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This entry was published on 2022-03-04
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SECTION 3242
Prescription drug coverage
Insurance (ISC) CHAPTER 28, ARTICLE 32
§ 3242. Prescription drug coverage. (a) Every insurer that delivers or
issues for delivery in this state a policy that provides coverage for
prescription drugs shall, with respect to the prescription drug
coverage, publish an up-to-date, accurate, and complete list of all
covered prescription drugs on its formulary drug list, including any
tiering structure that it has adopted and any restrictions on the manner
in which a prescription drug may be obtained, in a manner that is easily
accessible to insureds and prospective insureds. The formulary drug list
shall clearly identify the preventive prescription drugs that are
available without annual deductibles or coinsurance, including
co-payments.

(b) (1) Every policy delivered or issued for delivery in this state
that provides coverage for prescription drugs shall include in the
policy a process that allows an insured, the insured's designee, or the
insured's prescribing health care provider to request a formulary
exception. With respect to the process for such a formulary exception,
an insurer shall follow the process and procedures specified in article
forty-nine of this chapter and article forty-nine of the public health
law, except as otherwise provided in paragraphs two, three, four and
five of this subsection.

(2) (A) An insurer shall have a process for an insured, the insured's
designee, or the insured's prescribing health care provider to request a
standard review that is not based on exigent circumstances of a
formulary exception for a prescription drug that is not covered by the
policy.

(B) An insurer shall make a determination on a standard exception
request that is not based on exigent circumstances and notify the
insured or the insured's designee and the insured's prescribing health
care provider by telephone of its coverage determination no later than
seventy-two hours following receipt of the request.

(C) An insurer that grants a standard exception request that is not
based on exigent circumstances shall provide coverage of the
non-formulary prescription drug for the duration of the prescription,
including refills.

(D) For the purpose of this subsection, "exigent circumstances" means
when an insured is suffering from a health condition that may seriously
jeopardize the insured's life, health, or ability to regain maximum
function or when an insured is undergoing a current course of treatment
using a non-formulary prescription drug.

(3) (A) An insurer shall have a process for an insured, the insured's
designee, or the insured's prescribing health care provider to request
an expedited review based on exigent circumstances of a formulary
exception for a prescription drug that is not covered by the policy.

(B) An insurer shall make a determination on an expedited review
request based on exigent circumstances and notify the insured or the
insured's designee and the insured's prescribing health care provider by
telephone of its coverage determination no later than twenty-four hours
following receipt of the request.

(C) An insurer that grants an exception based on exigent circumstances
shall provide coverage of the non-formulary prescription drug for the
duration of the exigent circumstances.

(4) An insurer that denies an exception request under paragraph two or
three of this subsection shall provide written notice of its
determination to the insured or the insured's designee and the insured's
prescribing health care provider within three business days of receipt
of the exception request. The written notice shall be considered a final
adverse determination under section four thousand nine hundred four of
this chapter or section four thousand nine hundred four of the public
health law. Written notice shall also include the name or names of
clinically appropriate prescription drugs covered by the insurer to
treat the insured.

(5) (A) If an insurer denies a request for an exception under
paragraph two or three of this subsection, the insured, the insured's
designee, or the insured's prescribing health care provider shall have
the right to request that such denial be reviewed by an external appeal
agent certified by the superintendent pursuant to section four thousand
nine hundred eleven of this chapter in accordance with article
forty-nine of this chapter or article forty-nine of the public health
law.

(B) An external appeal agent shall make a determination on the
external appeal and notify the insurer, the insured or the insured's
designee, and the insured's prescribing health care provider by
telephone of its determination no later than seventy-two hours following
the external appeal agent's receipt of the request, if the original
request was a standard exception request under paragraph two of this
subsection. The external appeal agent shall notify the insurer, the
insured or the insured's designee, and the insured's prescribing health
care provider in writing of the external appeal determination within two
business days of rendering such determination.

(C) An external appeal agent shall make a determination on the
external appeal and notify the insurer, the insured or the insured's
designee, and the insured's prescribing health care provider by
telephone of its determination no later than twenty-four hours following
the external appeal agent's receipt of the request, if the original
request was an expedited exception request under paragraph three of this
subsection and the insured's prescribing health care provider attests
that exigent circumstances exist. The external appeal agent shall notify
the insurer, the insured or the insured's designee, and the insured's
prescribing health care provider in writing of the external appeal
determination within seventy-two hours of the external appeal agent's
receipt of the external appeal.

(D) An external appeal agent shall make a determination in accordance
with subparagraph (A) of paragraph four of subsection (b) of section
four thousand nine hundred fourteen of this chapter or subparagraph (A)
of paragraph (d) of subdivision two of section four thousand nine
hundred fourteen of the public health law. When making a determination,
the external appeal agent shall consider whether the formulary
prescription drug covered by the insurer will be or has been
ineffective, would not be as effective as the non-formulary prescription
drug, or would have adverse effects.

(E) If an external appeal agent overturns the insurer's denial of a
standard exception request under paragraph two of this subsection, then
the insurer shall provide coverage of the non-formulary prescription
drug for the duration of the prescription, including refills. If an
external appeal agent overturns the insurer's denial of an expedited
exception request under paragraph three of this subsection, then the
insurer shall provide coverage of the non-formulary prescription drug
for the duration of the exigent circumstances.

* (c)(1) Except as otherwise provided in paragraph three of this
subsection, an insurer shall not:

(A) remove a prescription drug from a formulary;

(B) move a prescription drug to a tier with a larger deductible,
copayment, or coinsurance if the formulary includes two or more tiers of
benefits providing for different deductibles, copayments or coinsurance
applicable to the prescription drugs in each tier; or

(C) add utilization management restrictions to a prescription drug on
a formulary, unless such changes occur at the time of enrollment,
issuance or renewal of coverage.

(2) Prohibitions provided in paragraph one of this subsection shall
apply beginning on the date on which a plan year begins and through the
end of such plan year.

(3) (A) An insurer with a formulary that includes two or more tiers of
benefits providing for different deductibles, copayments or coinsurance
applicable to prescription drugs in each tier may move a prescription
drug to a tier with a larger deductible, copayment or coinsurance if an
AB-rated generic equivalent or interchangeable biological product for
such prescription drug is added to the formulary at the same time.

(B) An insurer may remove a prescription drug from a formulary if the
federal Food and Drug Administration determines that such prescription
drug should be removed from the market, including new utilization
management restrictions issued pursuant to federal Food and Drug
Administration safety concerns.

(C) An insurer with a formulary that includes two or more tiers of
benefits providing for different copayments applicable to prescription
drugs may move a prescription drug to a tier with a larger copayment
during the plan year, provided the change is not applicable to an
insured who is already receiving such prescription drug or has been
diagnosed with or presented with a condition on or prior to the start of
the plan year that is treated by such prescription drug or is a
prescription drug that is or would be part of the insured's treatment
regimen for such condition.

(4) An insurer shall provide notice to insureds of the intent to
remove a prescription drug from a formulary or alter deductible,
copayment or coinsurance requirements in the upcoming plan year, ninety
days prior to the start of the plan year. Such notice of impending
formulary and deductible, copayment or coinsurance changes shall also be
posted on the insurer's online formulary and in any prescription drug
finder system that the insurer provides to the public.

(5) The provisions of this subsection shall not supersede the terms of
a collective bargaining agreement, or the rights of labor representation
groups to collectively bargain changes to the formularies.

* NB Effective January 1, 2023