NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2834D
SPONSOR: Titone (MS)
TITLE OF BILL: An act to amend the insurance law and the public
health law, in relation to expedited utilization review of prescription
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to regulate insurance companies, health
maintenance organizations (HMOs), and utilization review agents who
impose step therapy protocols on patients and to provide for an expe-
dited appeals process for patients and their health care professionals
to override such protocols.
SUMMARY OF SPECIFIC PROVISIONS:
Sections 1 and 2 amend Section 3217-a (b)(10) and Section 4324 (b) (10)
of the Insurance Law to require health insurance companies to provide
patients and health care professionals with specific written information
on their clinical review criteria relating to a decision made to utilize
a step therapy protocol for a particular patient.
Section 3 amends Section 4900 of the Insurance Law to define key terms
such as "Step therapy protocol override determination" and "Step therapy
protocol." Step therapy protocol means a policy, protocol or program
that establishes the specific sequence in which prescription drugs for a
specified medical condition are approved for a particular patient. Step
therapy protocol override determination means a determination made by a
utilization review agent to override a step therapy protocol.
Section 4 amends Section 4902 (a) of the Insurance Law by adding a two
new subdivisions (10) and (11). Subdivision 10 requires a utilization
review agent to utilize evidenced-based and peer reviewed clinical
review criteria that is appropriate for a patient's medical condition
when establishing a step therapy protocol. Subdivision 11 requires a
utilization review agent to utilize evidence-based and peer reviewed
clinical review criteria that is appropriate to a particular patient and
such patient's medical condition when making a determination about
whether to override a step therapy protocol.
Section 5 adds three new subsections (c-1), (c-2) and (c-3) to the
Insurance Law to provide an expedited process for patients and health
care providers to override a step therapy protocol. A determination must
be made within 72 hours of the receipt of all information from the
patient and/or health care provider in emergency cases. This section
establishes standards for an override determination. Upon a determi-
nation that the step therapy protocol should be overridden, the health
plan must authorize immediate coverage for the prescription drug
prescribed by the patient's treating health care provider.
Section 6 amends Section 4903 (g) of the Insurance Law to provide that
if an insurance company or utilization review agent fails to respond
within the required timeframes, the appeal shall be deemed granted in
favor of the patient.
Sections 7, 8, 9, 10 and 11 make identical amendments as those described
above to the Public Health Law to regulate step therapy or fail first
protocols imposed by HMOs.
Section 12 is an amendment of the Unconsolidated Laws to provide that
the bill shall not be construed to prevent: a health care plan, utiliza-
tion review agent, or pharmacy benefit manager from requiring a patient
to try an AB-rated generic equivalent prior to providing coverage for
the equivalent branded prescription drug; or a health care provider from
prescribing a prescription drug that is determined to be medically
Section 13 provides for an effective date of January 1, 2017 applicable
to health insurance and health benefit plans delivered, issued for
delivery, or renewed after such date.
The Legislature makes the following findings:
(1) Health insurance plans are increasingly making use of step therapy
or "fail first" protocols under which patients are required to try one
or more prescription drugs before coverage is provided for a drug
selected by the patient's health care provider.
(2) Step therapy protocols, where they are based on well-developed
scientific standards and administered in a flexible manner that takes
into account the individual needs of patients, can play an important
role in controlling health care costs.
(3) In some cases, requiring a patient to follow a step therapy protocol
may have adverse and even dangerous consequences for the patient who may
either not realize a benefit from taking a prescription drug or may
suffer harm from taking an inappropriate drug.
(4) Without uniform policies in the State for step therapy protocols,
all patients may not receive the equivalent or most appropriate treat-
(5) It is imperative that step therapy protocols in the State preserve
the health care provider's right to make treatment decisions in the best
interests of the patient.
(6) Therefore, it is a matter of public interest to require health
insurance companies and utilization review organizations to base step
therapy protocols on appropriate clinical practice guidelines or
published peer review data developed by independent experts with know-
ledge of the condition or conditions under consideration; that patients
be exempt from step therapy protocols when inappropriate or otherwise
not in the best interest of the patients; and that patients have access
to a fair, transparent and independent process for requesting an excep-
tion to a step therapy protocol when the patients' physician deems
The following states have enacted strong laws to prohibit or limit step
therapy or fail first practices: Connecticut, Kentucky, Louisiana, Mary-
land, Mississippi, Indiana and Washington. Patients in New York current-
ly subject to step therapy or fail first practices require similar
PRIOR LEGISLATIVE HISTORY:
(2011-12) A.9397 Referred to Insurance
(2013-14) A5124 Referred to Insurance
Undetermined at this time.
The act would take effect on January 1, 2017 and apply to health insur-
ance and health benefit plans delivered, issued for delivery, or renewed
after such date.