2016 -- S 2294 SUBSTITUTE A

========

LC003117/SUB A

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

____________

A N   A C T

RELATING TO INSURANCE -- DRUG COVERAGE

     Introduced By: Senators Crowley, Sosnowski, Metts, and Miller

     Date Introduced: February 09, 2016

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-18-50 of the General Laws in Chapter 27-18 entitled "Accident

and Sickness Insurance Policies" is hereby amended to read as follows:

     27-18-50. Drug coverage. -- (a) Any accident and sickness insurer that utilizes a

formulary of medications for which coverage is provided under an individual or group plan

master contract shall require any physician or other person authorized by the department of health

to prescribe medication to prescribe from the formulary. A physician or other person authorized

by the department of health to prescribe medication shall be allowed to prescribe medications

previously on, or not on, the accident and sickness insurer's formulary if he or she believes that

the prescription of the non-formulary medication is medically necessary. An accident and

sickness insurer shall be required to provide coverage for a non-formulary medication only when

the non-formulary medication meets the accident and sickness insurer's medical exception criteria

for the coverage of that medication.

      (b) An accident and sickness insurer's medical exception criteria for the coverage of non-

formulary medications shall be developed in accordance with § 23-17.13-3(c)(3).

      (c) Any subscriber who is aggrieved by a denial of benefits to be provided under this

section may appeal the denial in accordance with the rules and regulations promulgated by the

department of health pursuant to chapter 17.12 of title 23.

     (d) Prior to removing a prescription drug from its plan's formulary or making any change

in the preferred or tiered cost-sharing status of a covered prescription drug, an accident and

sickness insurer must provide at least thirty (30) days' notice to authorized prescribers by

established communication methods of policy and program updates and by updating available

references on web-based publications. All affected members must be provided at least thirty (30)

days' notice prior to the date such change becomes effective by a direct notification:

     (i) The written or electronic notice must contain the following information:

     (A) The name of the affected prescription drug;

     (B) Whether the plan is removing the prescription drug from the formulary, or changing

its preferred or tiered cost-sharing status; and

      (C) The means by which subscribers may obtain a coverage determination or medical

exception, in the case of drugs that will require prior authorization or are formulary exclusions

respectively.

     (ii) An accident and sickness insurer may immediately remove from their plan

formularies covered prescription drugs deemed unsafe by the accident and sickness insurer or the

Food and Drug Administration, or removed from the market by their manufacturer, without

meeting the requirements of this section.

      (d)(e) This section shall not apply to insurance coverage providing benefits for: (1)

hospital confinement indemnity; (2) disability income; (3) accident only; (4) long term care; (5)

Medicare supplement; (6) limited benefit health; (7) specified disease indemnity; (8) sickness or

bodily injury or death by accident or both; or (9) other limited benefit policies.

     SECTION 2. Section 27-19-42 of the General Laws in Chapter 27-19 entitled "Nonprofit

Hospital Service Corporations" is hereby amended to read as follows:

     27-19-42. Drug coverage. -- (a) Any nonprofit hospital service corporation that utilizes a

formulary of medications for which coverage is provided under an individual or group plan

master contract shall require any physician or other person authorized by the department of health

to prescribe medication to prescribe from the formulary. A physician or other person authorized

by the department of health to prescribe medication shall be allowed to prescribe medications

previously on, or not on, the nonprofit hospital service corporation's formulary if he or she

believes that the prescription of the non-formulary medication is medically necessary. A

nonprofit hospital service corporation shall be required to provide coverage for a non-formulary

medication only when the non-formulary medication meets the nonprofit hospital service

corporation's medical exception criteria for the coverage of that medication.

      (b) A nonprofit hospital service corporation's medical exception criteria for the coverage

of non-formulary medications shall be developed in accordance with § 23-17.13-3(c)(3).

      (c) Any subscriber who is aggrieved by a denial of benefits to be provided under this

LC003117/SUB A - Page 2 of 6

section may appeal the denial in accordance with the rules and regulations promulgated by the

department of health pursuant to chapter 17.12 of title 23.

     (d) Prior to removing a prescription drug from its plan's formulary or making any change

in the preferred or tiered cost-sharing status of a covered prescription drug, a nonprofit hospital

service corporation must provide at least thirty (30) days' notice to authorized prescribers by

established communication methods of policy and program updates and by updating available

references on web-based publications. All affected members must be provided at least thirty (30)

days' notice prior to the date such change becomes effective by a direct notification:

     (i) The written or electronic notice must contain the following information:

     (A) The name of the affected prescription drug;

     (B) Whether the plan is removing the prescription drug from the formulary, or changing

its preferred or tiered cost-sharing status; and

     (C) The means by which subscribers may obtain a coverage determination or medical

exception, in the case of drugs that will require prior authorization or are formulary exclusions

respectively.

     (ii) A nonprofit hospital service corporation may immediately remove from their plan

formularies covered prescription drugs deemed unsafe by the nonprofit hospital service

corporation or the Food and Drug Administration, or removed from the market by their

manufacturer, without meeting the requirements of this section.

     SECTION 3. Section 27-20-37 of the General Laws in Chapter 27-20 entitled "Nonprofit

Medical Service Corporations" is hereby amended to read as follows:

     27-20-37. Drug coverage. -- (a) Any nonprofit medical service corporation that utilizes a

formulary of medications for which coverage is provided under an individual or group plan

master contract shall require any physician or other person authorized by the department of health

to prescribe medication to prescribe from the formulary. A physician or other person authorized

by the department of health to prescribe medication shall be allowed to prescribe medications

previously on, or not on, the nonprofit medical service corporation's formulary if he or she

believes that the prescription of the non-formulary medication is medically necessary. A

nonprofit hospital service corporation shall be required to provide coverage for a non-formulary

medication only when the non-formulary medication meets the nonprofit medical service

corporation's medical exception criteria for the coverage of that medication.

      (b) A nonprofit medical service corporation's medical exception criteria for the coverage

of non-formulary medications shall be developed in accordance with § 23-17.13-3(c)(3).

      (c) Any subscriber who is aggrieved by a denial of benefits to be provided under this

LC003117/SUB A - Page 3 of 6

section may appeal the denial in accordance with the rules and regulations promulgated by the

department of health pursuant to chapter 17.12 of title 23.

     (d) Prior to removing a prescription drug from its plan's formulary or making any change

in the preferred or tiered cost-sharing status of a covered prescription drug, a nonprofit medical

service corporation must provide at least thirty (30) days' notice to authorized prescribers by

established communication methods of policy and program updates and by updating available

references on web-based publications. All affected members must be provided at least thirty (30)

days' notice prior to the date such change becomes effective by a direct notification:

     (i) The written or electronic notice must contain the following information:

     (A) The name of the affected prescription drug;

     (B) Whether the plan is removing the prescription drug from the formulary, or changing

its preferred or tiered cost-sharing status; and

     (C) The means by which subscribers may obtain a coverage determination or medical

exception, in the case of drugs that will require prior authorization or are formulary exclusions

respectively.

     (ii) A nonprofit medical service corporation may immediately remove from their plan

formularies covered prescription drugs deemed unsafe by the nonprofit medical service

corporation or the Food and Drug Administration, or removed from the market by their

manufacturer, without meeting the requirements of this section.

     SECTION 4. Section 27-20.1-15 of the General Laws in Chapter 27-20.1 entitled

"Nonprofit Dental Service Corporations" is hereby amended to read as follows:

     27-20.1-15. Drug coverage. -- (a) Any nonprofit dental service corporation that utilizes a

formulary of medications for which coverage is provided under an individual or group plan

master contract shall require any physician or other person authorized by the department of health

to prescribe medication to prescribe from the formulary. A physician or other person authorized

by the department of health to prescribe medication shall be allowed to prescribe medications

previously on, or not on, the nonprofit dental service corporation's formulary if he or she believes

that the prescription of the non-formulary medication is medically necessary. A nonprofit dental

service corporation shall be required to provide coverage for a non-formulary medication only

when the non-formulary medication meets the nonprofit dental service corporation's medical

exception criteria for the coverage of that medication.

      (b) A nonprofit dental service corporation's medical exception criteria for the coverage

of non-formulary medications shall be developed in accordance with § 23-17.13-3(c)(3).

      (c) Any subscriber who is aggrieved by a denial of benefits to be provided under this

LC003117/SUB A - Page 4 of 6

section may appeal the denial in accordance with the rules and regulations promulgated by the

department of health pursuant to chapter 17.12 of title 23.

     (d) Prior to removing a prescription drug from its plan's formulary or making any change

in the preferred or tiered cost-sharing status of a covered prescription drug, a nonprofit dental

service corporation must provide at least thirty (30) days' notice to authorized prescribers by

established communication methods of policy and program updates and by updating available

references on web-based publications. All affected members must be provided at least thirty (30)

days' notice prior to the date such change becomes effective by a direct notification:

     (i) The written or electronic notice must contain the following information:

     (A) The name of the affected prescription drug;

     (B) Whether the plan is removing the prescription drug from the formulary, or changing

its preferred or tiered cost-sharing status; and

     (C) The means by which subscribers may obtain a coverage determination or medical

exception, in the case of drugs that will require prior authorization or are formulary exclusions

respectively.

     (ii) A nonprofit dental service corporation may immediately remove from their plan

formularies covered prescription drugs deemed unsafe by the nonprofit dental service corporation

or the Food and Drug Administration, or removed from the market by their manufacturer, without

meeting the requirements of this section.

     SECTION 5. Section 27-41-51 of the General Laws in Chapter 27-41 entitled "Health

Maintenance Organizations" is hereby amended to read as follows:

     27-41-51. Drug coverage. -- (a) Any health maintenance organization that utilizes a

formulary of medications for which coverage is provided under an individual or group plan

master contract shall require any physician or other person authorized by the department of health

to prescribe medication to prescribe from the formulary. A physician or other person authorized

by the department of health to prescribe medication shall be allowed to prescribe medications

previously on, or not on, the health maintenance organization's formulary if he or she believes

that the prescription of non-formulary medication is medically necessary. A health maintenance

organization shall be required to provide coverage for a non-formulary medication only when the

non-formulary medication meets the health maintenance organization's medical exception criteria

for the coverage of that medication.

      (b) A health maintenance organization's medical exception criteria for the coverage of

non-formulary medications shall be developed in accordance with § 23-17.13-3(c)(3).

      (c) Any subscriber who is aggrieved by a denial of benefits to be provided under this

LC003117/SUB A - Page 5 of 6

section may appeal the denial in accordance with the rules and regulations promulgated by the

department of health pursuant to chapter 17.12 of title 23.

     (d) Prior to removing a prescription drug from its plan's formulary or making any change

in the preferred or tiered cost-sharing status of a covered prescription drug, a health maintenance

organization must provide at least thirty (30) days' notice to authorized prescribers by established

communication methods of policy and program updates and by updating available references on

web-based publications. All affected members must be provided at least thirty (30) days' notice

prior to the date such change becomes effective by a direct notification:

     (i) The written or electronic notice must contain the following information:

     (A) The name of the affected prescription drug;

     (B) Whether the plan is removing the prescription drug from the formulary, or changing

its preferred or tiered cost-sharing status; and

     (C) The means by which subscribers may obtain a coverage determination or medical

exception, in the case of drugs that will require prior authorization or are formulary exclusions

respectively.

     (ii) A health maintenance organization may immediately remove from their plan

formularies covered prescription drugs deemed unsafe by the health maintenance organization or

the Food and Drug Administration, or removed from the market by their manufacturer, without

meeting the requirements of this section.

     SECTION 6. This act shall take effect on January 1, 2017.

========

LC003117/SUB A

========

LC003117/SUB A - Page 6 of 6

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- DRUG COVERAGE

***

     This act would require accident and sickness insurers, nonprofit hospital, medical and

dental service corporations and health maintenance organizations to give thirty (30) days' notice

to authorized prescribers by established communication methods and by updating available

references and web-based publications before making any change in preferred or tiered cost

sharing status of a covered drug. Any drug deemed unsafe by those entities or by the Food and

Drug Administration may be removed immediately without prior notice.

     This act would take effect on January 1, 2017.

========

LC003117/SUB A

========

LC003117/SUB A - Page 7 of 6