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A09588 Summary:

BILL NOA09588
 
SAME ASSAME AS S07872
 
SPONSORGottfried
 
COSPNSRWoerner, McDonald, Taylor, Santabarbara, Lifton, Solages, Crouch, Barron, Sepulveda, Colton, Buchwald, D'Urso, Lupardo, Montesano, Mosley, Englebright
 
MLTSPNSR
 
Amd §§4902 & 4903, add §4909, Pub Health L; amd §§4902, 4903 & 3238, add §4909, Ins L
 
Relates to utilization review program standards; requires use of evidence-based and peer reviewed clinical review criteria; amends provisions relating to prescription drug formulary changes and pre-authorization for certain health care services.
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A09588 Actions:

BILL NOA09588
 
01/24/2018referred to insurance
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A09588 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A9588
 
SPONSOR: Gottfried
  TITLE OF BILL: An act to amend the public health law and the insur- ance law, in relation to utilization review program standards and prescription drug formulary changes during a contract year, and in relation to pre-authorization of health care services   PURPOSE OR GENERAL IDEA OF BILL: The purpose of this legislation is to reduce administrative requirements of health care practitioners which interfere with efforts to assure patients receive appropriate care.   SUMMARY OF PROVISIONS: Section 1 amends paragraph (c) of subdivision 1 of section 4902 of the public health law to add "such clinical review criteria shall utilize recognized evidence-based and peer reviewed clinical review criteria that takes into account the needs of atypical patient populations and diagnoses." Section 2 amends paragraph (a) of subdivision 2 of section 4903 of the public health law by changing from three business days to "forty-eight hours" the amount of time a utilization review agent shall make and communicate a determination and adds "or within twenty-four hours of the receipt of necessary information if the request is for an enrollee with a medical condition that places the health of the insured in serious jeopardy without the health care services recommended by the enrollee's health care professional." Section 3 amends the public health law by adding a new section 4909 related to prescription drug formulary changes. Section 4 amends subdivision (a) of section 4902 of the insurance law by adding "such clinical review criteria shall utilize recognized evidence-based and peer-reviewed clinical review criteria that takes into account the needs of a typical patient populations and diagnoses." Section 5 amends paragraph 1 of subdivision (b) of section 4903 of the insurance law by changing from three business days to "forty-eight hours" the amount of time a utilization review agent shall make and communicate a determination and adds "or within twenty-four hours of the receipt of necessary information if the request is for an enrollee with a medical condition that places the health of the insured in serious jeopardy without the health care services recommended by the enrollee's health care professional." This section also adds "An approval of request for pre-authorization shall be valid for the duration of the prescription or treatment requested for pre-authorization." Section 6 amends the insurance law by adding a new section 4909 related to prescription drug formulary changes. Section 7 amends subdivision (a) of section 3238 of the insurance law by adding "and eligibility confirmed on the day of the service." Section 8 states the act shall take effect on the ninetieth day after it shall have become a law.   JUSTIFICATION: Several studies have highlighted the inordinate amount of time spent away from delivering patient care to obtain prior authorization. For example, a 2016 Annals of Internal Medicine study concluded that, for every hour a physician spends on delivering care to a patient, two more are spent on administrative tasks. The legislation would enact a number of common sense reforms proposed in a recently released document entitled Prior Authorization and Utiliza- tion Management Reform Principles (https://www.ama- assn.org/sites/default/ files/mediabrowser/principles-with- signatory- page-for-slsc.pdf). These principles were developed by the American Medical Association, the American Academy of Family Physicians, the American Hospital Association, Medical Group Management Association, American Pharmacists Association, and Arthritis Foundation along with other health and patient advocacy associations.As noted in the introduc- tory comments to the principles, utilization management programs such as prior authorization can create significant barriers for patients by delaying the start or continuation of necessary treatment and negatively affecting patient health outcomes. The time-consuming processes used in these programs burden providers and divert valuable resources away from direct patient care. While some of these prior authorization principles articulated in the AMA/AHA et. al. document have already been enacted in New York, many others have not. This legislation would enact several of these princi- ples into law, such as assuring that utilization review criteria are evidence-based, prohibiting midyear formulary changes, and assuring that once a prior authorization is received it will not need to be repeated. This legislation would reduce the administrative barriers that sometimes unnecessarily delay and interfere with patients receiving needed care and medications recommended by their treating health care provider.   PRIOR LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: 90 days after it shall have become a law.
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A09588 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9588
 
                   IN ASSEMBLY
 
                                    January 24, 2018
                                       ___________
 
        Introduced  by  M.  of  A.  GOTTFRIED  --  read once and referred to the
          Committee on Insurance
 
        AN ACT to amend the public health law and the insurance law, in relation
          to utilization review program standards and prescription  drug  formu-
          lary changes during a contract year, and in relation to pre-authoriza-
          tion of health care services

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1.  Paragraph (c) of subdivision 1  of  section  4902  of  the
     2  public  health  law,  as  added  by  chapter 705 of the laws of 1996, is
     3  amended to read as follows:
     4    (c) Utilization of written clinical review criteria developed pursuant
     5  to a utilization  review  plan.  Such  clinical  review  criteria  shall
     6  utilize  recognized  evidence-based  and  peer  reviewed clinical review
     7  criteria that takes into account the needs  of  atypical  patient  popu-
     8  lations and diagnoses;
     9    §  2.  Paragraph  (a)  of  subdivision 2 of section 4903 of the public
    10  health law, as amended by chapter 371 of the laws of 2015, is amended to
    11  read as follows:
    12    (a) A utilization review agent shall make a utilization review  deter-
    13  mination  involving health care services which require pre-authorization
    14  and provide notice of a determination  to  the  enrollee  or  enrollee's
    15  designee  and  the  enrollee's  health care provider by telephone and in
    16  writing within [three business days] forty-eight hours of receipt of the
    17  necessary information, or within twenty-four hours  of  the  receipt  of
    18  necessary  information  if the request is for an enrollee with a medical
    19  condition that places the health of  the  insured  in  serious  jeopardy
    20  without  the  health  care services recommended by the enrollee's health
    21  care professional. To the extent practicable, such written  notification
    22  to  the  enrollee's  health care provider shall be transmitted electron-
    23  ically, in a manner and in a form agreed  upon  by  the  parties.    The
    24  notification  shall  identify;  (i)  whether the services are considered
    25  in-network or out-of-network; (ii) and whether the enrollee will be held
    26  harmless for the services and not be responsible for any payment,  other
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11465-05-8

        A. 9588                             2
 
     1  than any applicable co-payment or co-insurance; (iii) as applicable, the
     2  dollar  amount  the  health care plan will pay if the service is out-of-
     3  network; and (iv) as applicable, information explaining how an  enrollee
     4  may  determine  the  anticipated  out-of-pocket  cost for out-of-network
     5  health care services in a geographical area or zip code based  upon  the
     6  difference  between what the health care plan will reimburse for out-of-
     7  network health care services and the usual and customary cost  for  out-
     8  of-network  health  care services. An approval for a request for pre-au-
     9  thorization shall be valid for  the  duration  of  the  prescription  or
    10  treatment as requested by the enrollee's health care provider.
    11    §  3. The public health law is amended by adding a new section 4909 to
    12  read as follows:
    13    § 4909. Prescription drug formulary changes. 1.  A  health  care  plan
    14  required  to  provide  essential  health  benefits  shall not, except as
    15  otherwise  provided  in  subdivision  two  of  this  section,  remove  a
    16  prescription drug from a formulary:
    17    (a)  if the formulary includes two or more tiers of benefits providing
    18  for different deductibles, copayments or coinsurance applicable  to  the
    19  prescription  drugs  in  each  tier, move a drug to a tier with a larger
    20  deductible, copayment or coinsurance, or
    21    (b) add utilization  management  restrictions  to  a  formulary  drug,
    22  unless  such  changes  occur  at  the  time of enrollment or issuance of
    23  coverage.  Such prohibition shall apply beginning on the date  on  which
    24  open  enrollment  begins for a plan year and through the end of the plan
    25  year to which such open enrollment period applies.
    26    2. (a) A health care plan with a formulary that includes two  or  more
    27  tiers  of  benefits  providing  for different deductibles, copayments or
    28  coinsurance applicable to prescription drugs in each  tier  may  move  a
    29  prescription  drug to a tier with a larger deducible, copayment or coin-
    30  surance if an AB-rated generic drug for such prescription drug is  added
    31  to the formulary at the same time.
    32    (b) A health care plan may remove a prescription drug from a formulary
    33  if  the  federal  food and drug administration determines that such drug
    34  should be removed from the market.
    35    § 4. Paragraph 3 of subsection (a) of section 4902  of  the  insurance
    36  law,  as added by chapter 705 of the laws of 1996, is amended to read as
    37  follows:
    38    (3) Utilization of written clinical review criteria developed pursuant
    39  to a utilization  review  plan.  Such  clinical  review  criteria  shall
    40  utilize  recognized  evidence-based  and  peer  reviewed clinical review
    41  criteria that takes into account the needs  of  atypical  patient  popu-
    42  lations and diagnoses;
    43    §  5.  Paragraph  1 of subsection (b) of section 4903 of the insurance
    44  law, as amended by chapter 371 of the laws of 2015, is amended  to  read
    45  as follows:
    46    (1)  A utilization review agent shall make a utilization review deter-
    47  mination involving health care services which require  pre-authorization
    48  and provide notice of a determination to the insured or insured's desig-
    49  nee  and  the insured's health care provider by telephone and in writing
    50  within [three business days] forty-eight hours of receipt of the  neces-
    51  sary  information,  or within twenty-four hours of the receipt of neces-
    52  sary information if the request is for an insured with a medical  condi-
    53  tion  that  places the health of the insured in serious jeopardy without
    54  the health care  services  recommended  by  the  insured's  health  care
    55  provider.    To the extent practicable, such written notification to the
    56  enrollee's health care provider shall be transmitted electronically,  in

        A. 9588                             3
 
     1  a  manner  and  in  a form agreed upon by the parties.  The notification
     2  shall identify: (i) whether the services are  considered  in-network  or
     3  out-of-network;  (ii)  whether the insured will be held harmless for the
     4  services and not be responsible for any payment, other than any applica-
     5  ble  co-payment,  co-insurance  or  deductible; (iii) as applicable, the
     6  dollar amount the health care plan will pay if the  service  is  out-of-
     7  network;  and  (iv) as applicable, information explaining how an insured
     8  may determine the  anticipated  out-of-pocket  cost  for  out-of-network
     9  health  care  services in a geographical area or zip code based upon the
    10  difference between what the health care plan will reimburse for  out-of-
    11  network  health  care services and the usual and customary cost for out-
    12  of-network health care services.  An approval of request for pre-author-
    13  ization shall be valid for the duration of the prescription or treatment
    14  requested for pre-authorization.
    15    § 6. The insurance law is amended by adding a new section 4909 to read
    16  as follows:
    17    § 4909. Prescription drug formulary changes. (a) A  health  care  plan
    18  required  to  provide  essential  health  benefits  shall not, except as
    19  otherwise  provided  in  subsection  (b)  of  this  section,  remove   a
    20  prescription drug from a formulary:
    21    (i)  if the formulary includes two or more tiers of benefits providing
    22  for different deductibles, copayments or coinsurance applicable  to  the
    23  prescription  drugs  in  each  tier, move a drug to a tier with a larger
    24  deductible, copayment or coinsurance, or
    25    (ii) add utilization management  restrictions  to  a  formulary  drug,
    26  unless  such  changes  occur  at  the  time of enrollment or issuance of
    27  coverage.  Such prohibition shall apply beginning on the date  on  which
    28  open  enrollment  begins for a plan year and through the end of the plan
    29  year to which such open enrollment period applies.
    30    (b) (i) A health care plan with a formulary that includes two or  more
    31  tiers  of  benefits  providing  for different deductibles, copayments or
    32  coinsurance applicable to prescription drugs in each  tier  may  move  a
    33  prescription  drug to a tier with a larger deducible, copayment or coin-
    34  surance if an AB-rated generic drug for such prescription drug is  added
    35  to the formulary at the same time.
    36    (ii)  A  health care plan may remove a prescription drug from a formu-
    37  lary if the federal food and drug administration  determines  that  such
    38  drug should be removed from the market.
    39    §  7. Subsection (a) of section 3238 of the insurance law, as added by
    40  chapter 451 of the laws of 2007, is amended to read as follows:
    41    (a) An insurer, corporation organized pursuant to article  forty-three
    42  of  this  chapter,  municipal cooperative health benefits plan certified
    43  pursuant to article forty-seven of this chapter, or  health  maintenance
    44  organization  and  other  organizations  certified  pursuant  to article
    45  forty-four of the public health law ("health plan") shall pay claims for
    46  a health care service for which a pre-authorization was required by, and
    47  received from, the health plan prior to the  rendering  of  such  health
    48  care  service,  and  eligibility  confirmed  on  the day of the service,
    49  unless:
    50    (1) [(i) the insured, subscriber, or enrollee was not a covered person
    51  at the time the health care service was rendered.
    52    (ii) Notwithstanding the provisions of subparagraph (i) of this  para-
    53  graph,  a  health  plan  shall  not  deny  a  claim on this basis if the
    54  insured's, subscriber's or enrollee's coverage was retroactively  termi-
    55  nated  more  than  one  hundred twenty days after the date of the health
    56  care service, provided that the claim is submitted  within  ninety  days

        A. 9588                             4

     1  after  the  date  of  the health care service. If the claim is submitted
     2  more than ninety days after the date of the  health  care  service,  the
     3  health  plan  shall have thirty days after the claim is received to deny
     4  the  claim on the basis that the insured, subscriber or enrollee was not
     5  a covered person on the date of the health care service.
     6    (2)] the submission of the claim with respect to an insured, subscrib-
     7  er or enrollee was not timely under the terms of the applicable provider
     8  contract, if the claim is submitted by a  provider,  or  the  policy  or
     9  contract, if the claim is submitted by the insured, subscriber or enrol-
    10  lee;
    11    [(3)]  (2)  at the time the pre-authorization was issued, the insured,
    12  subscriber or enrollee had not  exhausted  contract  or  policy  benefit
    13  limitations  based  on  information available to the health plan at such
    14  time, but subsequently exhausted contract or policy benefit  limitations
    15  after  authorization was issued; provided, however, that the health plan
    16  shall include in  the  notice  of  determination  required  pursuant  to
    17  subsection (b) of section four thousand nine hundred three of this chap-
    18  ter  and  subdivision  two  of  section  forty-nine hundred three of the
    19  public health law that the visits authorized might exceed the limits  of
    20  the  contract  or  policy and accordingly would not be covered under the
    21  contract or policy;
    22    [(4)] (3) the pre-authorization was based on materially inaccurate  or
    23  incomplete  information provided by the insured, subscriber or enrollee,
    24  the designee of the insured, subscriber or enrollee, or the health  care
    25  provider  such  that  if  the  correct  or complete information had been
    26  provided, such pre-authorization would not have been granted; or
    27    [(5) the pre-authorized service was related to a  pre-existing  condi-
    28  tion that was excluded from coverage; or
    29    (6)] (4) there is a reasonable basis supported by specific information
    30  available  for review by the superintendent that the insured, subscriber
    31  or enrollee, the designee of the insured, subscriber or enrollee, or the
    32  health care provider has engaged in fraud or abuse.
    33    § 8. This act shall take effect on the ninetieth day  after  it  shall
    34  have become a law.
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