in 2011-2012 Legislative Cycle:
A9397, S6464

Sponsor Memo

BILL NUMBER:S2711

TITLE OF BILL: An act to amend the insurance law, in relation to the
regulation of step therapy and first fail policies

PURPOSE:This bill would amend the insurance law by adding Article 33
which would regulate 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.

SUMMARY OF PROVISIONS: This bill would amend the insurance law by
adding a new Article 33 which would ensure prescribers have a clear and
convenient process to override step therapy under specific conditions
when medically in the best interest of the patient.This bill does not
prohibit step therapy, but rather establishes guidelines to ensure
providers have an expeditious process to override step therapy in select
instances where based on sound clinical and medical evidence and Profes-
sional medical judgment providers believe it is medically in the best
interest of the patient not to require failure on an alternative and
chemically different therapeutic agent.

In cases where step therapy is required, the bill would limit the time
period a patient could be subjected to step-therapy (or required to fail
on a treatment) to the period deemed necessary by the prescribing physi-
cian to determine the treatment's clinical effectiveness or a period no
longer than thirty days.

The amendments provided in this bill do not impact generic substitution
authorized by the New York State Medicaid Mandatory Generic Drug
Program.

JUSTIFICATION: Step Therapy or fail first policies is a practice which
requires the least expensive drug in any class to be proscribed to a
patient first, even if the required therapy is a different therapeutic
agent that the patient's physician believes is medically in the best
interest of the patient.If the treatment is ineffective, insurers will
then cover the more expensive treatment options. There are currently no
time limits or restrictions placed on fail first policies. Patients,
including those with serious medical conditions, can be required to fail
for an indefinite period of time before the agent preferred by the
physician can be prescribed. This practice has the potential to result
in 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.

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 clin-
ical 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 prac-
tice medicine without a license. There are significant administrative
costs, associated with these types of policies and most importantly,
consumers can relapse and require more expensive medical interventions
such as hospitalization.

The internal and external appeals process provisions in the insurance
law, Title II (sections 4900-08 and 4910-17), do not provide the neces-
sary protections for patients and physicians regarding access to treat-
ments restricted by fail first protocols. Title II outlines an appeal
process for an "adverse determination"; however a fail first or step
therapy requirement does not qualify as an "adverse determination" under
the definition. The existing appeal right addresses a determination
later in the process than a step therapy override would. For example,
the step therapy override process addresses whether a patient should be
required to try other medications before the desired treatment is
covered, rather than whether the desired treatment is medically neces-
sary and should be covered at all. The proposed legislation would expe-
dite the process and allow for an override at an earlier point in the
treatment process than a final adverse determination.

When medically in the best interest of the patient, prescribers need a
clear process to override the step therapy or fail first requirement.
In cases where step therapy or fail first policies continue to be
applied, the time period a patient could be subjected to step-therapy
(or required to fail on a treatment) should be limited to the period
deemed necessary by the prescribing physician to determine the treat-
ment's clinical effectiveness or a period of no longer than thirty days.

The following states have recently enacted legislation to prohibit or
limit fail first and step therapy practices when medically in the best
interest of the patient: Arkansas, Connecticut, Louisiana, Mississippi,
Texas, Utah, California, and Massachusetts. Patients in New York
currently subject to step therapy and fail first practices require simi-
lar protections.

LEGISLATIVE HISTORY: 2012: S.6464/A.9397 Referred to Insurance

FISCAL IMPLICATIONS: Undetermined at this time.

EFFECTIVE DATE: This act shall take on the 120th day after it shall
become law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2711

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            January 23, 2013
                               ___________

Introduced  by  Sen.  YOUNG  -- 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 regulation of step
  therapy and 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
                     REGULATION OF STEP THERAPY AND
                           FIRST FAIL POLICIES
SECTION 3301. DEFINITIONS.
        3302. 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, INCLUDING MANAGED CARE PROVIDERS AS DEFINED IN SECTION THREE
HUNDRED SIXTY-FOUR-J OF THE SOCIAL SERVICES LAW;
  (B)  "PHARMACY  BENEFIT  MANAGEMENT"  OR  "PBM" SHALL MEAN THE SERVICE
PROVIDED TO AN INSURER, DIRECTLY OR THROUGH  ANOTHER  ENTITY;  INCLUDING
THE  PROCUREMENT  OF  PRESCRIPTION  DRUGS  TO  BE  DISPENSED  TO COVERED
PERSONS, OR THE ADMINISTRATION OR MANAGEMENT OF PRESCRIPTION DRUG  BENE-
FITS INCLUDING, BUT NOT LIMITED TO, ANY OF THE FOLLOWING:
  (1) A MAIL ORDER PHARMACY;
  (2) CLAIMS PROCESSING, RETAIL NETWORK MANAGEMENT AND PAYMENT OF CLAIMS
TO PHARMACIES FOR DISPENSING PRESCRIPTION DRUGS;
  (3) CLINICAL OR OTHER FORMULARY, OR PREFERRED DRUG LIST DEVELOPMENT OR
MANAGEMENT;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05355-01-3

S. 2711                             2

  (4)  NEGOTIATION  OR  ADMINISTRATION  OF  REBATES,  DISCOUNTS, PAYMENT
DIFFERENTIALS OR  OTHER  INCENTIVES  FOR  THE  INCLUSION  OF  PARTICULAR
PRESCRIPTION  DRUGS  IN A PARTICULAR CATEGORY OR TO PROMOTE THE PURCHASE
OF PARTICULAR PRESCRIPTION DRUGS;
  (5)  PATIENT  COMPLIANCE, THERAPEUTIC INTERVENTION AND GENERIC SUBSTI-
TUTION PROGRAMS; AND
  (6) DISEASE MANAGEMENT.
  S 3302. 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)  SUCH  PRESCRIBER,  IN  HIS OR HER PROFESSIONAL JUDGMENT, BELIEVES
THAT THE PREFERRED TREATMENT BY THE INSURER OR THE PBM HAS BEEN INEFFEC-
TIVE IN THE TREATMENT OF THE COVERED PERSON'S DISEASE OR MEDICAL  CONDI-
TION; OR
  (2)  BASED  ON  SOUND  CLINICAL  EVIDENCE  AND  MEDICAL AND SCIENTIFIC
EVIDENCE:
  (A) SUCH PRESCRIBER, IN HIS OR  HER  PROFESSIONAL  JUDGMENT,  BELIEVES
THAT  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) SUCH PRESCRIBER, IN HIS OR  HER  PROFESSIONAL  JUDGMENT,  BELIEVES
THAT 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 EITHER (1) THE PERIOD DEEMED NECESSARY BY THE PRESCRIBING
PHYSICIAN OR HEALTH CARE PROFESSIONAL TO DETERMINE THE TREATMENT'S CLIN-
ICAL EFFECTIVENESS, OR (2) A PERIOD OF THIRTY DAYS.
  (C) FOR MEDICATIONS WITH NO GENERIC EQUIVALENT AND FOR WHICH THE PRES-
CRIBER IN HIS OR HER CLINICAL  JUDGMENT  BELIEVES  THAT  NO  APPROPRIATE
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 CONTRACT, 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.

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