2018 -- H 7702

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LC005034

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

     Introduced By: Representatives Lombardi, Hull, Walsh, Ajello, and Vella-Wilkinson

     Date Introduced: February 28, 2018

     Referred To: House Health, Education & Welfare

     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 adversely 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 its 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.

     (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.

     (f) No contract between an insurance carrier or pharmacy benefit manager and a

contracted pharmacy shall contain any provision prohibiting or penalizing, including through

increased utilization review, reduced payments or other financial disincentives, a pharmacist’s

disclosure to an individual purchasing prescription medication relative to information regarding

the cost of the prescription medication to the individual or the availability of any therapeutically

equivalent alternative medications or alternative methods of purchasing the prescription

medication, including, but not limited to, paying a cash price, that are less expensive than the cost

of the prescription medication to the individual.

     SECTION 2. Section 27-19-26 of the General Laws in Chapter 27-19 entitled "Nonprofit

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

     27-19-26. Drug coverage.

     (a) No group health insurer subject to the provisions of this chapter that provides

coverage for prescription drugs under a group plan master contract delivered, issued for delivery,

or renewed in this state may require any person covered under the contract to obtain prescription

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drugs from a mail order pharmacy as a condition of obtaining benefits for the drugs.

     (b) No contract between an insurance carrier or pharmacy benefit manager and a

nonprofit hospital service corporation shall contain any provision prohibiting or penalizing,

including through increased utilization review, reduced payments or other financial disincentives,

a nonprofit hospital service corporation’s disclosure to an individual purchasing prescription

medication relative to information regarding the cost of the prescription medication to the

individual or the availability of any therapeutically equivalent alternative medications or

alternative methods of purchasing the prescription medication, including, but not limited to,

paying a cash price, that are less expensive than the cost of the prescription medication to the

individual.

     SECTION 3. Section 27-20-23 of the General Laws in Chapter 27-20 entitled "Nonprofit

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

     27-20-23. Drug coverage.

     (a) No group health insurer subject to the provisions of this chapter that provides

coverage for prescription drugs under a group plan master contract delivered, issued for delivery,

or renewed in this state may require any person covered under the contract to obtain prescription

drugs from a mail order pharmacy as a condition of obtaining benefits for the drugs.

     (b) No contract between an insurance carrier or pharmacy benefit manager and a

nonprofit medical service corporation shall contain any provision prohibiting or penalizing,

including through increased utilization review, reduced payments or other financial disincentives,

a nonprofit medical service corporation’s disclosure to an individual purchasing prescription

medication relative to information regarding the cost of the prescription medication to the

individual or the availability of any therapeutically equivalent alternative medications or

alternative methods of purchasing the prescription medication, including, but not limited to,

paying a cash price, that are less expensive than the cost of the prescription medication to the

individual.

     SECTION 4. Section 27-41-38 of the General Laws in Chapter 27-41 entitled "Health

Maintenance Organizations" is hereby amended to read as follows:

     27-41-38. Drug coverage.

     (a) No health maintenance organization that provides coverage for prescription drugs

under a group plan master contract delivered, issued for delivery, or renewed in this state may

require any person covered under the contract to obtain prescription drugs from a mail order

pharmacy as a condition of obtaining benefits for the drugs.

     (b) No contract between an insurance carrier or pharmacy benefit manager and a health

LC005034 - Page 3 of 5

maintenance organization shall contain any provision prohibiting or penalizing, including through

increased utilization review, reduced payments or other financial disincentives, a health service

organization’s disclosure to an individual purchasing prescription medication relative to

information regarding the cost of the prescription medication to the individual or the availability

of any therapeutically equivalent alternative medications or alternative methods of purchasing the

prescription medication, including, but not limited to, paying a cash price, that are less expensive

than the cost of the prescription medication to the individual.

     SECTION 5. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

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     This act would prohibit health insurance companies from penalizing pharmacies,

nonprofit hospital service corporations, nonprofit medical service corporations or health service

organizations from disclosing to a patient or to an individual purchasing prescription medication,

information regarding the cost of the prescription medication to the individual or the availability

of any therapeutically equivalent alternative medications or alternative methods of purchasing the

prescription medication, including, but not limited to, paying a cash price, that are less expensive

than the cost of the prescription medication to the individual.

     This act would take effect upon passage.

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