Florida Senate - 2020 SB 696 By Senator Mayfield 17-00130I-20 2020696__ 1 A bill to be entitled 2 An act relating to prescription drug coverage; 3 creating s. 627.42394, F.S.; requiring individual and 4 group health insurers to provide notice of 5 prescription drug formulary changes to current and 6 prospective insureds and the insureds’ treating 7 physicians; specifying the timeframe and manner in 8 which such notice must be provided; specifying 9 requirements for a notice of medical necessity 10 submitted by the treating physician; authorizing 11 insurers to provide certain means for submitting the 12 notice of medical necessity; requiring the Financial 13 Services Commission to adopt a certain form by rule by 14 a specified date; specifying a coverage requirement 15 and restrictions on coverage modification by insurers 16 receiving such notice; providing construction and 17 applicability; requiring insurers to maintain a record 18 of formulary changes; requiring insurers to annually 19 submit a specified report to the Office of Insurance 20 Regulation; requiring the office to annually compile 21 certain data, prepare a report and make the report 22 publicly accessible on its website, and submit the 23 report to the Governor and the Legislature; creating 24 s. 627.6404, F.S.; requiring insurers to apply certain 25 reductions in out-of-pocket expenses for prescription 26 drugs toward an insured’s cost-sharing obligation; 27 creating s. 627.64742, F.S.; defining the term 28 “pharmacy benefit manager”; requiring pharmacy benefit 29 managers to annually file with the office a specified 30 report relating to payments collected from 31 pharmaceutical manufacturers; requiring the office to 32 publish such reports on its website within a certain 33 timeframe; authorizing the commission to adopt rules; 34 amending s. 627.6699, F.S.; requiring small employer 35 carriers to comply with certain requirements for 36 prescription drug formulary changes; amending s. 37 641.31, F.S.; requiring health maintenance 38 organizations to provide notice of prescription drug 39 formulary changes to current and prospective 40 subscribers and the subscribers’ treating physicians; 41 specifying the timeframe and manner in which such 42 notice must be provided; specifying requirements for a 43 notice of medical necessity submitted by the treating 44 physician; authorizing health maintenance 45 organizations to provide certain means for submitting 46 the notice of medical necessity; requiring the 47 commission to adopt a certain form by rule by a 48 specified date; specifying a coverage requirement and 49 restrictions on coverage modification by health 50 maintenance organizations receiving such notice; 51 providing construction and applicability; requiring 52 health maintenance organizations to maintain a record 53 of formulary changes; requiring health maintenance 54 organizations to annually submit a specified report to 55 the office; requiring the office to annually compile 56 certain data, prepare a report and make the report 57 publicly accessible on its website, and submit the 58 report to the Governor and the Legislature; creating 59 s. 641.3157, F.S.; requiring health maintenance 60 organizations to apply certain reductions in out-of 61 pocket expenses for prescription drugs toward a 62 subscriber’s cost-sharing obligation; providing 63 applicability; providing a declaration of important 64 state interest; providing an effective date. 65 66 Be It Enacted by the Legislature of the State of Florida: 67 68 Section 1. Section 627.42394, Florida Statutes, is created 69 to read: 70 627.42394 Health insurance policies; changes to 71 prescription drug formularies; requirements.— 72 (1) At least 60 days before the effective date of any 73 change to a prescription drug formulary during a policy year, an 74 insurer issuing individual or group health insurance policies in 75 this state shall: 76 (a) Provide notification of the change in the formulary to 77 current and prospective insureds in a readily accessible format 78 on the insurer’s website; and 79 (b) Notify, electronically and by first-class mail, any 80 insured currently receiving coverage for a prescription drug for 81 which the formulary change modifies coverage and the insured’s 82 treating physician, including information on the specific drugs 83 involved and a statement that the submission of a notice of 84 medical necessity by the insured’s treating physician to the 85 insurer at least 30 days before the effective date of the 86 formulary change will result in continuation of coverage at the 87 existing level. 88 (2) The notice provided by the treating physician to the 89 insurer must include a completed one-page form in which the 90 treating physician certifies to the insurer that the 91 prescription drug for the insured is medically necessary as 92 defined under s. 627.732(2). The treating physician shall submit 93 the notice electronically or by first-class mail. The insurer 94 may provide the treating physician with access to an electronic 95 portal through which the treating physician may electronically 96 submit the notice. By January 1, 2021, the commission shall 97 adopt by rule a form for the notice. 98 (3) If the treating physician certifies to the insurer in 99 accordance with subsection (2) that the prescription drug is 100 medically necessary for the insured, the insurer: 101 (a) Must authorize coverage for the prescribed drug until 102 the end of the policy year, based solely on the treating 103 physician’s certification that the drug is medically necessary; 104 and 105 (b) May not modify the coverage related to the covered drug 106 during the policy year by: 107 1. Increasing the out-of-pocket costs for the covered drug; 108 2. Moving the covered drug to a more restrictive tier; 109 3. Denying an insured coverage of the drug for which the 110 insured has been previously approved for coverage by the 111 insurer; or 112 4. Limiting or reducing coverage of the drug in any other 113 way, including subjecting it to a new prior authorization or 114 step therapy requirement. 115 (4) Subsections (1), (2), and (3) do not: 116 (a) Prohibit the addition of prescription drugs to the list 117 of drugs covered under the policy during the policy year. 118 (b) Apply to a grandfathered health plan as defined in s. 119 627.402 or to benefits specified in s. 627.6513(1)-(14). 120 (c) Alter or amend s. 465.025, which provides conditions 121 under which a pharmacist may substitute a generically equivalent 122 drug product for a brand name drug product. 123 (d) Alter or amend s. 465.0252, which provides conditions 124 under which a pharmacist may dispense a substitute biological 125 product for the prescribed biological product. 126 (e) Apply to a Medicaid managed care plan under part IV of 127 chapter 409. 128 (5) A health insurer shall maintain a record of any change 129 in its formulary during a calendar year. By March 1 annually, a 130 health insurer shall submit to the office a report delineating 131 such changes made in the previous calendar year. The annual 132 report must include, at a minimum: 133 (a) A list of all drugs that were removed from the 134 formulary and the reasons for the removal; 135 (b) A list of all drugs that were moved to a tier resulting 136 in additional out-of-pocket costs to insureds; 137 (c) The number of insureds notified by the insurer of a 138 change in the formulary; and 139 (d) The increased cost, by dollar amount, incurred by 140 insureds because of such change in the formulary. 141 (6) By May 1 annually, the office shall: 142 (a) Compile the data in such annual reports submitted by 143 health insurers and prepare a report summarizing the data 144 submitted; 145 (b) Make the report publicly accessible on its website; and 146 (c) Submit the report to the Governor, the President of the 147 Senate, and the Speaker of the House of Representatives. 148 Section 2. Section 627.6404, Florida Statutes, is created 149 to read: 150 627.6404 Application of reductions to insured cost-sharing 151 obligations.—An insurer shall apply any third-party payment, 152 financial assistance, discount, patient voucher, or other 153 reduction in out-of-pocket expenses made by or on behalf of an 154 insured for prescription drugs toward the insured’s deductible, 155 copay, cost-sharing responsibility, or out-of-pocket maximum 156 associated with the insured’s policy. 157 Section 3. Section 627.64742, Florida Statutes, is created 158 to read: 159 627.64742 Pharmacy benefit manager annual reporting.— 160 (1) As used in this section, the term “pharmacy benefit 161 manager” has the same meaning as provided in s. 627.64741(1). By 162 March 1, 2021, and every March 1 thereafter, each pharmacy 163 benefit manager shall file a report with the office. The report 164 must contain the following information for the immediately 165 preceding calendar year: 166 (a) The aggregated dollar amount of rebates, fees, price 167 protection payments, and other payments collected from 168 pharmaceutical manufacturers; 169 (b) The aggregated dollar amount of rebates, fees, price 170 protection payments, and other payments collected from 171 pharmaceutical manufacturers which was passed to health insurers 172 or health maintenance organizations authorized under chapter 173 624; and 174 (c) The aggregated dollar amount of rebates, fees, price 175 protection payments, and other payments collected from 176 pharmaceutical manufacturers which was passed to insureds at the 177 point of sale. 178 (2) The office shall publish on its website the reports 179 received under subsection (1) within 60 days after receipt. 180 (3) The commission may adopt rules to administer this 181 section. 182 Section 4. Paragraph (e) of subsection (5) of section 183 627.6699, Florida Statutes, is amended to read: 184 627.6699 Employee Health Care Access Act.— 185 (5) AVAILABILITY OF COVERAGE.— 186 (e) All health benefit plans issued under this section must 187 comply with the following conditions: 188 1. For employers who have fewer than two employees, a late 189 enrollee may be excluded from coverage for no longer than 24 190 months if he or she was not covered by creditable coverage 191 continually to a date not more than 63 days before the effective 192 date of his or her new coverage. 193 2. Any requirement used by a small employer carrier in 194 determining whether to provide coverage to a small employer 195 group, including requirements for minimum participation of 196 eligible employees and minimum employer contributions, must be 197 applied uniformly among all small employer groups having the 198 same number of eligible employees applying for coverage or 199 receiving coverage from the small employer carrier, except that 200 a small employer carrier that participates in, administers, or 201 issues health benefits pursuant to s. 381.0406 which do not 202 include a preexisting condition exclusion may require as a 203 condition of offering such benefits that the employer has had no 204 health insurance coverage for its employees for a period of at 205 least 6 months. A small employer carrier may vary application of 206 minimum participation requirements and minimum employer 207 contribution requirements only by the size of the small employer 208 group. 209 3. In applying minimum participation requirements with 210 respect to a small employer, a small employer carrier shall not 211 consider as an eligible employee employees or dependents who 212 have qualifying existing coverage in an employer-based group 213 insurance plan or an ERISA qualified self-insurance plan in 214 determining whether the applicable percentage of participation 215 is met. However, a small employer carrier may count eligible 216 employees and dependents who have coverage under another health 217 plan that is sponsored by that employer. 218 4. A small employer carrier shall not increase any 219 requirement for minimum employee participation or any 220 requirement for minimum employer contribution applicable to a 221 small employer at any time after the small employer has been 222 accepted for coverage, unless the employer size has changed, in 223 which case the small employer carrier may apply the requirements 224 that are applicable to the new group size. 225 5. If a small employer carrier offers coverage to a small 226 employer, it must offer coverage to all the small employer’s 227 eligible employees and their dependents. A small employer 228 carrier may not offer coverage limited to certain persons in a 229 group or to part of a group, except with respect to late 230 enrollees. 231 6. A small employer carrier may not modify any health 232 benefit plan issued to a small employer with respect to a small 233 employer or any eligible employee or dependent through riders, 234 endorsements, or otherwise to restrict or exclude coverage for 235 certain diseases or medical conditions otherwise covered by the 236 health benefit plan. 237 7. An initial enrollment period of at least 30 days must be 238 provided. An annual 30-day open enrollment period must be 239 offered to each small employer’s eligible employees and their 240 dependents. A small employer carrier must provide special 241 enrollment periods as required by s. 627.65615. 242 8. A small employer carrier shall comply with s. 627.42394 243 for any change to a prescription drug formulary. 244 Section 5. Subsection (36) of section 641.31, Florida 245 Statutes, is amended to read: 246 641.31 Health maintenance contracts.— 247 (36) Except as provided in paragraphs (a), (b), and (c), a 248 health maintenance organization may increase the copayment for 249 any benefit, or delete, amend, or limit any of the benefits to 250 which a subscriber is entitled under the group contract only, 251 upon written notice to the contract holder at least 45 days in 252 advance of the time of coverage renewal. The health maintenance 253 organization may amend the contract with the contract holder, 254 with such amendment to be effective immediately at the time of 255 coverage renewal. The written notice to the contract holder must 256
shallspecifically identify any deletions, amendments, or 257 limitations to any of the benefits provided in the group 258 contract during the current contract period which will be 259 included in the group contract upon renewal. This subsection 260 does not apply to any increases in benefits. The 45-day notice 261 requirement does shallnot apply if benefits are amended, 262 deleted, or limited at the request of the contract holder. 263 (a) At least 60 days before the effective date of any 264 change to a prescription drug formulary during a contract year, 265 a health maintenance organization shall: 266 1. Provide notification of the change in the formulary to 267 current and prospective subscribers in a readily accessible 268 format on the health maintenance organization’s website; and 269 2. Notify, electronically and by first-class mail, any 270 subscriber currently receiving coverage for a prescription drug 271 for which the formulary change modifies coverage and the 272 subscriber’s treating physician, including information on the 273 specific drugs involved and a statement that the submission of a 274 notice of medical necessity by the subscriber’s treating 275 physician to the health maintenance organization at least 30 276 days before the effective date of the formulary change will 277 result in continuation of coverage at the existing level. 278 (b) The notice provided by the treating physician to the 279 health maintenance organization must include a completed one 280 page form in which the treating physician certifies to the 281 health maintenance organization that the prescription drug for 282 the subscriber is medically necessary as defined under s. 283 627.732(2). The treating physician shall submit the notice 284 electronically or by first-class mail. The health maintenance 285 organization may provide the treating physician with access to 286 an electronic portal through which the treating physician may 287 electronically submit the notice. By January 1, 2021, the 288 commission shall adopt by rule a form for the notice. 289 (c) If the treating physician certifies to the health 290 maintenance organization in accordance with paragraph (b) that 291 the prescription drug is medically necessary for the subscriber, 292 the health maintenance organization: 293 1. Must authorize coverage for the prescribed drug until 294 the end of the contract year, based solely on the treating 295 physician’s certification that the drug is medically necessary; 296 and 297 2. May not modify the coverage related to the covered drug 298 during the contract year by: 299 a. Increasing the out-of-pocket costs for the covered drug; 300 b. Moving the covered drug to a more restrictive tier; 301 c. Denying a subscriber coverage of the drug for which the 302 subscriber has been previously approved for coverage by the 303 health maintenance organization; or 304 d. Limiting or reducing coverage of the drug in any other 305 way, including subjecting it to a new prior authorization or 306 step therapy requirement. 307 (d) Paragraphs (a), (b), and (c) do not: 308 1. Prohibit the addition of prescription drugs to the list 309 of drugs covered under the contract during the contract year. 310 2. Apply to a grandfathered health plan as defined in s. 311 627.402 or to benefits specified in s. 627.6513(1)-(14). 312 3. Alter or amend s. 465.025, which provides conditions 313 under which a pharmacist may substitute a generically equivalent 314 drug product for a brand name drug product. 315 4. Alter or amend s. 465.0252, which provides conditions 316 under which a pharmacist may dispense a substitute biological 317 product for the prescribed biological product. 318 5. Apply to a Medicaid managed care plan under part IV of 319 chapter 409. 320 (e) A health maintenance organization shall maintain a 321 record of any change in its formulary during a calendar year. By 322 March 1 annually, a health maintenance organization shall submit 323 to the office a report delineating such changes made in the 324 previous calendar year. The annual report must include, at a 325 minimum: 326 1. A list of all drugs that were removed from the formulary 327 and the reasons for the removal; 328 2. A list of all drugs that were moved to a tier resulting 329 in additional out-of-pocket costs to subscribers; 330 3. The number of subscribers notified by the health 331 maintenance organization of a change in the formulary; and 332 4. The increased cost, by dollar amount, incurred by 333 subscribers because of such change in the formulary. 334 (f) By May 1 annually, the office shall: 335 1. Compile the data in such annual reports submitted by 336 health maintenance organizations and prepare a report 337 summarizing the data submitted; 338 2. Make the report publicly accessible on its website; and 339 3. Submit the report to the Governor, the President of the 340 Senate, and the Speaker of the House of Representatives. 341 Section 6. Section 641.3157, Florida Statutes, is created 342 to read: 343 641.3157 Application of reductions to subscriber cost 344 sharing obligations.—A health maintenance organization shall 345 apply any third-party payment, financial assistance, discount, 346 patient voucher, or other reduction in out-of-pocket expenses 347 made by or on behalf of a subscriber for prescription drugs 348 toward a subscriber’s deductible, copay, cost-sharing 349 responsibility, or out-of-pocket maximum associated with the 350 subscriber’s health maintenance contract. 351 Section 7. This act applies to health insurance policies, 352 health benefit plans, and health maintenance contracts entered 353 into or renewed on or after January 1, 2021. 354 Section 8. The Legislature finds that this act fulfills an 355 important state interest. 356 Section 9. This act shall take effect July 1, 2020.