S T A T E O F N E W Y O R K
________________________________________________________________________
10411
I N A S S E M B L Y
March 25, 2010
___________
Introduced by M. of A. BING, BENEDETTO, ESPAILLAT, TITONE, DINOWITZ,
MILLMAN, PHEFFER, COOK, GIBSON, JACOBS, SPANO, MARKEY, BARRON,
N. RIVERA, MAISEL, CHRISTENSEN, JAFFEE, HOOPER -- Multi-Sponsored by
-- M. of A. BOYLAND, GLICK, McENENY -- read once and referred to the
Committee on Insurance
AN ACT to amend the insurance law, in relation to the prohibition on
first fail policies
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The insurance law is amended by adding a new article 33 to
read as follows:
ARTICLE 33
PROHIBITION ON FIRST FAIL POLICIES
SECTION 3301. DEFINITIONS.
3302. PHARMACY BENEFITS MANAGER DUTIES.
3303. PRESCRIPTION DRUG DENIALS.
3304. SWITCH COMMUNICATIONS.
3305. PENALTIES.
3306. PRESCRIPTION DRUG RESTRICTION OVERRIDES.
S 3301. DEFINITIONS. AS USED IN THIS ARTICLE:
(A) "INSURER" SHALL MEAN ANY PERSON OR ENTITY WHO OFFERS A POLICY OF
ACCIDENT AND/OR HEALTH INSURANCE PURSUANT TO SECTION THREE THOUSAND TWO
HUNDRED SIXTEEN, THREE THOUSAND TWO HUNDRED TWENTY-ONE, OR FOUR THOUSAND
THREE HUNDRED THREE OF THIS CHAPTER OR ARTICLE FORTY-FOUR OF THE PUBLIC
HEALTH LAW; EXCEPT WHEN SUCH HEALTH CARE SERVICES ARE PROVIDED, DELIV-
ERED, ARRANGED FOR, PAID FOR, OR REIMBURSED BY ANY STATE, DEPARTMENT OR
AGENCY;
(B) "PHARMACY BENEFITS MANAGER" OR "PBM", MEANS A PERSON OR ENTITY
OTHER THAN A PHARMACY OR PHARMACIST ACTING AS AN ADMINISTRATOR IN
CONNECTION WITH PHARMACY BENEFITS;
(C) "SWITCH COMMUNICATION", MEANS A COMMUNICATION FROM ANY INSURER OR
PBM TO A PATIENT OR THE PATIENT'S PHYSICIAN THAT RECOMMENDS A PATIENT'S
MEDICATION BE SWITCHED BY THE ORIGINAL PRESCRIBING HEALTH CARE PROFES-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15501-02-0
A. 10411 2
SIONAL TO A DIFFERENT MEDICATION THAN THE MEDICATION ORIGINALLY
PRESCRIBED BY THE PRESCRIBING HEALTH CARE PROFESSIONAL.
S 3302. PHARMACY BENEFITS MANAGER DUTIES. (A) A PHARMACY BENEFITS
MANAGER SHALL:
(1) REMIT TO THE COVERED ENTITY EACH INDIVIDUAL CLAIM, THE
PRESCRIPTION NUMBER, THE ELEVEN-DIGIT NATIONAL DRUG CODE (NDC) NUMBER,
THE QUANTITY AND THE AMOUNT THE PHARMACY BENEFITS MANAGER ACTUALLY PAID
EACH PHARMACY OR PHARMACIST, AND THE AMOUNT CHARGED TO THE PERSON, BUSI-
NESS, OR OTHER ENTITY THAT IS PURCHASING PHARMACIST'S SERVICES THROUGH
THE PHARMACY BENEFITS MANAGER; AND
(2) ITEMIZE BY INDIVIDUAL CLAIM THE AMOUNTS THE PHARMACY BENEFITS
MANAGER ACTUALLY PAID EACH PHARMACY OR PHARMACIST FOR PHARMACIST'S
SERVICES ON ANY INVOICE, STATEMENT, OR REMITTANCE.
(B) A PHARMACY BENEFITS MANAGER SHALL NOT:
(1) AUTOMATICALLY ENROLL OR PASSIVELY ENROLL THE PHARMACY IN A
CONTRACT, OR MODIFY AN EXISTING CONTRACT WITHOUT AFFIRMATION FROM THE
PHARMACY OR PHARMACIST. THE PHARMACY SHALL SIGN A CONTRACT BEFORE ASSUM-
ING RESPONSIBILITY TO FILL PRESCRIPTIONS;
(2) REQUIRE THAT A PHARMACY OR PHARMACIST PARTICIPATE IN ONE PHARMACY
BENEFITS MANAGER CONTRACT IN ORDER TO PARTICIPATE IN ANOTHER CONTRACT;
OR
(3) DISCRIMINATE BETWEEN PHARMACIES OR PHARMACISTS ON THE BASIS OF
COPAYMENTS OR DAYS OF SUPPLY.
(C) WHEN A PHARMACY BENEFITS MANAGER CALCULATES THE CHARGE FOR A
PRESCRIPTION TO THE RECIPIENT OF THE DRUG AND THE COVERED ENTITY, THE
PHARMACY BENEFITS MANAGER SHALL USE THE SAME NDC PRICE USED WHEN CALCU-
LATING THE REIMBURSEMENT TO THE DISPENSING PHARMACY.
(D) WHEN AN INSURED PRESENTS A PRESCRIPTION TO A PHARMACY IN THE PHAR-
MACY BENEFITS MANAGER'S NETWORK, THE PHARMACY BENEFITS MANAGER SHALL NOT
REASSIGN SUCH PRESCRIPTION TO BE FILLED BY ANY OTHER PHARMACY. WHEN THE
PHARMACY BENEFITS MANAGER CONTACTS THE PRESCRIBING HEALTH CARE PRACTI-
TIONER TO AFFIRM OR MODIFY THE ORIGINAL PRESCRIPTION WHICH HAS BEEN
DELIVERED TO A PARTICIPATING PHARMACY, THE AFFIRMED OR MODIFIED
PRESCRIPTION SHALL BE FILLED AT THE PHARMACY TO WHICH THE INSURED
PRESENTED THE ORIGINAL PRESCRIPTION.
S 3303. PRESCRIPTION DRUG DENIALS. (A) A POLICY OF ACCIDENT AND/OR
HEALTH INSURANCE THAT COVERS PRESCRIPTION DRUGS SHALL NOT LIMIT, REDUCE,
OR DENY COVERAGE FOR ANY DRUG IF, PRIOR TO THE LIMITATION, REDUCTION, OR
DENIAL OF COVERAGE:
(1) ANY INSURED WAS USING THE DRUG;
(2) SUCH INSURED OR INSUREDS WERE COVERED UNDER THE POLICY; AND
(3) THE DRUG WAS COVERED UNDER THE POLICY FOR SUCH INSURED INDIVIDUAL
OR INDIVIDUALS.
(B) A LIMITATION, REDUCTION, OR DENIAL OF COVERAGE INCLUDES REMOVING A
DRUG FROM THE FORMULARY OR OTHER DRUG LIST, IMPOSING NEW PRIOR AUTHORI-
ZATION OR OTHER UTILIZATION MANAGEMENT TOOLS, OR PLACING THE DRUG ON A
FORMULARY TIER THAT INCREASES THE PATIENT'S COST-SHARING OBLIGATIONS OR
OTHERWISE INCREASES THE PATIENT'S COST-SHARING OBLIGATIONS.
(C) NOTHING IN THIS SECTION SHALL PROHIBIT AN INSURER FROM MAKING
UNIFORM CHANGES IN ITS BENEFIT DESIGN THAT APPLY TO ALL COVERED DRUGS,
UNIFORMLY REMOVING A DRUG FROM THE FORMULARY LIST FOR ALL INSUREDS, OR
INCREASING COST-SHARING OBLIGATIONS MERELY DUE TO A PERCENTAGE COINSU-
RANCE PAYMENT THAT NECESSARILY INCREASES WITH AN INCREASE IN THE UNDER-
LYING DRUG PRICES.
S 3304. SWITCH COMMUNICATIONS. (A) ANY TIME A PATIENT'S PRESCRIBED
MEDICATION IS RECOMMENDED TO BE SWITCHED TO A MEDICATION OTHER THAN THAT
A. 10411 3
ORIGINALLY PRESCRIBED BY THE PRESCRIBING PRACTITIONER, A SWITCH COMMUNI-
CATION SHALL BE SENT TO:
(1) THE PATIENT AND SHALL PROVIDE INFORMATION ABOUT WHY THE SWITCH IS
PROPOSED AND THE PATIENT'S RIGHTS FOR REFUSING THE RECOMMENDED CHANGE IN
TREATMENT; AND
(2) THE POLICY SPONSOR AND SHALL INFORM SUCH SPONSOR OF THE COST,
SHOWN IN CURRENCY FORM, OF THE RECOMMENDED MEDICATION AND THE COST,
SHOWN IN CURRENCY FORM, OF THE ORIGINALLY PRESCRIBED MEDICATION.
(B) SUCH SWITCH COMMUNICATION SHALL:
(1) CLEARLY IDENTIFY THE ORIGINALLY PRESCRIBED MEDICATION AND THE
MEDICATION TO WHICH IT HAS BEEN PROPOSED THAT THE PATIENT SHOULD BE
SWITCHED;
(2) EXPLAIN ANY FINANCIAL INCENTIVES THAT MAY BE PROVIDED TO, OR HAVE
BEEN OFFERED TO, THE PRESCRIBING HEALTH CARE PROFESSIONAL BY THE INSURER
OR PBM THAT COULD RESULT IN THE SWITCH TO THE DIFFERENT DRUG. IN PARTIC-
ULAR, CASH OR IN-KIND COMPENSATION PAYABLE TO PRESCRIBERS OR THEIR
PROFESSIONAL PRACTICES FOR SWITCHING PATIENTS FROM THEIR CURRENTLY
PRESCRIBED MEDICATION TO A DIFFERENT MEDICATION SHALL BE DISCLOSED TO
THE PATIENT AS WELL AS INCENTIVES THAT MAY BE PROVIDED THROUGH GENERAL
HEALTH CARE PROFESSIONAL COMPENSATION PROGRAMS USED BY THE INSURER OR
PBM;
(3) EXPLAIN ANY FINANCIAL INCENTIVE THAT AN INSURER OR PBM MAY HAVE TO
ENCOURAGE THE SWITCH TO A DIFFERENT DRUG;
(4) ADVISE THE PATIENT OF HIS OR HER RIGHTS TO DISCUSS THE PROPOSED
CHANGE IN TREATMENT BEFORE SUCH A SWITCH TAKES PLACE, INCLUDING A
DISCUSSION WITH THE PATIENT'S PRESCRIBING PRACTITIONER, THE FILING OF A
GRIEVANCE WITH THE INSURER TO PREVENT THE SWITCH IF SUCH A SWITCH IS
BASED ON A FINANCIAL INCENTIVE AND THE FILING OF A GRIEVANCE WITH THE
DEPARTMENT; AND
(5) EXPLAIN ANY COST-SHARING CHANGES FOR WHICH THE PATIENT IS RESPON-
SIBLE.
(C) SWITCH COMMUNICATIONS TO HEALTH CARE PROVIDERS SHALL DISCLOSE
FINANCIAL INCENTIVES OR BENEFITS THAT MAY BE RECEIVED BY THE INSURER OR
PBM.
(D) SWITCH COMMUNICATIONS TO HEALTH CARE PROVIDERS SHALL DIRECT THE
PRESCRIBER TO ADVISE THE PATIENT THAT IS SUBJECTED TO A SWITCH BY THE
PRESCRIBER OF ANY FINANCIAL INCENTIVES RECEIVED BY THE PRESCRIBER OR
OTHER INDUCEMENTS FROM THE INSURER OR PBM THAT MAY INFLUENCE THE DECI-
SION TO SWITCH.
(E) A COPY OF ANY SWITCH COMMUNICATION SENT TO A PATIENT SHALL ALSO BE
SENT TO THE PRESCRIBING PRACTITIONER.
(F) HEALTH INSURANCE PAYERS, INCLUDING EMPLOYERS, SHALL BE NOTIFIED OF
MEDICATION SWITCHES AMONG POLICY PARTICIPANTS. SUCH NOTIFICATION SHALL
INCLUDE ANY FINANCIAL INCENTIVE THE INSURER OR PBM MAY BE UTILIZING TO
ENCOURAGE OR INDUCE THE SWITCH. INFORMATION CONTAINED IN THE NOTIFICA-
TION SHALL BE IN THE AGGREGATE AND MUST NOT CONTAIN ANY PERSONALLY IDEN-
TIFIABLE INFORMATION.
(G) THE DEPARTMENT SHALL CREATE ONE FORM FOR INSURERS AND PHARMACY
BENEFIT MANAGERS TO USE IN SWITCH COMMUNICATIONS TO PATIENTS, PRESCRIB-
ING PRACTITIONERS, AND HEALTH INSURANCE PAYERS INCLUDING EMPLOYERS.
(H) THE DEPARTMENT SHALL PROMULGATE RULES GOVERNING SWITCH COMMUNI-
CATIONS. SUCH RULES SHALL INCLUDE, BUT NOT BE LIMITED TO THE FOLLOWING:
(1) PROCEDURES FOR VERIFYING THE ACCURACY OF ANY SWITCH COMMUNICATIONS
FROM POLICIES OF ACCIDENT AND/OR HEALTH INSURANCE AND PHARMACY BENEFIT
MANAGERS TO ENSURE THAT SUCH SWITCH COMMUNICATIONS ARE TRUTHFUL, ACCU-
RATE, AND NOT MISLEADING BASED ON COST TO THE PATIENT AND POLICY SPON-
A. 10411 4
SOR, THE PRODUCT PACKAGE LABELING, MEDICAL COMPENDIA RECOGNIZED BY THE
DRUG UTILIZATION REVIEW BOARD, AND PEER-REVIEWED MEDICAL LITERATURE,
WITH APPROPRIATE REFERENCES PROVIDED;
(2) EXCEPT FOR A SUBSTITUTION DUE TO THE FOOD AND DRUG ADMINIS-
TRATION'S WITHDRAWAL OF A DRUG FOR PRESCRIPTION, A REQUIREMENT THAT ALL
SWITCH COMMUNICATIONS BEAR A PROMINENT LEGEND ON THE FIRST PAGE THAT
STATES: "THIS IS NOT A PRODUCT SAFETY NOTICE. THIS IS A PROMOTIONAL
ANNOUNCEMENT FROM YOUR HEALTH CARE INSURER OR PHARMACY BENEFITS MANAGER
ABOUT ONE OF YOUR CURRENT PRESCRIBED MEDICATIONS.";
(3) A REQUIREMENT THAT, IF THE SWITCH COMMUNICATION CONTAINS INFORMA-
TION REGARDING A POTENTIAL THERAPEUTIC SUBSTITUTION, SUCH COMMUNICATION
SHALL EXPLAIN THAT MEDICATIONS IN THE SAME THERAPEUTIC CLASS ARE ASSOCI-
ATED WITH DIFFERENT RISKS AND BENEFITS AND MAY WORK DIFFERENTLY IN
DIFFERENT PATIENTS.
S 3305. PENALTIES. (A) ISSUING OR DELIVERING OR CAUSING TO BE ISSUED
OR DELIVERED A SWITCH COMMUNICATION THAT HAS NOT BEEN APPROVED AND IS
NOT IN COMPLIANCE WITH THE REQUIREMENTS OF SECTION THREE THOUSAND THREE
HUNDRED FOUR OF THIS ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWEN-
TY-FIVE THOUSAND DOLLARS.
(B) PROVIDING A MISREPRESENTATION OR FALSE STATEMENT IN A SWITCH
COMMUNICATION UNDER SECTION THREE THOUSAND THREE HUNDRED FOUR OF THIS
ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWENTY-FIVE THOUSAND
DOLLARS.
(C) ANY OTHER MATERIAL VIOLATION OF SECTION THREE THOUSAND THREE
HUNDRED FOUR OF THIS ARTICLE IS PUNISHABLE BY A FINE NOT TO EXCEED TWEN-
TY-FIVE THOUSAND DOLLARS.
S 3306. PRESCRIPTION DRUG RESTRICTION OVERRIDES. (A) WHEN MEDICATIONS
FOR THE TREATMENT OF ANY MEDICAL CONDITION ARE RESTRICTED FOR USE BY AN
INSURER OR PBM BY A STEP THERAPY OR FAIL FIRST PROTOCOL, A PRESCRIBER
MAY OVERRIDE SUCH RESTRICTION IF:
(1) THE PREFERRED TREATMENT BY THE INSURER OR THE PBM HAS BEEN INEF-
FECTIVE IN THE TREATMENT OF THE COVERED PERSON'S DISEASE OR MEDICAL
CONDITION; OR
(2) BASED ON SOUND CLINICAL EVIDENCE AND MEDICAL AND SCIENTIFIC
EVIDENCE:
(A) THE PREFERRED TREATMENT IS EXPECTED TO BE INEFFECTIVE BASED ON THE
KNOWN RELEVANT PHYSICAL OR MENTAL CHARACTERISTICS OF THE COVERED PERSON
AND KNOWN CHARACTERISTICS OF THE DRUG REGIMEN, AND IS LIKELY TO BE INEF-
FECTIVE OR ADVERSELY AFFECT THE DRUG'S EFFECTIVENESS OR PATIENT COMPLI-
ANCE; OR
(B) THE PREFERRED TREATMENT HAS CAUSED OR IS LIKELY TO CAUSE AN
ADVERSE REACTION OR OTHER HARM TO THE COVERED PERSON.
(B) THE DURATION OF ANY STEP THERAPY OR FAIL FIRST PROTOCOL SHALL NOT
BE LONGER THAN A PERIOD OF FOURTEEN DAYS WHEN SUCH TREATMENT IS DEEMED
CLINICALLY INEFFECTIVE BY THE PRESCRIBING PHYSICIAN.
(C) FOR MEDICATIONS WITH NO GENERIC EQUIVALENT AND FOR WHICH THE
PRESCRIBING PHYSICIAN IN THEIR CLINICAL JUDGMENT FEELS THAT NO APPROPRI-
ATE THERAPEUTIC ALTERNATIVE IS AVAILABLE AN INSURER OR PBM SHALL PROVIDE
ACCESS TO UNITED STATES FOOD AND DRUG ADMINISTRATION (FDA) LABELED MEDI-
CATIONS WITHOUT RESTRICTION TO TREAT SUCH MEDICAL CONDITIONS FOR WHICH
AN FDA LABELED MEDICATION IS AVAILABLE.
(D) NOTHING IN THIS SECTION SHALL REQUIRE COVERAGE FOR A CONDITION
SPECIFICALLY EXCLUDED BY THE POLICY WHICH IS NOT OTHERWISE COVERED BY
LAW.
S 2. This act shall take effect immediately.