NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3142
SPONSOR: Titone (MS) TITLE OF BILL: An act to amend the insurance law, in relation to the
prohibition on first fail policies
PURPOSE OR GENERAL IDEA OF BILL:
THIS BILL WOULD AMEND THE INSURANCE LAW BY ADDING ARTICLE 33 WHICH WOULD
PROHIBIT 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. THE BILL WOULD ALSO PROHIBIT
SWITCHING PATIENTS TO A DIFFERENT PRESCRIPTION DRUG WITHOUT THE FULL
KNOWLEDGE AND CONSENT OF THE PRESCRIBING PHYSICIAN AND THE PATIENT,
WOULD REQUIRE SIMPLE, COMMON-SENSE STEPS TO PROTECT PATIENTS FROM THE
RISKS OF ILL-CONSIDERED CHANGES IN THEIR PRESCRIBED MEDICINES. THE BILL
WOULD PROVIDE CONSUMERS WITH SAFEGUARDS, TRANSPARENCY, AND MEDICAL OVER-
SIGHT THAT IS NECESSARY TO ENSURE THEIR HEALTH AND SAFETY
SUMMARY OF SPECIFIC 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 Admin-
istration 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 treat-
ment options. This practice has serious negative consequences for
consumers and the public health system. By limiting the array of medica-
tion 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 perspec-
tive.
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.
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 medica-
tions.
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 over-
ride 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 medica-
tion 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.
PRIOR LEGISLATIVE HISTORY:
2010: A10411 Referred to Insurance
2011-12: A8609 Referred to Insurance
(2013-14:) A4285 - 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 admin-
istrative costs and unnecessary medical treatment.
EFFECTIVE DATE:
This bill would become effective 120 days after it shall have become
law.
