HOUSE OF REPRESENTATIVES

H.B. NO.

2461

TWENTY-FIFTH LEGISLATURE, 2010

H.D. 2

STATE OF HAWAII

S.D. 2

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO INSURANCE.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


PART I

     SECTION 1.  The Hawaii Employer-Union Health Benefits Trust Fund (EUTF) recently implemented a reference-based pricing program as part of its prescription drug plan.  Reference-based pricing is a reimbursement process in which a ceiling price is set for medications that exhibit similar therapeutic benefits.  Under the reference-based pricing program, members are only offered one choice and must switch to this preferred drug or pay the full cost of the prescription to stay with their current medication.  Reference-based pricing has been implemented for three common disease states.

     The legislature finds that while the objective of reference-based pricing is to lower the costs of the plan sponsor or insurer, it can instead result in cost-shifting to the member or health plan, as well as the rationing of pharmacy care.  Although the concept of therapeutic equivalence of drugs in certain categories is sound, some patients may have an inadequate response or adverse reaction to the preferred medication.  This may result in complications with the patient and higher health costs overall.  A health plan that uses reference-based pricing must have robust clinical data to support the defined drug treatment categories, as well as basic communication platforms to establish medical exceptions that allow the ability to petition for the necessary medication based on medical justification of its use.

     The legislature further finds that while reference-based pricing programs are utilized in certain European countries, there are no jurisdictions in the United States that have had the programs in place for a substantial period of time.  Implemented utilization management programs similar to reference-based pricing have been shown to increase the rate of hospitalizations and emergency room visits.  Without sufficient data to support reference-based pricing in the United States, a thorough examination and review should be conducted to determine if there are any detrimental consequences before implementing a significant change.

     The purpose of this part is to place a moratorium on the reference-based pricing program currently in place in the EUTF prescription drug plan in order to conduct a comprehensive study of the program and the effects it has on EUTF members.

     SECTION 2.  The EUTF shall place a moratorium through June 30, 2012, on the reference-based pricing program currently in place in its prescription drug plan.  The EUTF board shall have thirty days from the effective date of this Act to comply with implementing the moratorium.

     SECTION 3.  During the moratorium, the EUTF shall conduct a comprehensive study on the feasibility and long-term effects of the reference-based pricing program currently in place in its prescription drug plan that includes but is not limited to issues related to the EUTF budget, the program's impact on the health of EUTF members, the processing time and administrative costs of permitting medical exceptions, the rate of change of total medical costs if the program is enacted, the quality of health care that EUTF members are receiving, and the cost savings under the program for EUTF members and the health plan.

     The EUTF shall submit a report of its findings to the legislature no later than twenty days prior to the convening of the regular session of 2012.

     SECTION 4.  For the purposes of this part, "referenced-based pricing" means a reimbursement method in which payors set a capped price for medications that exhibit similar therapeutic benefits for drugs within a specific therapeutic class.

PART II

     SECTION 5.  The department of health shall execute a budget neutral pilot program that explores the use of a mobile health van equipped with telecommunication services using managed care principles, to include the following:

     (1)  Unrestricted access to an individual's primary care physician;

     (2)  Access to specialist care as authorized by the individual's primary care physician; and

     (3)  The requirement that any documentation related to visits with physicians other than the primary care physician shall be provided to the primary care physician.

PART III

     SECTION 6.  Chapter 431, article 10A, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

     "§431:10A-    Prescription drug coverage; medically necessary; continuation of coverage.  Except for members of the Hawaii employer-union health benefits trust fund, if an insured's physician determines within six months of a change in insurer by the insured or a change in an insurer's prescription drug formulary or coverage policy, that it is in the best interest of the insured to continue to have coverage for a certain prescription medication that the physician determines to be life-saving, any insurer that issues a policy that offers coverage for prescription drug benefits shall continue coverage for that prescription medication under any policy entered into by the insured and the insurer on or after July 1, 2010.

     A medication shall be deemed life-saving if it is necessary to treat a chronic disease or illness, maintain the patient's life, or preserve the patient's health or quality of life to the extent that the patient would be unable to continue to perform necessary life activities such as work, school, self-care, or independent living to the same degree without the medication as with it.  Life-saving medication shall include but shall not be limited to:

     (1)  Anticancer drugs, including both oral and intravenous chemotherapy;

     (2)  Intravenous immune globulin therapy, also known as IVIG; and

     (3)  Pediatric prescriptions for children with chronic diseases or conditions.

     (b)  For the purposes of this section:

     "Coverage" means the benefits, costs, and requirements for patient access to medical products and services as enumerated in the written explanation of benefits document issued by the health insurance carrier.

     "Prescription drug benefits" means the prescription drug benefits as defined in the explanation of benefits document issued by the health insurance carrier that describes the cost, cost-sharing, and available medications, as well as any utilization management requirements that patients must meet in order to access the prescribed drug."

     SECTION 7.  Chapter 431, article 10A, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:

     "§431:10A-    Prescription drug coverage; medically necessary; continuation of coverage.  Except for members of the Hawaii employer-union health benefits trust fund, if an insured's physician determines within six months of a change in insurer by the insured or a change in an insurer's prescription drug formulary or coverage policy, that it is in the best interest of the insured to continue to have coverage for a certain prescription medication that the physician determines to be life-saving, any insurer that issues a policy that offers coverage for prescription drug benefits shall continue coverage for that prescription medication under any policy entered into by the insured and the insurer on or after July 1, 2010.

     A medication shall be deemed life-saving if it is necessary to treat a chronic disease or illness, maintain the patient's life, or preserve the patient's health or quality of life to the extent that the patient would be unable to continue to perform necessary life activities such as work, school, self-care, or independent living to the same degree without the medication as with it.  Life-saving medication shall include but shall not be limited to:

     (1)  Anticancer drugs, including both oral and intravenous chemotherapy;

     (2)  Intravenous immune globulin therapy, also known as IVIG; and

     (3)  Pediatric prescriptions for children with chronic diseases or conditions.

     (b)  For the purposes of this section:

     "Coverage" means the benefits, costs, and requirements for patient access to medical products and services as enumerated in the written explanation of benefits document issued by the health insurance carrier.

     "Prescription drug benefits" means the prescription drug benefits as defined in the explanation of benefits document issued by the health insurance carrier that describes the cost, cost-sharing, and available medications, as well as any utilization management requirements that patients must meet in order to access the prescribed drug."

     SECTION 8.  Chapter 432, article I, Hawaii Revised Statutes, is amended by adding a new section to part VI to be appropriately designated and to read as follows:

     "§432:1-    Prescription drug coverage; medically necessary; continuation of coverage.  Except for members of the Hawaii employer-union health benefits trust fund, if an insured's physician determines within six months of a change in insurer by the insured or a change in an insurer's prescription drug formulary or coverage policy, that it is in the best interest of the insured to continue to have coverage for a certain prescription medication that the physician determines to be life-saving, any insurer that issues a policy that offers coverage for prescription drug benefits shall continue coverage for that prescription medication under any policy entered into by the insured and the insurer on or after July 1, 2010.

     A medication shall be deemed life-saving if it is necessary to treat a chronic disease or illness, maintain the patient's life, or preserve the patient's health or quality of life to the extent that the patient would be unable to continue to perform necessary life activities such as work, school, self-care, or independent living to the same degree without the medication as with it.  Life-saving medication shall include but shall not be limited to:

     (1)  Anticancer drugs, including both oral and intravenous chemotherapy;

     (2)  Intravenous immune globulin therapy, also known as IVIG; and

     (3)  Pediatric prescriptions for children with chronic diseases or conditions.

     (b)  For the purposes of this section:

     "Coverage" means the benefits, costs, and requirements for patient access to medical products and services as enumerated in the written explanation of benefits document issued by the health insurance carrier.

     "Prescription drug benefits" means the prescription drug benefits as defined in the explanation of benefits document issued by the health insurance carrier that describes the cost, cost-sharing, and available medications, as well as any utilization management requirements that patients must meet in order to access the prescribed drug."

     SECTION 9.  Chapter 432, article II, Hawaii Revised Statutes, is amended by adding a new section to part IV to be appropriately designated and to read as follows:

     "§432:2-    Prescription drug coverage; medically necessary; continuation of coverage.  Except for members of the Hawaii employer-union health benefits trust fund, if an insured's physician determines within six months of a change in insurer by the insured or a change in an insurer's prescription drug formulary or coverage policy, that it is in the best interest of the insured to continue to have coverage for a certain prescription medication that the physician determines to be life-saving, any insurer that issues a policy that offers coverage for prescription drug benefits shall continue coverage for that prescription medication under any policy entered into by the insured and the insurer on or after July 1, 2010.

     A medication shall be deemed life-saving if it is necessary to treat a chronic disease or illness, maintain the patient's life, or preserve the patient's health or quality of life to the extent that the patient would be unable to continue to perform necessary life activities such as work, school, self-care, or independent living to the same degree without the medication as with it.  Life-saving medication shall include but shall not be limited to:

     (1)  Anticancer drugs, including both oral and intravenous chemotherapy;

     (2)  Intravenous immune globulin therapy, also known as IVIG; and

     (3)  Pediatric prescriptions for children with chronic diseases or conditions.

     (b)  For the purposes of this section:

     "Coverage" means the benefits, costs, and requirements for patient access to medical products and services as enumerated in the written explanation of benefits document issued by the health insurance carrier.

     "Prescription drug benefits" means the prescription drug benefits as defined in the explanation of benefits document issued by the health insurance carrier that describes the cost, cost-sharing, and available medications, as well as any utilization management requirements that patients must meet in order to access the prescribed drug."

     SECTION 10.  Chapter 432D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§432D-    Prescription drug coverage; medically necessary; continuation of coverage.  Except for members of the Hawaii employer-union health benefits trust fund, if an insured's physician determines within six months of a change in insurer by the insured or a change in an insurer's prescription drug formulary or coverage policy, that it is in the best interest of the insured to continue to have coverage for a certain prescription medication that the physician determines to be life-saving, any insurer that issues a policy that offers coverage for prescription drug benefits shall continue coverage for that prescription medication under any policy entered into by the insured and the insurer on or after July 1, 2010.

     A medication shall be deemed life-saving if it is necessary to treat a chronic disease or illness, maintain the patient's life, or preserve the patient's health or quality of life to the extent that the patient would be unable to continue to perform necessary life activities such as work, school, self-care, or independent living to the same degree without the medication as with it.  Life-saving medication shall include but shall not be limited to:

     (1)  Anticancer drugs, including both oral and intravenous chemotherapy;

     (2)  Intravenous immune globulin therapy, also known as IVIG; and

     (3)  Pediatric prescriptions for children with chronic diseases or conditions.

     (b)  For the purposes of this section:

     "Coverage" means the benefits, costs, and requirements for patient access to medical products and services as enumerated in the written explanation of benefits document issued by the health insurance carrier.

     "Prescription drug benefits" means the prescription drug benefits as defined in the explanation of benefits document issued by the health insurance carrier that describes the cost, cost-sharing, and available medications, as well as any utilization management requirements that patients must meet in order to access the prescribed drug."

     SECTION 11.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 12.  This Act shall take effect on July 1, 2050; provided that part I of this Act shall be repealed on June 30, 2012.



 

 

Report Title:

Reference-based Pricing; Prescription Drugs; Mobile Health Vans

 

Description:

Requires a moratorium on the existing reference-based pricing program for prescription drug plan members through June 30, 2012; requires a study on the feasibility and long-term effects of reference-based pricing programs; requires pilot program to explore the use of mobile health vans; and provides for continuing coverage of prescription medication under any policy entered into by an insured or insurer on or after July 1, 2010.  Effective 7/1/50.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.