Prohibits first fail accident and/or health insurance policies

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 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.

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

A.10411 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.