NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5214A
SPONSOR: Titone (MS) 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 necessary protections for patients and physi-
cians regarding access to treatments 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 over-
ride 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 necessary and should be covered at all. The proposed legis-
lation would expedite the process and allow for an override at an earli-
er 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 requite simi-
lar protections.
LEGISLATIVE HISTORY: (2011-12) A.9397 Referred to Insurance (2013-14)
FISCAL IMPLICATIONS: Undetermined at this time.
EFFECTIVE DATE: This act shall take effect on the 120th day after
becoming law.
STATE OF NEW YORK
________________________________________________________________________
5214--A
2013-2014 Regular Sessions
IN ASSEMBLY
February 21, 2013
___________
Introduced by M. of A. TITONE, RODRIGUEZ, ROBERTS, GUNTHER, ZEBROWSKI,
QUART, PEOPLES-STOKES, MONTESANO, CUSICK, BRINDISI, TEDISCO -- Multi-
Sponsored by -- M. of A. FAHY, GALEF, McLAUGHLIN, PERRY, RIVERA, SCHI-
MEL, SEPULVEDA, WEISENBERG -- read once and referred to the Committee
on Insurance -- recommitted to the Committee on Insurance in accord-
ance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee
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:
1 Section 1. The insurance law is amended by adding a new article 33 to
2 read as follows:
3 ARTICLE 33
4 REGULATION OF STEP THERAPY AND
5 FIRST FAIL POLICIES
6 Section 3301. Definitions.
7 3302. Prescription drug restriction overrides.
8 § 3301. Definitions. As used in this article:
9 (a) "Insurer" shall mean any person or entity who offers a policy of
10 accident and/or health insurance pursuant to section three thousand two
11 hundred sixteen, three thousand two hundred twenty-one, or four thousand
12 three hundred three of this chapter or article forty-four of the public
13 health law.
14 (b) "Pharmacy benefit management" or "PBM" shall mean the service
15 provided to an insurer, directly or through another entity; including
16 the procurement of prescription drugs to be dispensed to covered
17 persons, or the administration or management of prescription drug bene-
18 fits including, but not limited to, any of the following:
19 (1) a mail order pharmacy;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05355-02-4
A. 5214--A 2
1 (2) claims processing, retail network management and payment of claims
2 to pharmacies for dispensing prescription drugs;
3 (3) clinical or other formulary, or preferred drug list development or
4 management;
5 (4) negotiation or administration of rebates, discounts, payment
6 differentials or other incentives for the inclusion of particular
7 prescription drugs in a particular category or to promote the purchase
8 of particular prescription drugs;
9 (5) patient compliance, therapeutic intervention and generic substi-
10 tution programs; and
11 (6) disease management.
12 § 3302. Prescription drug restriction overrides. (a) When medications
13 for the treatment of any medical condition are restricted for use by an
14 insurer or PBM by a step therapy or fail first protocol, a prescriber
15 shall have access to a clear and convenient process at no charge to such
16 prescriber and/or patient to override such restrictions from the insurer
17 and may expeditiously override such restriction if:
18 (1) such prescriber, in his or her professional judgment, believes
19 that the preferred treatment by the insurer or the PBM has been ineffec-
20 tive in the treatment of the covered person's disease or medical condi-
21 tion; or
22 (2) based on sound clinical evidence and medical and scientific
23 evidence:
24 (A) such prescriber, in his or her professional judgment, believes
25 that the preferred treatment is expected to be ineffective based on the
26 known relevant physical or mental characteristics of the covered person
27 and known characteristics of the drug regimen, and is likely to be inef-
28 fective or adversely affect the drug's effectiveness or patient compli-
29 ance; or
30 (B) such prescriber, in his or her professional judgment, believes
31 that the preferred treatment has caused or is likely to cause an adverse
32 reaction or other harm to the covered person.
33 (b) The duration of any step therapy or fail first protocol shall not
34 be longer than either (1) the period deemed necessary by the prescribing
35 physician or health care professional to determine the treatment's clin-
36 ical effectiveness, or (2) a period of thirty days.
37 (c) Nothing in this section shall require coverage for an additional
38 condition not already covered by the policy or contract, or which is not
39 otherwise covered by law.
40 § 2. This act shall take effect on the one hundred twentieth day after
41 it shall have become a law.
