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.
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.
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.
