BILL NUMBER:S6464

TITLE OF BILL:  An act to amend the insurance law, in relation to the
regulation of step therapy and first fail policies

PURPOSE: This bill would amend the insurance law by adding Article 33
which would regulate fail first accident/or health insurance policies
that require a patient to exhaust the least expensive drug options
before insurers will cover more expensive treatment options.

SUMMARY OF PROVISIONS:  This bill would amend the insurance law by
adding a new Article 33 which would ensure prescribers have a clear and
convenient process to override step therapy under specific conditions
when medically in the best interest of the patient.This bill does not
prohibit step therapy, but rather establishes guidelines to ensure
providers have an expeditious process to override step therapy in select
instances where based on sound clinical and medical evidence and profes-
sional medical judgment providers believe it is medically in the best
interest of the patient not to require failure on an alternative and
chemically different therapeutic agent.

In cases where step therapy is required, the bill would limit the time
period a patient could be subjected to step-therapy (or required to fail
on a treatment) to the period deemed necessary by the prescribing physi-
cian to determine the treatment's clinical effectiveness or a period no
longer than thirty days.
              

The amendments provided in this bill do not impact generic substitution
authorized by the New York State Medicaid Mandatory Generic Drug
Program.

JUSTIFICATION:  Step Therapy or fail first policies is a practice which
requires the least expensive drug in any class to be proscribed to a
patient first, even if the required therapy is a different therapeutic
agent that the patient's physician believes is medically in the best
interest of the patient.If the treatment is ineffective, insurers will
then cover the more expensive treatment options. There are currently no
time limits or restrictions placed on fail first policies. Patients,
including those with serious medical conditions, can be required to fail
for an indefinite period of time before the agent preferred by the
physician can be prescribed. This practice has the potential to result
in serious negative consequences for consumers and the public health
system. By limiting the array of medication options, both physicians and
consumers are forced to compromise their treatment decisions in a way
that is dangerous, time consuming and more expensive.

Under fail first, a consumer will often have to fail on one or more
medications before they are allowed access to the medication that his or
her physician would have tried as an initial treatment. It is poor clin-
ical care to delay the start of effective treatment and expose a person
to unnecessary risk. In this way, fail first denies patients the drugs
they need when they need them, and effectively allows insurers to prac-

tice medicine without a license. There are significant administrative
costs' associated with these types of policies and most importantly,
consumers can relapse and require more expensive medical interventions
such as hospitalization.

The internal and external appeals process provisions in the insurance
law, Title II (sections 4900-08 and 4910-17), do not provide the neces-
sary protections for patients and physicians regarding access to treat-
ments restricted by fail first protocols. Title II outlines an appeal
process for an "adverse determination"; however a fail first or step
therapy requirement does not qualify as an "adverse determination" under
the definition. The existing appeal right addresses a determination
later in the process than a step therapy override would.  For example,
the step therapy override process addresses whether a patient should be
required to try other medications before the desired treatment is
covered, rather than whether the desired treatment is medically neces-
sary and should be covered at all. The proposed legislation would expe-
dite the process and allow for an override at an earlier point in the
treatment process than a final adverse determination.

When medically in the best interest of the patient, prescribers need a
clear process to override the step therapy or fail first requirement. In
cases where step therapy or fail first policies continue to be applied,
the time period a patient could be subjected to step-therapy (or
required to fail on a treatment) should be limited to the period deemed
necessary by the prescribing physician to determine the treatment's
clinical effectiveness or a period of no longer than thirty days.

The following states have recently enacted legislation to prohibit or
limit fail first and step therapy practices when medically in the best
interest of the patient: Arkansas, Connecticut, Louisiana, Mississippi,
Texas, Utah, California, and Massachusetts. Patients in New York
currently subject to step therapy and fail first practices requite simi-
lar protections.

LEGISLATIVE HISTORY: New Bill

FISCAL IMPLICATIONS: Undetermined at this time.

EFFECTIVE DATE:  This act shall take effect on the 120th day after
becoming law.