WSR 12-14-053

EMERGENCY RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2012-18 -- Filed June 28, 2012, 1:58 p.m. , effective June 28, 2012, 1:58 p.m. ]


Effective Date of Rule: Immediately.

Purpose: Establish minimum standards for carrier prescription drug benefit design and administration for health plans, confirming notice of the commissioner's standards for approval of policy, contract and agreement forms for health benefit plans that include a prescription drug benefit.

Statutory Authority for Adoption: RCW 48.02.060, 48.18.140, 48.21.200, 48.44.050, 48.46.060.

Under RCW 34.05.350 the agency for good cause finds that immediate adoption, amendment, or repeal of a rule is necessary for the preservation of the public health, safety, or general welfare, and that observing the time requirements of notice and opportunity to comment upon adoption of a permanent rule would be contrary to the public interest.

Reasons for this Finding: Prescription drug benefits, when offered as part of a health plan, provide necessary treatment for medical conditions covered by the policy. Because some health carriers seek approval of a prescription drug benefit that covers only generic drugs, and does not provide enrollees with an avenue to request nongeneric, brand-name, or nonformulary drugs when there is not a therapeutically equivalent generic or formulary alternative, or for which the generic alternative is not efficacious based on an enrollee's clinical response, a generic-only drug benefit prevents an enrollee from being able to use their purchased health benefit plan to help pay for medically necessary medicine or drugs, unreasonably restricting their treatment. Therefore, the commissioner finds that if an enrollee buys a health benefit plan with a prescription drug benefit where the benefit strictly limits covered drugs to generic products, they are purchasing a plan that offers an illusory benefit. An emergency rule is necessary because some health carriers are continuing to apply a generic-only benefit in this way, and have not refiled their product for the commissioner's approval to correct the problem.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 2, Amended 0, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 2, Amended 0, Repealed 0.

Date Adopted: June 28, 2012.

Mike Kreidler

Insurance Commissioner


NEW SECTION

WAC 284-43-816   General prescription drug benefit requirements.   Effective August 1, 2012, a health carrier must not offer, renew, or issue a health benefit plan providing a prescription drug benefit, including a formulary, which the commissioner determines results or can reasonably be expected to result in an unreasonable restriction on the treatment of patients. A carrier may restrict prescription drug coverage based on contract or plan terms and conditions that otherwise limit coverage, such as a pre-existing condition waiting period, or medical necessity.

(1) A carrier must ensure that a prescription drug benefit covers prescribed drugs, medications or therapies that are the sole prescription available for a covered medical condition.

(2) A prescription drug benefit that only covers generic drugs constitutes an unreasonable restriction on the treatment of patients.

(3) Nothing in this chapter is intended to limit or deter the use of "Dispense as Written" prescriptions, subject to the terms and conditions of the health plan.

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NEW SECTION
WAC 284-43-817   Prescription drug benefit design   (1) A carrier may design its prescription drug benefit to include cost control measures, including requiring preferred drug substitution in a given therapeutic class, if the restriction is for a less expensive, equally therapeutic alternative generic product available to treat the condition.

(2) A carrier may include elements in its prescription drug benefit design that, where clinically feasible, create incentives for the use of generic drugs. Examples of permitted incentives include, but are not limited to, requiring step therapy, protocols requiring clinical documentation that a preferred or generic drug is not therapeutically efficacious for the enrollee, (sometimes referred to as a fail first protocol), establishing a preferred brand and nonpreferred brand formulary, or otherwise limiting the benefit to the use of a generic drug in lieu of brand name drugs, subject to a substitution process as set forth in (3) of this section.

(3) A carrier must establish a process that a provider and enrollee may use to request a substitution for a covered prescribed therapy, drug or medication. The process must not unreasonably restrict a patient's access to non-formulary or alternate medications for refractory conditions. Used in this context, "refractory" means "not responsive to treatment." A carrier's substitution process must not result in delay in treating a patient's emergency fill or urgent care needs, or expedited requests for authorization. Subject to the terms and conditions of the policy that otherwise limit coverage, the carrier must permit substitution of a covered generic drug or formulary drug if:

(a) An enrollee does not tolerate the covered generic or formulary drug; or

(b) An enrollee's provider determines that the covered generic or formulary drug is not therapeutically efficacious for an enrollee. A carrier may require the provider to submit specific clinical documentation as part of the substitution request; or

(c) The provider determines that a dosage is required for clinically efficacious treatment that differs from a carrier's formulary dosage limitation for the covered drug.

(4) A carrier may include a preauthorization requirement for its prescription drug benefit and its substitution process, based on accepted peer reviewed clinical studies, Federal Drug Administration black box warnings, the fact that the drug is available over the counter, objective and relevant clinical information about the enrollee's condition, specific medical necessity criteria, patient safety, or other criteria that meet an accepted, medically applicable standard of care.

(a) Neither the substitution process criteria nor the type or volume of documentation required to support a substitution request may be unreasonably burdensome to the enrollee or their provider.

(b) The substitution process must be administered consistently, and include a documented consultation with the prescribing provider prior to any decision.

(5) This section is effective August 1, 2012.

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Washington State Code Reviser's Office