S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3038
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 28, 2019
                                ___________
 
 Introduced by M. of A. GOTTFRIED, WOERNER, TAYLOR, SANTABARBARA, LIFTON,
   SOLAGES, CROUCH, BARRON, COLTON, BUCHWALD, D'URSO, LUPARDO, MONTESANO,
   MOSLEY,  ENGLEBRIGHT  --  read  once  and referred to the Committee on
   Insurance
 
 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 A  TYPICAL  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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD03798-02-9

 A. 3038                             2
 
 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
 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 A TYPICAL 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-

 A. 3038                             3
 
 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
 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.

 A. 3038                             4

   (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
 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.