2023 -- H 5350 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

     Introduced By: Representatives Morales, Chippendale, Kislak, McNamara, Place,
Kazarian, Spears, Donovan, Potter, and Newberry

     Date Introduced: February 03, 2023

     Referred To: House Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 27-18 of the General Laws entitled "Accident and Sickness Insurance

Policies" is hereby amended by adding thereto the following section:

     27-18-50.2. Specialty drugs.

     (a) The general assembly makes the following findings:

     (1) In 2015, an estimated six hundred thirty-five thousand (635,000) Rhode Island residents

had at least one chronic disease, and an estimated two hundred forty-nine thousand (249,000)

residents had two (2) or more chronic diseases, which significantly increases their likelihood to

depend on prescription specialty drugs;

     (2) In 2016, twenty-five percent (25%) of Rhode Island residents stopped taking a

prescription drug as prescribed due to cost;

     (3) Most specialty drugs do not have biosimilars, generic equivalents, or substitutes to

create competition and help lower their prices; and

     (4) In 2022, the Centers for Medicare and Medicaid Services define any drug for which the

negotiated price is six hundred seventy dollars ($670) per month or more, as a specialty drug.

     (b) As used in this section, the following words shall have the following meanings:

     (1) "Complex or chronic medical condition" means a physical, behavioral, or

developmental condition that is persistent or otherwise long-lasting in its effects or a disease that

advances over time, and:

     (i) May have no known cure;

     (ii) Is progressive; or

     (iii) Can be debilitating or fatal if left untreated or undertreated.

     "Complex or chronic medical condition" includes, but is not limited to, multiple sclerosis,

hepatitis c, and rheumatoid arthritis.

     (2) "Pre-service authorization" means a cost containment method that an insurer, a

nonprofit health service plan, or a health maintenance organization uses to review and preauthorize

coverage for drugs prescribed by a health care provider for a covered individual to control

utilization, quality, and claims.

     (3) "Rare medical condition" means a disease or condition that affects fewer than:

     (i) Two hundred thousand (200,000) individuals in the United States; or

     (ii) Approximately one in one thousand five hundred (1,500) individuals worldwide.

     "Rare medical condition" includes, but is not limited to, cystic fibrosis, hemophilia, and

multiple myeloma.

     (4) "Specialty drug" means a prescription drug that exceeds the threshold for a specialty

drug under the Medicare Part D program (Medicare Prescription Drug Improvement and

Modernization Act of 2003 (Public Law 108-173)).

     (5) "Specialty drug tier" means a formulary tier in the pharmacy benefit that imposes a

cost-sharing obligation for a specialty drug.

     (c) Every individual or group health insurance contract, plan or policy that provides

prescription drug coverage and is delivered, issued for delivery or renewed in this state on or after

January 1, 2025, shall limit any required copayment of coinsurance applicable to covered drugs on

a specialty drug tier to an amount not to exceed one hundred fifty dollars ($150) per month for each

drug up to a thirty-day (30) supply of any single drug. This limit shall be inclusive of any copayment

or coinsurance. This limit shall be applicable after any deductible is reached and until the

individual's maximum out-of-pocket limit has been reached.

     (d) Nothing in this section shall prevent an entity subject to this section from reducing a

covered individual's cost sharing for a specialty drug to an amount less than that described in section

(c) of this section.

     (e) The health insurance commissioner may promulgate any rules and regulations

necessary to implement and administer this section in accordance with any federal requirements

and shall use the commissioner's enforcement powers to obtain compliance with the provisions of

this section.

     SECTION 2. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

Corporations" is hereby amended by adding thereto the following section:

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     27-19-42.1. Specialty drugs.

     (a) The general assembly makes the following findings:

     (1) In 2015, an estimated six hundred thirty-five thousand (635,000) Rhode Island residents

had at least one chronic disease, and an estimated two hundred forty-nine thousand (249,000)

residents had two (2) or more chronic diseases, which significantly increases their likelihood to

depend on prescription specialty drugs;

     (2) In 2016, twenty-five percent (25%) of Rhode Island residents stopped taking a

prescription drug as prescribed due to cost;

     (3) Most specialty drugs do not have biosimilars, generic equivalents, or substitutes to

create competition and help lower their prices; and

     (4) In 2022, the Centers for Medicare and Medicaid Services define any drug for which the

negotiated price is six hundred seventy dollars ($670) per month or more, as a specialty drug.

     (b) As used in this section, the following words shall have the following meanings:

     (1) "Complex or chronic medical condition" means a physical, behavioral, or

developmental condition that is persistent or otherwise long-lasting in its effects or a disease that

advances over time, and:

     (i) May have no known cure;

     (ii) Is progressive; or

     (iii) Can be debilitating or fatal if left untreated or undertreated.

     "Complex or chronic medical condition" includes, but is not limited to, multiple sclerosis,

hepatitis c, and rheumatoid arthritis.

     (2) "Pre-service authorization" means a cost containment method that an insurer, a

nonprofit health service plan, or a health maintenance organization uses to review and preauthorize

coverage for drugs prescribed by a health care provider for a covered individual to control

utilization, quality, and claims.

     (3) "Rare medical condition" means a disease or condition that affects fewer than:

     (i) Two hundred thousand (200,000) individuals in the United States; or

     (ii) Approximately one in one thousand five hundred (1,500) individuals worldwide.

     "Rare medical condition" includes, but is not limited to, cystic fibrosis, hemophilia, and

multiple myeloma.

     (4) "Specialty drug" means a prescription drug that exceeds the threshold for a specialty

drug under the Medicare Part D program (Medicare Prescription Drug Improvement and

Modernization Act of 2003 (Public Law 108-173)).

     (5) "Specialty drug tier" means a formulary tier in the pharmacy benefit that imposes a

LC000200/SUB A/2 - Page 3 of 8

cost-sharing obligation for a specialty drug.

     (c) Every individual or group health insurance contract, plan or policy that provides

prescription drug coverage and is delivered, issued for delivery or renewed in this state on or after

January 1, 2025, shall limit any required copayment of coinsurance applicable to covered drugs on

a specialty drug tier to an amount not to exceed one hundred fifty dollars ($150) per month for each

drug up to a thirty-day (30) supply of any single drug. This limit shall be inclusive of any copayment

or coinsurance. This limit shall be applicable after any deductible is reached and until the

individual's maximum out-of-pocket limit has been reached.

     (d) Nothing in this section shall prevent an entity subject to this section from reducing a

covered individual's cost sharing for a specialty drug to an amount less than that described in section

(c) of this section.

     (e) The health insurance commissioner may promulgate any rules and regulations

necessary to implement and administer this section in accordance with any federal requirements

and shall use the commissioner's enforcement powers to obtain compliance with the provisions of

this section.

     SECTION 3. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Service

Corporations" is hereby amended by adding thereto the following section:

     27-20-37.1. Specialty drugs.

     (a) The general assembly makes the following findings:

     (1) In 2015, an estimated six hundred thirty-five thousand (635,000) Rhode Island residents

had at least one chronic disease, and an estimated two hundred forty-nine thousand (249,000)

residents had two (2) or more chronic diseases, which significantly increases their likelihood to

depend on prescription specialty drugs;

     (2) In 2016, twenty-five percent (25%) of Rhode Island residents stopped taking a

prescription drug as prescribed due to cost;

     (3) Most specialty drugs do not have biosimilars, generic equivalents, or substitutes to

create competition and help lower their prices; and

     (4) In 2022, the Centers for Medicare and Medicaid Services define any drug for which the

negotiated price is six hundred seventy dollars ($670) per month or more, as a specialty drug.

     (b) As used in this section, the following words shall have the following meanings:

     (1) "Complex or chronic medical condition" means a physical, behavioral, or

developmental condition that is persistent or otherwise long-lasting in its effects or a disease that

advances over time, and:

     (i) May have no known cure;

LC000200/SUB A/2 - Page 4 of 8

     (ii) Is progressive; or

     (iii) Can be debilitating or fatal if left untreated or undertreated.

     "Complex or chronic medical condition" includes, but is not limited to, multiple sclerosis,

hepatitis c, and rheumatoid arthritis.

     (2) "Pre-service authorization" means a cost containment method that an insurer, a

nonprofit health service plan, or a health maintenance organization uses to review and preauthorize

coverage for drugs prescribed by a health care provider for a covered individual to control

utilization, quality, and claims.

     (3) "Rare medical condition" means a disease or condition that affects fewer than:

     (i) Two hundred thousand (200,000) individuals in the United States; or

     (ii) Approximately one in one thousand five hundred (1,500) individuals worldwide.

     "Rare medical condition" includes, but is not limited to, cystic fibrosis, hemophilia, and

multiple myeloma.

     (4) "Specialty drug" means a prescription drug that exceeds the threshold for a specialty

drug under the Medicare Part D program (Medicare Prescription Drug Improvement and

Modernization Act of 2003 (Public Law 108-173)).

     (5) "Specialty drug tier" means a formulary tier in the pharmacy benefit that imposes a

cost-sharing obligation for a specialty drug.

     (c) Every individual or group health insurance contract, plan or policy that provides

prescription drug coverage and is delivered, issued for delivery or renewed in this state on or after

January 1, 2025, shall limit any required copayment of coinsurance applicable to covered drugs on

a specialty drug tier to an amount not to exceed one hundred fifty dollars ($150) per month for each

drug up to a thirty-day (30) supply of any single drug. This limit shall be inclusive of any copayment

or coinsurance. This limit shall be applicable after any deductible is reached and until the

individual's maximum out-of-pocket limit has been reached.

     (d) Nothing in this section shall prevent an entity subject to this section from reducing a

covered individual's cost sharing for a specialty drug to an amount less than that described in section

(c) of this section.

     (e) The health insurance commissioner may promulgate any rules and regulations

necessary to implement and administer this section in accordance with any federal requirements

and shall use the commissioner's enforcement powers to obtain compliance with the provisions of

this section.

     SECTION 4. Chapter 27-41 of the General Laws entitled "Health Maintenance

Organizations" is hereby amended by adding thereto the following section:

LC000200/SUB A/2 - Page 5 of 8

     27-41-38.3. Specialty drugs.

     (a) The general assembly makes the following findings:

     (1) In 2015, an estimated six hundred thirty-five thousand (635,000) Rhode Island residents

had at least one chronic disease, and an estimated two hundred forty-nine thousand (249,000)

residents had two (2) or more chronic diseases, which significantly increases their likelihood to

depend on prescription specialty drugs;

     (2) In 2016, twenty-five percent (25%) of Rhode Island residents stopped taking a

prescription drug as prescribed due to cost;

     (3) Most specialty drugs do not have biosimilars, generic equivalents, or substitutes to

create competition and help lower their prices; and

     (4) In 2022, the Centers for Medicare and Medicaid Services define any drug for which the

negotiated price is six hundred seventy dollars ($670) per month or more, as a specialty drug.

     (b) As used in this section, the following words shall have the following meanings:

     (1) "Complex or chronic medical condition" means a physical, behavioral, or

developmental condition that is persistent or otherwise long-lasting in its effects or a disease that

advances over time, and:

     (i) May have no known cure;

     (ii) Is progressive; or

     (iii) Can be debilitating or fatal if left untreated or undertreated.

     "Complex or chronic medical condition" includes, but is not limited to, multiple sclerosis,

hepatitis c, and rheumatoid arthritis.

     (2) "Pre-service authorization" means a cost containment method that an insurer, a

nonprofit health service plan, or a health maintenance organization uses to review and preauthorize

coverage for drugs prescribed by a health care provider for a covered individual to control

utilization, quality, and claims.

     (3) "Rare medical condition" means a disease or condition that affects fewer than:

     (i) Two hundred thousand (200,000) individuals in the United States; or

     (ii) Approximately one in one thousand five hundred (1,500) individuals worldwide.

     "Rare medical condition" includes, but is not limited to, cystic fibrosis, hemophilia, and

multiple myeloma.

     (4) "Specialty drug" means a prescription drug that exceeds the threshold for a specialty

drug under the Medicare Part D program (Medicare Prescription Drug Improvement and

Modernization Act of 2003 (Public Law 108-173)).

     (5) "Specialty drug tier" means a formulary tier in the pharmacy benefit that imposes a

LC000200/SUB A/2 - Page 6 of 8

cost-sharing obligation for a specialty drug.

     (c) Every individual or group health insurance contract, plan or policy that provides

prescription drug coverage and is delivered, issued for delivery or renewed in this state on or after

January 1, 2025, shall limit any required copayment of coinsurance applicable to covered drugs on

a specialty drug tier to an amount not to exceed one hundred fifty dollars ($150) per month for each

drug up to a thirty-day (30) supply of any single drug. This limit shall be inclusive of any copayment

or coinsurance. This limit shall be applicable after any deductible is reached and until the

individual's maximum out-of-pocket limit has been reached.

     (d) Nothing in this section shall prevent an entity subject to this section from reducing a

covered individual's cost sharing for a specialty drug to an amount less than that described in section

(c) of this section.

     (e) The health insurance commissioner may promulgate any rules and regulations

necessary to implement and administer this section in accordance with any federal requirements

and shall use the commissioner's enforcement powers to obtain compliance with the provisions of

this section.

     SECTION 5. This act shall take effect on January 1, 2025.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

***

     This act would limit the copayment or coinsurance requirement on specialty drugs to one

hundred fifty dollars ($150) for a thirty (30)-day supply regarding any specialty drug in any

individual or health insurance contract, plan or policy issued, delivered or renewed on or after

January 1, 2025. Specialty drugs would be defined as a drug prescribed to an individual with a

complex or chronic medical condition or a rare medical condition.

     This act would take effect on January 1, 2025.

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