NY State Senate Bill 2017-S7872

Senate Bill S7872

2017-2018 Legislative Session

Relates to utilization review program standards and pre-authorization for certain health care services

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Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 05, 2018	referred to health

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2017-S7872 (ACTIVE) - Details

See Assembly Version of this Bill:: A9588
Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §§4902 & 4903, add §4909, Pub Health L; amd §§4902, 4903 & 3238, add §4909, Ins L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S2847, A3038
2021-2022: S6435, A7129
2023-2024: S3400, A7268

2017-S7872 (ACTIVE) - Summary

Relates to utilization review program standards; requires use of evidence-based and peer reviewed clinical review criteria; amends provisions relating to prescription drug formulary changes and pre-authorization for certain health care services.

2017-S7872 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S7872

SPONSOR: HANNON
 
TITLE OF BILL:

An act to amend the public health law and the insurance law, in relation
to utilization review program standards and prescription drug formulary
changes during a contract year, and in relation to pre-authorization of
health care services

 
PURPOSE:

The purpose of this legislation is to reduce administrative requirements
of health care practitioners which interfere with efforts to assure
patients receive appropriate care.

 
SUMMARY OF PROVISIONS:

Section 1 amends paragraph (c) of subdivision 1 of section 4902 of the
public health law to add "such clinical review criteria shall utilize
recognized evidence-based and peer reviewed clinical review criteria

that takes into account the needs of atypical patient populations and
diagnoses."

Section 2 amends paragraph (a) of subdivision 2 of section 4903 of the
public health law by changing from three business days to "forty-eight
hours" the amount of time a utilization review agent shall make and
communicate a determination and adds "or within twenty-four hours of the
receipt of necessary information if the request is for an enrollee with
a medical condition that places the health of the insured in serious
jeopardy without the health care services recommended by the enrollee's
health care professional."

Section 3 amends the public health law by adding a new section 4909
related to prescription drug formulary changes.

Section 4 amends subdivision (a) of section 4902 of the insurance law by
adding "such clinical review criteria shall utilize recognized
evidence-based and peer-reviewed clinical review criteria that takes
into account the needs of a typical patient populations and diagnoses."

Section 5 amends paragraph 1 of subdivision (b) of section 4903 of the
insurance law by changing from three business days to "forty-eight
hours" the amount of time a utilization review agent shall make and
communicate a determination and adds "or within twenty-four hours of the
receipt of necessary information if the request is for an enrollee with
a medical condition that places the health of the insured in serious
jeopardy without the health care services recommended by the enrollee's
health care professional." This section also adds "An approval of
request for pre-authorization shall be valid for the duration of the
prescription or treatment requested for pre-authorization."

Section 6 amends the insurance law by adding a new section 4909 related
to prescription drug formulary changes.

Section 7 amends subdivision (a) of section 3238 of the insurance law by
adding "and eligibility confirmed on the day of the service."


Section 8 states the act shall take effect on the ninetieth day after it
shall have become a law.

 
JUSTIFICATION:

Several studies have highlighted the inordinate amount of time spent
away from delivering patient care to obtain prior authorization. For
example, a 2016 Annals of Internal Medicine study concluded that, for
every hour a physician spends on delivering care to a patient, two more
are spent on administrative tasks.

The legislation would enact a number of common sense reforms proposed in
a recently released document entitled Prior Authorization and Utiliza-
tion Management Reform Principles
(https://vvww.amaassn.org/sites/default/ files/mediabrowser/principles-
with- signatorypage-for-slsc.pdf).  These principles were developed by
the American Medical Association, the American Academy of Family Physi-
cians, the American Hospital Association, Medical Group Management Asso-
ciation, American Pharmacists Association, and Arthritis Foundation
along with other health and patient advocacy associations. As noted in
the introductory comments to the principles, utilization management
programs such as prior authorization can create significant barriers for
patients by delaying the start or continuation of necessary treatment
and negatively affecting patient health outcomes. The time-consuming
processes used in these programs burden providers and divert valuable
resources away from direct patient care.

While some of these prior authorization principles articulated in the
AMA/AHA et. al. document have already been enacted in New York, many
others have not. This legislation would enact several of these princi-
ples into law, such as assuring that utilization review criteria are
evidence-based, prohibiting midyear formulary changes, and assuring that
once a prior authorization is received it will not need to be repeated.
This legislation would reduce the administrative barriers that sometimes
unnecessarily delay and interfere with patients receiving needed care
and medications recommended by their treating health care provider.

 
LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
90 days after it shall have become a law.

2017-S7872 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7872
 
                             I N  S E N A T E
 
                               March 5, 2018
                                ___________
 
 Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Health
 
 AN ACT to amend the public health law and the insurance law, in relation
   to utilization review program standards and prescription  drug  formu-
   lary changes during a contract year, and in relation to pre-authoriza-
   tion of health care services

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  Paragraph (c) of subdivision 1  of  section  4902  of  the
 public  health  law,  as  added  by  chapter 705 of the laws of 1996, is
 amended to read as follows:
   (c) Utilization of written clinical review criteria developed pursuant
 to a utilization  review  plan.  SUCH  CLINICAL  REVIEW  CRITERIA  SHALL
 UTILIZE  RECOGNIZED  EVIDENCE-BASED  AND  PEER  REVIEWED CLINICAL REVIEW
 CRITERIA THAT TAKES INTO ACCOUNT THE NEEDS  OF  ATYPICAL  PATIENT  POPU-
 LATIONS AND DIAGNOSES;
   §  2.  Paragraph  (a)  of  subdivision 2 of section 4903 of the public
 health law, as amended by chapter 371 of the laws of 2015, is amended to
 read as follows:
   (a) A utilization review agent shall make a utilization review  deter-
 mination  involving health care services which require pre-authorization
 and provide notice of a determination  to  the  enrollee  or  enrollee's
 designee  and  the  enrollee's  health care provider by telephone and in
 writing within [three business days] FORTY-EIGHT HOURS of receipt of the
 necessary information, OR WITHIN TWENTY-FOUR HOURS  OF  THE  RECEIPT  OF
 NECESSARY  INFORMATION  IF THE REQUEST IS FOR AN ENROLLEE WITH A MEDICAL
 CONDITION THAT PLACES THE HEALTH OF  THE  INSURED  IN  SERIOUS  JEOPARDY
 WITHOUT  THE  HEALTH  CARE SERVICES RECOMMENDED BY THE ENROLLEE'S HEALTH
 CARE PROFESSIONAL. To the extent practicable, such written  notification
 to  the  enrollee's  health care provider shall be transmitted electron-
 ically, in a manner and in a form agreed  upon  by  the  parties.    The
 notification  shall  identify;  (i)  whether the services are considered
 in-network or out-of-network; (ii) and whether the enrollee will be held
 harmless for the services and not be responsible for any payment,  other
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD11465-05-8

 S. 7872                             2
 
 than any applicable co-payment or co-insurance; (iii) as applicable, the
 dollar  amount  the  health care plan will pay if the service is out-of-
 network; and (iv) as applicable, information explaining how an  enrollee
 may  determine  the  anticipated  out-of-pocket  cost for out-of-network
 health care services in a geographical area or zip code based  upon  the
 difference  between what the health care plan will reimburse for out-of-
 network health care services and the usual and customary cost  for  out-
 of-network  health  care services. AN APPROVAL FOR A REQUEST FOR PRE-AU-
 THORIZATION SHALL BE VALID FOR  THE  DURATION  OF  THE  PRESCRIPTION  OR
 TREATMENT AS REQUESTED BY THE ENROLLEE'S HEALTH CARE PROVIDER.
   §  3. The public health law is amended by adding a new section 4909 to
 read as follows:
   § 4909. PRESCRIPTION DRUG FORMULARY CHANGES. 1.  A  HEALTH  CARE  PLAN
 REQUIRED  TO  PROVIDE  ESSENTIAL  HEALTH  BENEFITS  SHALL NOT, EXCEPT AS
 OTHERWISE  PROVIDED  IN  SUBDIVISION  TWO  OF  THIS  SECTION,  REMOVE  A
 PRESCRIPTION DRUG FROM A FORMULARY:
   (A)  IF THE FORMULARY INCLUDES TWO OR MORE TIERS OF BENEFITS PROVIDING
 FOR DIFFERENT DEDUCTIBLES, COPAYMENTS OR COINSURANCE APPLICABLE  TO  THE
 PRESCRIPTION  DRUGS  IN  EACH  TIER, MOVE A DRUG TO A TIER WITH A LARGER
 DEDUCTIBLE, COPAYMENT OR COINSURANCE, OR
   (B) ADD UTILIZATION  MANAGEMENT  RESTRICTIONS  TO  A  FORMULARY  DRUG,
 UNLESS  SUCH  CHANGES  OCCUR  AT  THE  TIME OF ENROLLMENT OR ISSUANCE OF
 COVERAGE.  SUCH PROHIBITION SHALL APPLY BEGINNING ON THE DATE  ON  WHICH
 OPEN  ENROLLMENT  BEGINS FOR A PLAN YEAR AND THROUGH THE END OF THE PLAN
 YEAR TO WHICH SUCH OPEN ENROLLMENT PERIOD APPLIES.
   2. (A) A HEALTH CARE PLAN WITH A FORMULARY THAT INCLUDES TWO  OR  MORE
 TIERS  OF  BENEFITS  PROVIDING  FOR DIFFERENT DEDUCTIBLES, COPAYMENTS OR
 COINSURANCE APPLICABLE TO PRESCRIPTION DRUGS IN EACH  TIER  MAY  MOVE  A
 PRESCRIPTION  DRUG TO A TIER WITH A LARGER DEDUCIBLE, COPAYMENT OR COIN-
 SURANCE IF AN AB-RATED GENERIC DRUG FOR SUCH PRESCRIPTION DRUG IS  ADDED
 TO THE FORMULARY AT THE SAME TIME.
   (B) A HEALTH CARE PLAN MAY REMOVE A PRESCRIPTION DRUG FROM A FORMULARY
 IF  THE  FEDERAL  FOOD AND DRUG ADMINISTRATION DETERMINES THAT SUCH DRUG
 SHOULD BE REMOVED FROM THE MARKET.
   § 4. Paragraph 3 of subsection (a) of section 4902  of  the  insurance
 law,  as added by chapter 705 of the laws of 1996, is amended to read as
 follows:
   (3) Utilization of written clinical review criteria developed pursuant
 to a utilization  review  plan.  SUCH  CLINICAL  REVIEW  CRITERIA  SHALL
 UTILIZE  RECOGNIZED  EVIDENCE-BASED  AND  PEER  REVIEWED CLINICAL REVIEW
 CRITERIA THAT TAKES INTO ACCOUNT THE NEEDS  OF  ATYPICAL  PATIENT  POPU-
 LATIONS AND DIAGNOSES;
   §  5.  Paragraph  1 of subsection (b) of section 4903 of the insurance
 law, as amended by chapter 371 of the laws of 2015, is amended  to  read
 as follows:
   (1)  A utilization review agent shall make a utilization review deter-
 mination involving health care services which require  pre-authorization
 and provide notice of a determination to the insured or insured's desig-
 nee  and  the insured's health care provider by telephone and in writing
 within [three business days] FORTY-EIGHT HOURS of receipt of the  neces-
 sary  information,  OR WITHIN TWENTY-FOUR HOURS OF THE RECEIPT OF NECES-
 SARY INFORMATION IF THE REQUEST IS FOR AN INSURED WITH A MEDICAL  CONDI-
 TION  THAT  PLACES THE HEALTH OF THE INSURED IN SERIOUS JEOPARDY WITHOUT
 THE HEALTH CARE  SERVICES  RECOMMENDED  BY  THE  INSURED'S  HEALTH  CARE
 PROVIDER.    To the extent practicable, such written notification to the
 enrollee's health care provider shall be transmitted electronically,  in

 S. 7872                             3
 
 a  manner  and  in  a form agreed upon by the parties.  The notification
 shall identify: (i) whether the services are  considered  in-network  or
 out-of-network;  (ii)  whether the insured will be held harmless for the
 services and not be responsible for any payment, other than any applica-
 ble  co-payment,  co-insurance  or  deductible; (iii) as applicable, the
 dollar amount the health care plan will pay if the  service  is  out-of-
 network;  and  (iv) as applicable, information explaining how an insured
 may determine the  anticipated  out-of-pocket  cost  for  out-of-network
 health  care  services in a geographical area or zip code based upon the
 difference between what the health care plan will reimburse for  out-of-
 network  health  care services and the usual and customary cost for out-
 of-network health care services.  AN APPROVAL OF REQUEST FOR PRE-AUTHOR-
 IZATION SHALL BE VALID FOR THE DURATION OF THE PRESCRIPTION OR TREATMENT
 REQUESTED FOR PRE-AUTHORIZATION.
   § 6. The insurance law is amended by adding a new section 4909 to read
 as follows:
   § 4909. PRESCRIPTION DRUG FORMULARY CHANGES. (A) A  HEALTH  CARE  PLAN
 REQUIRED  TO  PROVIDE  ESSENTIAL  HEALTH  BENEFITS  SHALL NOT, EXCEPT AS
 OTHERWISE  PROVIDED  IN  SUBSECTION  (B)  OF  THIS  SECTION,  REMOVE   A
 PRESCRIPTION DRUG FROM A FORMULARY:
   (I)  IF THE FORMULARY INCLUDES TWO OR MORE TIERS OF BENEFITS PROVIDING
 FOR DIFFERENT DEDUCTIBLES, COPAYMENTS OR COINSURANCE APPLICABLE  TO  THE
 PRESCRIPTION  DRUGS  IN  EACH  TIER, MOVE A DRUG TO A TIER WITH A LARGER
 DEDUCTIBLE, COPAYMENT OR COINSURANCE, OR
   (II) ADD UTILIZATION MANAGEMENT  RESTRICTIONS  TO  A  FORMULARY  DRUG,
 UNLESS  SUCH  CHANGES  OCCUR  AT  THE  TIME OF ENROLLMENT OR ISSUANCE OF
 COVERAGE.  SUCH PROHIBITION SHALL APPLY BEGINNING ON THE DATE  ON  WHICH
 OPEN  ENROLLMENT  BEGINS FOR A PLAN YEAR AND THROUGH THE END OF THE PLAN
 YEAR TO WHICH SUCH OPEN ENROLLMENT PERIOD APPLIES.
   (B) (I) A HEALTH CARE PLAN WITH A FORMULARY THAT INCLUDES TWO OR  MORE
 TIERS  OF  BENEFITS  PROVIDING  FOR DIFFERENT DEDUCTIBLES, COPAYMENTS OR
 COINSURANCE APPLICABLE TO PRESCRIPTION DRUGS IN EACH  TIER  MAY  MOVE  A
 PRESCRIPTION  DRUG TO A TIER WITH A LARGER DEDUCIBLE, COPAYMENT OR COIN-
 SURANCE IF AN AB-RATED GENERIC DRUG FOR SUCH PRESCRIPTION DRUG IS  ADDED
 TO THE FORMULARY AT THE SAME TIME.
   (II)  A  HEALTH CARE PLAN MAY REMOVE A PRESCRIPTION DRUG FROM A FORMU-
 LARY IF THE FEDERAL FOOD AND DRUG ADMINISTRATION  DETERMINES  THAT  SUCH
 DRUG SHOULD BE REMOVED FROM THE MARKET.
   §  7. Subsection (a) of section 3238 of the insurance law, as added by
 chapter 451 of the laws of 2007, is amended to read as follows:
   (a) An insurer, corporation organized pursuant to article  forty-three
 of  this  chapter,  municipal cooperative health benefits plan certified
 pursuant to article forty-seven of this chapter, or  health  maintenance
 organization  and  other  organizations  certified  pursuant  to article
 forty-four of the public health law ("health plan") shall pay claims for
 a health care service for which a pre-authorization was required by, and
 received from, the health plan prior to the  rendering  of  such  health
 care  service,  AND  ELIGIBILITY  CONFIRMED  ON  THE DAY OF THE SERVICE,
 unless:
   (1) [(i) the insured, subscriber, or enrollee was not a covered person
 at the time the health care service was rendered.
   (ii) Notwithstanding the provisions of subparagraph (i) of this  para-
 graph,  a  health  plan  shall  not  deny  a  claim on this basis if the
 insured's, subscriber's or enrollee's coverage was retroactively  termi-
 nated  more  than  one  hundred twenty days after the date of the health
 care service, provided that the claim is submitted  within  ninety  days

 S. 7872                             4

 after  the  date  of  the health care service. If the claim is submitted
 more than ninety days after the date of the  health  care  service,  the
 health  plan  shall have thirty days after the claim is received to deny
 the  claim on the basis that the insured, subscriber or enrollee was not
 a covered person on the date of the health care service.
   (2)] the submission of the claim with respect to an insured, subscrib-
 er or enrollee was not timely under the terms of the applicable provider
 contract, if the claim is submitted by a  provider,  or  the  policy  or
 contract, if the claim is submitted by the insured, subscriber or enrol-
 lee;
   [(3)]  (2)  at the time the pre-authorization was issued, the insured,
 subscriber or enrollee had not  exhausted  contract  or  policy  benefit
 limitations  based  on  information available to the health plan at such
 time, but subsequently exhausted contract or policy benefit  limitations
 after  authorization was issued; provided, however, that the health plan
 shall include in  the  notice  of  determination  required  pursuant  to
 subsection (b) of section four thousand nine hundred three of this chap-
 ter  and  subdivision  two  of  section  forty-nine hundred three of the
 public health law that the visits authorized might exceed the limits  of
 the  contract  or  policy and accordingly would not be covered under the
 contract or policy;
   [(4)] (3) the pre-authorization was based on materially inaccurate  or
 incomplete  information provided by the insured, subscriber or enrollee,
 the designee of the insured, subscriber or enrollee, or the health  care
 provider  such  that  if  the  correct  or complete information had been
 provided, such pre-authorization would not have been granted; OR
   [(5) the pre-authorized service was related to a  pre-existing  condi-
 tion that was excluded from coverage; or
   (6)] (4) there is a reasonable basis supported by specific information
 available  for review by the superintendent that the insured, subscriber
 or enrollee, the designee of the insured, subscriber or enrollee, or the
 health care provider has engaged in fraud or abuse.
   § 8. This act shall take effect on the ninetieth day  after  it  shall
 have become a law.

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