HB1942: Health insurance; carrier business practices, prior authorization provisions.


VIRGINIA ACTS OF ASSEMBLY -- CHAPTER
An Act to amend the Code of Virginia by adding a section numbered 38.2-3407.15:2, relating to health insurance; carrier business practices; prior authorization provisions.
[H 1942]
Approved

 

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 38.2-3407.15:2 as follows:

§ 38.2-3407.15:2. Carrier contracts; required provisions regarding prior authorization.

A. As used in this section, unless the context requires a different meaning:

"Carrier" has the same meaning ascribed thereto in subsection A of § 38.2-3407.15.

"Prior authorization" means the approval process used by a carrier before certain drug benefits may be provided.

"Provider contract" has the same meaning ascribed thereto in subsection A of § 38.2-3407.15.

"Supplementation" means a request communicated by the carrier to the prescriber or his designee, for additional information, limited to items specifically requested on the applicable prior authorization request, necessary to approve or deny a prior authorization request.

B. Any provider contract between a carrier and a participating health care provider, or its contracting agent, shall contain specific provisions that:

1. Require the carrier to, in a method of its choosing, accept telephonic, facsimile, or electronic submission of prior authorization requests that are delivered from e-prescribing systems, electronic health record systems, and health information exchange platforms that utilize the National Council for Prescription Drug Programs' SCRIPT standards;

2. Require that the carrier communicate to the prescriber or his designee within 24 hours of submission of an urgent prior authorization request to the carrier, if submitted telephonically or in an alternate method directed by the carrier, that the request is approved, denied, or requires supplementation;

3. Require that the carrier communicate electronically, telephonically, or by facsimile to the prescriber or his designee, within two business days of submission of a fully completed prior authorization request, that the request is approved, denied, or requires supplementation;

4. Require that the carrier communicate electronically, telephonically, or by facsimile to the prescriber or his designee, within two business days of submission of a properly completed supplementation from the prescriber or his designee, that the request is approved or denied;

5. Require that if the prior authorization request is denied, the carrier shall communicate electronically, telephonically, or by facsimile to the prescriber or his designee, within the timeframes established by subdivision 3 or 4, as applicable, the reasons for the denial;

6. Require that prior authorization approved by another carrier be honored at least for the initial 30 days of a member's prescription drug benefit coverage, subject to the provisions of the new carrier's evidence of coverage, upon the carrier's receipt from the prescriber or his designee, of a record demonstrating the previous carrier's prior authorization approval;

7. Require that a tracking system be used by the carrier for all prior authorization requests and that the identification information be provided electronically, telephonically, or by facsimile to the prescriber or his designee, upon the carrier's response to the prior authorization request; and

8. Require that the carrier's prescription drug formularies, all drug benefits subject to prior authorization by the carrier, all of the carrier's prior authorization procedures, and all prior authorization request forms accepted by the carrier be made available through one central location on the carrier's website and that such information be updated by the carrier within seven days of approved changes.

C. The Commission shall have no jurisdiction to adjudicate individual controversies arising out of this section.

D. This section shall apply with respect to any contract between a carrier and a participating health care provider, or its contracting agent, that is entered into, amended, extended, or renewed on or after January 1, 2016.

E. Notwithstanding any law to the contrary, the provisions of this section shall not apply to:

1. Coverages issued pursuant to Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq. (Medicare), Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (Medicaid), Title XXI of the Social Security Act, 42 U.S.C. § 1397aa et seq. (CHIP), 5 U.S.C. § 8901 et seq. (federal employees), or 10 U.S.C. § 1071 et seq. (TRICARE);

2. The state employee health insurance plan established pursuant to § 2.2-2818;

3. Accident only, credit or disability insurance, long-term care insurance, TRICARE supplement, Medicare supplement, or workers' compensation coverages;

4. Any dental services plan or optometric services plan as defined in § 38.2-4501; or

5. Any health maintenance organization that (i) contracts with one multispecialty group of physicians who are employed by and are shareholders of the multispecialty group, which multispecialty group of physicians may also contract with health care providers in the community; (ii) provides and arranges for the provision of physician services by such multispecialty group physicians or by such contracted health care providers in the community; and (iii) receives and processes at least 85 percent of prescription drug prior authorization requests in a manner that is interoperable with e-prescribing systems, electronic health records, and health information exchange platforms.

2. That the Virginia Association of Health Plans, the Medical Society of Virginia, and the Virginia Academy of Family Physicians shall convene a workgroup, including appropriate provider, carrier, and pharmacy benefit manager stakeholders, to identify common evidence-based parameters for carrier approval of the 10 most frequently prescribed chronic disease management prescription drugs subject to prior authorization by a majority of carriers, the 10 most frequently prescribed mental health prescription drugs subject to prior authorization by a majority of carriers, and generic prescription drugs subject to prior authorization by a majority of carriers.  The workgroup shall report its findings to the Health Insurance Reform Commission and the Chairmen of the House and Senate Commerce and Labor Committees by July 1, 2016.


HOUSE BILL NO. 1942
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the House Committee on Commerce and Labor
on February 5, 2015)
(Patron Prior to Substitute--Delegate Habeeb)
A BILL to amend the Code of Virginia by adding a section numbered 38.2-3407.15:2, relating to health insurance; carrier business practices; prior authorization provisions.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding a section numbered 38.2-3407.15:2 as follows:

§ 38.2-3407.15:2. Carrier contracts; required provisions regarding prior authorization.

A. As used in this section, unless the context requires a different meaning:

"Carrier" has the same meaning ascribed thereto in subsection A of § 38.2-3407.15.

"Prior authorization" means the approval process used by a carrier before certain drug benefits may be provided.

"Provider contract" has the same meaning ascribed thereto in subsection A of § 38.2-3407.15.

"Supplementation" means a request communicated by the carrier to the prescriber or his designee, for additional information, limited to items specifically requested on the applicable prior authorization request, necessary to approve or deny a prior authorization request.

B. Any provider contract between a carrier and a participating health care provider, or its contracting agent, shall contain specific provisions that:

1. Require the carrier to, in a method of its choosing, accept telephonic, facsimile, or electronic submission of prior authorization requests that are delivered from e-prescribing systems, electronic health record systems, and health information exchange platforms that utilize the National Council for Prescription Drug Programs' SCRIPT standards;

2. Require that the carrier communicate to the prescriber or his designee within 24 hours of submission of an urgent prior authorization request to the carrier, if submitted telephonically or in an alternate method directed by the carrier, that the request is approved, denied, or requires supplementation;

3. Require that the carrier communicate electronically, telephonically, or by facsimile to the prescriber or his designee, within two business days of submission of a fully completed prior authorization request, that the request is approved, denied, or requires supplementation;

4. Require that the carrier communicate electronically, telephonically, or by facsimile to the prescriber or his designee, within two business days of submission of a properly completed supplementation from the prescriber or his designee, that the request is approved or denied;

5. Require that if the prior authorization request is denied, the carrier shall communicate electronically, telephonically, or by facsimile to the prescriber or his designee, within the timeframes established by subdivision 3 or 4, as applicable, the reasons for the denial;

6. Require that prior authorization approved by another carrier be honored at least for the initial 30 days of a member's prescription drug benefit coverage, subject to the provisions of the new carrier's evidence of coverage, upon the carrier's receipt from the prescriber or his designee, of a record demonstrating the previous carrier's prior authorization approval;

7. Require that a tracking system be used by the carrier for all prior authorization requests and that the identification information be provided electronically, telephonically, or by facsimile to the prescriber or his designee, upon the carrier's response to the prior authorization request; and

8. Require that the carrier's prescription drug formularies, all drug benefits subject to prior authorization by the carrier, all of the carrier's prior authorization procedures, and all prior authorization request forms accepted by the carrier be made available through one central location on the carrier's website and that such information be updated by the carrier within seven days of approved changes.

C. The Commission shall have no jurisdiction to adjudicate individual controversies arising out of this section.

D. This section shall apply with respect to any contract between a carrier and a participating health care provider, or its contracting agent, that is entered into, amended, extended, or renewed on or after January 1, 2016.

E. Notwithstanding any law to the contrary, the provisions of this section shall not apply to:

1. Coverages issued pursuant to Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq. (Medicare), Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (Medicaid), Title XXI of the Social Security Act, 42 U.S.C. § 1397aa et seq. (CHIP), 5 U.S.C. § 8901 et seq. (federal employees), or 10 U.S.C. § 1071 et seq. (TRICARE);

2. The state employee health insurance plan established pursuant to § 2.2-2818;

3. Accident only, credit or disability insurance, long-term care insurance, TRICARE supplement, Medicare supplement, or workers' compensation coverages;

4. Any dental services plan or optometric services plan as defined in § 38.2-4501; or

5. Any health maintenance organization that (i) contracts with one multispecialty group of physicians who are employed by and are shareholders of the multispecialty group, which multispecialty group of physicians may also contract with health care providers in the community; (ii) provides and arranges for the provision of physician services by such multispecialty group physicians or by such contracted health care providers in the community; and (iii) receives and processes at least 85 percent of prescription drug prior authorization requests in a manner that is interoperable with e-prescribing systems, electronic health records, and health information exchange platforms.

2. That the Virginia Association of Health Plans, the Medical Society of Virginia, and the Virginia Academy of Family Physicians shall convene a workgroup, including appropriate provider, carrier, and pharmacy benefit manager stakeholders, to identify common evidence-based parameters for carrier approval of the 10 most frequently prescribed chronic disease management prescription drugs subject to prior authorization by a majority of carriers, the 10 most frequently prescribed mental health prescription drugs subject to prior authorization by a majority of carriers, and generic prescription drugs subject to prior authorization by a majority of carriers.  The workgroup shall report its findings to the Health Insurance Reform Commission and the Chairmen of the House and Senate Commerce and Labor Committees by July 1, 2016.

HOUSE BILL NO. 1942

Offered January 14, 2015
Prefiled January 13, 2015
A BILL to amend and reenact § 38.2-4509 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 38.2-3407.15:2, relating to health insurance; carrier business practices; prior authorization provisions.
Patron-- Habeeb

Committee Referral Pending

Be it enacted by the General Assembly of Virginia:

1. That § 38.2-4509 of the Code of Virginia is amended and reenacted and that the Code of Virginia is amended by adding a section numbered 38.2-3407.15:2 as follows:

§ 38.2-3407.15:2. Carrier contracts; required provisions regarding prior authorization.

A. As used in this section, unless the context requires a different meaning:

"Carrier" has the same meaning ascribed thereto in subsection A of § 38.2-3407.15.

"Chronic disease management drug" means any drug used to treat an insured's chronic, incurable, permanent, or recurring medical condition.

"Mental health drug" means any drug prescribed to treat an insured's mental disorder, including psychological, behavioral, or emotional disorders.

"Prior authorization" means the approval process used by a carrier before certain drug benefits may be provided.

"Provider contract" has the same meaning ascribed thereto in subsection A of § 38.2-3407.15.

"Step therapy restrictions" means a restriction by a carrier requiring the use of additional steps, such as attempting other drug options, prior to approval of a drug benefit subject to prior authorization.

"Supplementation" means an electronic request communicated by the carrier or its intermediary to the provider for additional information, limited to items identified on the applicable prior authorization request form, necessary to approve or deny a prior authorization request.

"Universal prior authorization form" means a form made available by the Commission for use in prior authorization.

B. Any provider contract between a carrier and a participating health care provider, or its contracting agent, pursuant to which the carrier has the right or obligation to require prior authorization for a drug benefit, shall contain specific provisions that:

1. Accept universal prior authorization forms;

2. Permit the electronic submission of prior authorization requests using methods and systems that are interoperable with e-prescribing systems, electronic health records, and health information exchange platforms. Permitted electronic submission formats shall conform to the National Council for Prescription Drug Programs (NCPDP) SCRIPT standards;

3. Require prior authorization for chronic disease management drug benefits only when a patient (i) is not medically stable on the prescribed drug or (ii) has not completed prior step therapy restrictions, if required, for the prescribed drug;

4. Require prior authorization for mental health drug benefits only when a patient (i) is not medically stable on the prescribed drug or (ii) has not completed prior step therapy, if required, for the prescribed drug;

5. Require that prior authorization approved by another carrier be honored for the initial 90 days of an insured's prescription drug benefit coverage upon the carrier's receipt from the prescriber of a record demonstrating the previous carrier's prior authorization approval;

6. Require that prior authorization requests be deemed to be approved unless the carrier has communicated electronically to the prescriber within 48 hours of receipt of the request that it is denied or requires supplementation;

7. Require that prior authorization requests be deemed to be approved unless the carrier has communicated electronically to the prescriber within 24 hours of receipt of supplementation by the prescriber, or his agent, that it is denied;

8. Require that, if a prior authorization request is approved by the carrier, the prior authorization approval be valid for not less than one year;

9. Require that if the prior authorization request is denied, the carrier shall communicate the reasons for the denial electronically to the prescriber within the periods set forth in subdivisions 6 and 7;

10. Require that prior authorization of a three-day supply of a prescribed drug be deemed to be approved where delay in filling the prescribed drug could reasonably be expected by a prudent layperson who possesses an average knowledge of health and medicine to result in (i) serious jeopardy to the mental, behavioral, emotional, or physical health of the insured; (ii) danger of serious impairment of the insured's bodily functions; (iii) serious dysfunction of any of the insured's bodily organs; or (iv) in the case of a pregnant insured, serious jeopardy to the health of the fetus;

11. Require prior authorization for generic drug benefits only when (i) the prescribed drug is an opioid or (ii) when the carrier's cost of reimbursement for the generic drug benefit exceeds its cost of reimbursement for the brand name drug;

12. Require that a tracking number be assigned by the carrier to all prior authorization requests and that the tracking number be provided electronically to the prescriber upon the carrier's receipt of the prior authorization request; and

13. Require that the carrier's prescription drug formularies, all drug benefits subject to prior authorization by the carrier, all of the carrier's prior authorization procedures, and all prior authorization request forms accepted by the carrier be centrally located on the carrier's website and that such postings be updated by the carrier within seven days of approved changes.

C. The provisions of this section are inapplicable where the carrier has evidence of fraud, waste, or abuse by the insured or the prescriber and the carrier has notified the prescriber that the provisions of this section are accordingly inapplicable.

D. The Commission shall have no jurisdiction to adjudicate individual controversies arising out of this section.

E. This section shall apply with respect to any contract between a carrier and a participating health care provider, or its contracting agent, pursuant to which the carrier has the right or obligation to require prior authorization for a drug benefit, that is entered into, amended, extended, or renewed on or after January 1, 2016.

F. Notwithstanding any law to the contrary, the provisions of this section shall not apply to (i) coverages issued pursuant to Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq. (Medicare), Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (Medicaid), Title XXI of the Social Security Act, 42 U.S.C. § 1397aa et seq. (CHIP), 5 U.S.C. § 8901 et seq. (federal employees), or 10 U.S.C. § 1071 et seq. (TRICARE); (ii) the State Employee Health Insurance Program; or (iii) accident only, credit or disability insurance, long-term care insurance, TRICARE supplement, Medicare supplement, or workers' compensation coverages.

§ 38.2-4509. Application of certain laws.

A. No provision of this title except this chapter and, insofar as they are not inconsistent with this chapter, §§ 38.2-200, 38.2-203, 38.2-209 through 38.2-213, 38.2-218 through 38.2-225, 38.2-229, 38.2-316, 38.2-326, 38.2-400, 38.2-402 through 38.2-413, 38.2-500 through 38.2-515, 38.2-600 through 38.2-620, 38.2-900 through 38.2-904, 38.2-1038, 38.2-1040 through 38.2-1044, Articles 1 (§ 38.2-1300 et seq.) and 2 (§ 38.2-1306.2 et seq.) of Chapter 13, §§ 38.2-1312, 38.2-1314, 38.2-1315.1, Articles 4 (§ 38.2-1317 et seq.), 5 (§ 38.2-1322 et seq.), and 6 (§ 38.2-1335 et seq.) of Chapter 13, §§ 38.2-1400 through 38.2-1444, 38.2-1800 through 38.2-1836, 38.2-3401, 38.2-3404, 38.2-3405, 38.2-3407.1, 38.2-3407.4, 38.2-3407.10, 38.2-3407.13, 38.2-3407.14, 38.2-3407.15, 38.2-3407.15:2, 38.2-3407.17, 38.2-3415, 38.2-3541, Article 5 (§ 38.2-3551 et seq.) of Chapter 35, §§ 38.2-3600 through 38.2-3603, Chapter 55 (§ 38.2-5500 et seq.), and Chapter 58 (§ 38.2-5800 et seq.) shall apply to the operation of a plan.

B. The provisions of subsection A of § 38.2-322 shall apply to an optometric services plan. The provisions of subsection C of § 38.2-322 shall apply to a dental services plan.

C. The provisions of Article 1.2 (§ 32.1-137.7 et seq.) of Chapter 5 of Title 32.1 shall not apply to either an optometric or dental services plan.

D. The provisions of § 38.2-3407.1 shall apply to claim payments made on or after January 1, 2014. No optometric or dental services plan shall be required to pay interest computed under § 38.2-3407.1 if the total interest is less than $5.

2. That on or before December 1, 2015, and annually thereafter, the Virginia Academy of Family Physicians, the Medical Society of Virginia, the American Academy of Pediatrics – Virginia Chapter, the American College of Physicians – Virginia Chapter, the Psychiatric Society of Virginia, the Virginia Pharmacists Association, the Virginia Association of Health Plans, and other appropriate health care provider and carrier stakeholders shall develop, and annually update, universal prior authorization forms. Such forms shall be provided to the State Corporation Commission (Commission) in both electronic and nonelectronic formats, shall be disease state specific, shall contain a check box for the provider to enter patient specific information, and shall enable the prescriber to submit a renewal request by marking the form to indicate there has been no change in the patient's condition since the last prior authorization request. The Commission shall make the universal prior authorization forms available, in both electronic and nonelectronic formats, on or before January 1, 2016, and shall make revised universal prior authorization forms available annually thereafter.