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A02317 Summary:

BILL NOA02317C
 
SAME ASSAME AS S05022-C
 
SPONSORPeoples-Stokes
 
COSPNSRSkoufis, Barrett, Niou, Ortiz, Sepulveda, Galef, Abinanti, Lavine, Colton, Jean-Pierre, Taylor, Byrne, Weprin, Seawright, Barron, Mosley, Lupardo
 
MLTSPNSREnglebright, Hevesi, Ra, Thiele
 
Add 4909, Ins L; add 4909, Pub Health L
 
Prohibits a health care plan from making prescription drug formulary changes during a contract year.
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A02317 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2317C
 
SPONSOR: Peoples-Stokes
  TITLE OF BILL: An act to amend the insurance law and the public health law, in relation to prescription drug formulary changes during a contract year   PURPOSE OR GENERAL IDEA OF BILL: To clarify that health insurance consumers covered by plans that are required to offer essential health benefits under the affordable care act are protected from adverse effects of mid-year formulary changes, and properly notified of formulary changes.   SUMMARY OF PROVISIONS: Section 1 adds a new section 4909 to the Insurance Law to state that a health care plan which provides essential health benefits under the federal affordable care act may not remove a prescription drug from a formulary during the enrollment year. If the plan's drug formulary has two or more tiers of drug benefits with different deductibles, copay- ments or coinsurance, the plan may not move a drug to a tier with higher patient cost sharing during the enrollment year. The plan may also not add new or additional formulary restrictions during the enrollment year. A health care plan may move a prescription drug to a tier with a larger copayment, coinsurance and different deductible if an AB-rated generic equivalent drug or interchangeable biological product is added to the formulary at the same time. In addition, provide notice to policyholders of the intent to remove a prescription drugs from a formulary or alter deductible, copayment or coinsurance requirements in the upcoming plan year, thirty days prior to the open enrollment period for the consec- utive plan year. Section 2 adds a new section 4909 to the public health law to also state that a health care plan which provides essential health benefits under the federal affordable care act may not remove a prescription drug from a formulary during the enrollment year. If the plan's drug formulary has two or more tiers of drug benefits with different deductibles, copay- ments or coinsurance, the plan may not move a drug to a tier with higher patient cost sharing during the enrollment year. The plan may also not add new or additional formulary restrictions during the enrollment year. A health care plan may move a prescription drug to a tier with a larger copayment, coinsurance and different deductible if an AB-rated generic equivalent drug or interchangeable biological product is added to the formulary at the same time. In addition, provide notice to policyholders of the intent to remove a prescription drugs from a formulary or alter deductible, copayment or coinsurance requirements in the upcoming plan year, thirty days prior to the open enrollment period for the consec- utive plan year. Section 3 provides that this act would take effect on the 60th day after enactment, provided that effective immediately the superintendent of insurance may make regulations and take other actions necessary to implement the act.   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE): The amended version adds "interchangeable biological product" to the new provisions of the insurance law and public health law.   JUSTIFICATION: This bill ensures that enrollees who select a health exchange plan based on their individual prescription drug needs have assurance that the health plan will maintain continuity in coverage for those prescription drugs during the course of the enrollment year, and be provided adequate notice of the intent to remove a prescription on the upcoming plan year. Enrollees choose health exchange plans based on the formulary status of a necessary therapy. A change in prescription drug availability could result in serious medical problems for the enrollee. Also, these unex- pected formulary changes can be extremely financially burdensome and have negative health outcomes.   PRIOR LEGISLATIVE HISTORY: A.7707A of 2015/2016   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: This act shall take effect on the sixtieth day after it shall have become a law; provided, however, that effective immediately, the addi- tion, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed by the superintendent of financial services on or before such date.
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A02317 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2317--C
                                                                Cal. No. 171
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 17, 2017
                                       ___________
 
        Introduced  by  M.  of A. PEOPLES-STOKES, SKOUFIS, BARRETT, NIOU, ORTIZ,
          SEPULVEDA,  GALEF,  ABINANTI,  LAVINE,  COLTON,  JEAN-PIERRE,  TAYLOR,
          BYRNE,  WEPRIN  -- Multi-Sponsored by -- M. of A. ENGLEBRIGHT, HEVESI,
          RA -- read once and referred to the Committee on Insurance -- reported
          from committee, advanced to  a  third  reading,  amended  and  ordered
          reprinted,  retaining  its  place  on  the  order  of third reading --
          ordered to a third reading, amended and ordered  reprinted,  retaining
          its  place  on  the  order  of third reading -- passed by Assembly and
          delivered to the Senate, recalled from the Senate, vote  reconsidered,
          bill  amended,  ordered reprinted, retaining its place on the order of
          third reading
 
        AN ACT to amend the insurance law and the public health law, in relation
          to prescription drug formulary changes during a contract year
 
          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 section 4909
     2  to read as follows:
     3    § 4909. Prescription drug formulary changes. (a) Except  as  otherwise
     4  provided  in  subsection  (c)  of this section, a health care plan shall
     5  not:
     6    (i) remove a prescription drug from a formulary;
     7    (ii) move a prescription drug to a  tier  with  a  larger  deductible,
     8  copayment, or coinsurance if the formulary includes two or more tiers of
     9  benefits  providing for different deductibles, copayments or coinsurance
    10  applicable to the prescription drugs in each tier; or
    11    (iii) add utilization management restrictions to a  prescription  drug
    12  on  a  formulary, unless such changes occur at the time of enrollment or
    13  issuance of coverage.
    14    (b) Prohibitions provided in subsection  (a)  of  this  section  shall
    15  apply  beginning  on the date on which open enrollment begins for a plan
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05529-11-8

        A. 2317--C                          2
 
     1  year and through the end of the plan year to which such open  enrollment
     2  period applies.
     3    (c)  (i) A health care plan with a formulary that includes two or more
     4  tiers of benefits providing for  different  deductibles,  copayments  or
     5  coinsurance  applicable  to  prescription  drugs in each tier may move a
     6  prescription drug to a tier with a larger deductible, copayment or coin-
     7  surance if an AB-rated generic equivalent or interchangeable  biological
     8  product for such prescription drug is added to the formulary at the same
     9  time.
    10    (ii)  A  health care plan may remove a prescription drug from a formu-
    11  lary if the federal Food and Drug Administration  determines  that  such
    12  prescription  drug  should  be  removed  from  the market, including new
    13  utilization management restrictions issued pursuant to federal Food  and
    14  Drug Administration safety concerns.
    15    (d)  A  health  care plan shall provide notice to policyholders of the
    16  intent to remove a prescription drug from a formulary or  alter  deduct-
    17  ible,  copayment  or coinsurance requirements in the upcoming plan year,
    18  thirty days prior to the open enrollment period for the consecutive plan
    19  year. Such notice of impending formulary and  deductible,  copayment  or
    20  coinsurance  changes shall also be posted on the plan's online formulary
    21  and in any prescription drug finder system that the plan provides to the
    22  public.
    23    § 2. The public health law is amended by adding a new section 4909  to
    24  read as follows:
    25    §  4909.  Prescription  drug formulary changes. 1. Except as otherwise
    26  provided in subdivision three of this section, a health care plan  shall
    27  not:
    28    (a) remove a prescription drug from a formulary;
    29    (b)  move  a  prescription  drug  to  a tier with a larger deductible,
    30  copayment, or coinsurance if the formulary includes two or more tiers of
    31  benefits providing for different deductibles, copayments or  coinsurance
    32  applicable to the prescription drugs in each tier; or
    33    (c)  add utilization management restrictions to a prescription drug on
    34  a formulary, unless such changes occur at  the  time  of  enrollment  or
    35  issuance of coverage.
    36    2.  Prohibitions  provided  in  subdivision  one of this section shall
    37  apply beginning on the date on which open enrollment begins for  a  plan
    38  year  and through the end of the plan year to which such open enrollment
    39  period applies.
    40    3. (a) A health care plan with a formulary that includes two  or  more
    41  tiers  of  benefits  providing  for different deductibles, copayments or
    42  coinsurance applicable to prescription drugs in each  tier  may  move  a
    43  prescription drug to a tier with a larger deductible, copayment or coin-
    44  surance  if an AB-rated generic equivalent or interchangeable biological
    45  product for such prescription drug is added to the formulary at the same
    46  time.
    47    (b) A health care plan may remove a prescription drug from a formulary
    48  if the  federal  Food  and  Drug  Administration  determines  that  such
    49  prescription  drug  should  be  removed  from  the market, including new
    50  utilization management restrictions issued pursuant to federal Food  and
    51  Drug Administration safety concerns.
    52    4.  A  health  care  plan shall provide notice to policyholders of the
    53  intent to remove a prescription drug from a formulary or  alter  deduct-
    54  ible,  copayment  or coinsurance requirements in the upcoming plan year,
    55  thirty days prior to the open enrollment period for the consecutive plan
    56  year. Such notice of impending formulary and  deductible,  copayment  or

        A. 2317--C                          3
 
     1  coinsurance  changes shall also be posted on the plan's online formulary
     2  and in any prescription drug finder system that the plan provides to the
     3  public.
     4    §  3.  This  act  shall take effect on the sixtieth day after it shall
     5  have become a law; provided, however, that  effective  immediately,  the
     6  addition,  amendment  and/or  repeal of any rule or regulation necessary
     7  for the implementation of this act on its effective date are  authorized
     8  to  be made and completed by the superintendent of financial services on
     9  or before such date.
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