A09397 Summary:

BILL NO    A09397 

SAME AS    SAME AS S06464

SPONSOR    Titone

COSPNSR    Rivera P, Quart, Jaffee, Abinanti, Gibson, Scarborough, Crespo,
           Brook-Krasny, Englebright, Cook, Robinson, Weprin, Hooper, Rosenthal,
           Schimel, Brindisi

MLTSPNSR   Barron, Calhoun, Finch, Lupardo, McDonough, Meng, Miller J,
           Montesano, Raia, Sayward

Add Art 33 SS3301 & 3302, Ins L

Regulates step therapy and first fail health insurance policies and contracts.
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A09397 Actions:

BILL NO    A09397 

02/24/2012 referred to insurance
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A09397 Votes:

There are no votes for this bill in this legislative session.
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A09397 Memo:

BILL NUMBER:A9397

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 treatment'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: New Bill

FISCAL IMPLICATIONS: Undetermined at this time.

EFFECTIVE DATE:   This act shall take effect  on  the  120th  day  after
becoming law.
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A09397 Text:

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

                                         9397

                                 I N  A S S E M B L Y

                                   February 24, 2012
                                      ___________

       Introduced by M. of A. TITONE -- read once and referred 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:

    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    S 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, INCLUDING MANAGED CARE PROVIDERS AS DEFINED IN SECTION THREE
   14  HUNDRED SIXTY-FOUR-J OF THE SOCIAL SERVICES LAW;
   15    (B) "PHARMACY BENEFIT MANAGEMENT" OR  "PBM"  SHALL  MEAN  THE  SERVICE
   16  PROVIDED  TO  AN  INSURER, DIRECTLY OR THROUGH ANOTHER ENTITY; INCLUDING
   17  THE PROCUREMENT  OF  PRESCRIPTION  DRUGS  TO  BE  DISPENSED  TO  COVERED
   18  PERSONS,  OR THE ADMINISTRATION OR MANAGEMENT OF PRESCRIPTION DRUG BENE-
   19  FITS INCLUDING, BUT NOT LIMITED TO, ANY OF THE FOLLOWING:
   20    (1) A MAIL ORDER PHARMACY;
   21    (2) CLAIMS PROCESSING, RETAIL NETWORK MANAGEMENT AND PAYMENT OF CLAIMS
   22  TO PHARMACIES FOR DISPENSING PRESCRIPTION DRUGS;
   23    (3) CLINICAL OR OTHER FORMULARY, OR PREFERRED DRUG LIST DEVELOPMENT OR
   24  MANAGEMENT;
   25    (4) NEGOTIATION  OR  ADMINISTRATION  OF  REBATES,  DISCOUNTS,  PAYMENT
   26  DIFFERENTIALS  OR  OTHER  INCENTIVES  FOR  THE  INCLUSION  OF PARTICULAR
   27  PRESCRIPTION DRUGS IN A PARTICULAR CATEGORY OR TO PROMOTE  THE  PURCHASE
   28  OF PARTICULAR PRESCRIPTION DRUGS;

        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD06098-04-2
       A. 9397                             2

    1    (5)  PATIENT  COMPLIANCE, THERAPEUTIC INTERVENTION AND GENERIC SUBSTI-
    2  TUTION PROGRAMS; AND
    3    (6) DISEASE MANAGEMENT.
    4    S  3302. PRESCRIPTION DRUG RESTRICTION OVERRIDES. (A) WHEN MEDICATIONS
    5  FOR THE TREATMENT OF ANY MEDICAL CONDITION ARE RESTRICTED FOR USE BY  AN
    6  INSURER  OR  PBM  BY A STEP THERAPY OR FAIL FIRST PROTOCOL, A PRESCRIBER
    7  SHALL HAVE ACCESS TO A CLEAR AND CONVENIENT  PROCESS  TO  OVERRIDE  SUCH
    8  RESTRICTIONS  FROM  THE  INSURER  AND  MAY  EXPEDITIOUSLY  OVERRIDE SUCH
    9  RESTRICTION IF:
   10    (1) SUCH PRESCRIBER, IN HIS OR  HER  PROFESSIONAL  JUDGMENT,  BELIEVES
   11  THAT THE PREFERRED TREATMENT BY THE INSURER OR THE PBM HAS BEEN INEFFEC-
   12  TIVE  IN THE TREATMENT OF THE COVERED PERSON'S DISEASE OR MEDICAL CONDI-
   13  TION; OR
   14    (2) BASED ON  SOUND  CLINICAL  EVIDENCE  AND  MEDICAL  AND  SCIENTIFIC
   15  EVIDENCE:
   16    (A)  SUCH  PRESCRIBER,  IN  HIS OR HER PROFESSIONAL JUDGMENT, BELIEVES
   17  THAT THE PREFERRED TREATMENT IS EXPECTED TO BE INEFFECTIVE BASED ON  THE
   18  KNOWN  RELEVANT PHYSICAL OR MENTAL CHARACTERISTICS OF THE COVERED PERSON
   19  AND KNOWN CHARACTERISTICS OF THE DRUG REGIMEN, AND IS LIKELY TO BE INEF-
   20  FECTIVE OR ADVERSELY AFFECT THE DRUG'S EFFECTIVENESS OR PATIENT  COMPLI-
   21  ANCE; OR
   22    (B)  SUCH  PRESCRIBER,  IN  HIS OR HER PROFESSIONAL JUDGMENT, BELIEVES
   23  THAT THE PREFERRED TREATMENT HAS CAUSED OR IS LIKELY TO CAUSE AN ADVERSE
   24  REACTION OR OTHER HARM TO THE COVERED PERSON.
   25    (B) THE DURATION OF ANY STEP THERAPY OR FAIL FIRST PROTOCOL SHALL  NOT
   26  BE LONGER THAN EITHER (1) THE PERIOD DEEMED NECESSARY BY THE PRESCRIBING
   27  PHYSICIAN OR HEALTH CARE PROFESSIONAL TO DETERMINE THE TREATMENT'S CLIN-
   28  ICAL EFFECTIVENESS, OR (2) A PERIOD OF THIRTY DAYS.
   29    (C) FOR MEDICATIONS WITH NO GENERIC EQUIVALENT AND FOR WHICH THE PRES-
   30  CRIBER  IN  HIS  OR  HER  CLINICAL JUDGMENT BELIEVES THAT NO APPROPRIATE
   31  THERAPEUTIC ALTERNATIVE IS AVAILABLE, AN INSURER OR  PBM  SHALL  PROVIDE
   32  ACCESS TO UNITED STATES FOOD AND DRUG ADMINISTRATION (FDA) LABELED MEDI-
   33  CATIONS  WITHOUT  RESTRICTION TO TREAT SUCH MEDICAL CONDITIONS FOR WHICH
   34  AN FDA LABELED MEDICATION IS AVAILABLE.
   35    (D) NOTHING IN THIS SECTION SHALL REQUIRE COVERAGE FOR  AN  ADDITIONAL
   36  CONDITION NOT ALREADY COVERED BY THE POLICY OR CONTRACT, OR WHICH IS NOT
   37  OTHERWISE COVERED BY LAW.
   38    S 2. This act shall take effect on the one hundred twentieth day after
   39  it shall have become a law.
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