WSR 12-14-116

PROPOSED RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2012-03 -- Filed July 5, 2012, 11:21 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 12-05-057.

Title of Rule and Other Identifying Information: Prescription drug benefit standards.

Hearing Location(s): Columbia Room, Legislature [Legislative] Building, Capitol Campus, Olympia, WA 98504, on August 7, 2012, at 10:00 a.m.

Date of Intended Adoption: August 7, 2012.

Submit Written Comments to: Meg Jones, P.O. Box 40258, Olympia, WA 98504, (360) 725-7170, e-mail megj@oic.wa.gov, fax (360) 586-3109, by August 6, 2012.

Assistance for Persons with Disabilities: Contact Lorrie [Lorie] Villaflores by August 6, 2012, TTY (360) 586-0241 or (360) 725-7087.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposal explains the standards applied by the commissioner when reviewing a plan's prescription drug benefit. There are no proposed changes to existing rules.

Reasons Supporting Proposal: Prescription drug coverage, when offered, provides important treatment for covered persons under an individual or small group plan. If a covered person is diagnosed with a medical condition that a prescription helps to treat, the policy or plan should not unreasonably restrict the enrollee's ability to receive the medication through the prescription drug benefit. Otherwise, the prescription benefit does not provide the coverage that the covered person thought they were purchasing.


A covered person with a condition for which they enroll in a clinical trial often has many aspects of care, including some prescriptions, paid for by the clinical trial program. When a policy or plan covers that care in one setting, it is unreasonable for the policy or plan to restrict coverage of that care, including coverage for prescription drugs that are not the subject of the clinical trial, when it is delivered while the person is enrolled in a clinical trial.
Cost-containment strategies should not unreasonably interfere with a patient's treatment. If a generic drug doesn't work for a patient, a policy or plan should not restrict the patient's ability to receive coverage for the right drug because it is not in the formulary or is not a generic drug.
Complaints received about how the oral anticancer medication parity requirement, effective January 1, 2012, was implemented by carriers indicates that carriers need further guidance in order to apply the law. The rules seek to provide this guidance.
Enrollees rely on the information they receive when planning their health care with their provider. Knowing what drugs are covered by a plan facilitates this planning. These rules propose that carriers must notify enrollees of formulary changes, and keep the public information about the formulary current.

Statutory Authority for Adoption: RCW 48.02.060, 48.02.062, 48.18.140, 48.43.525, 48.44.050, 48.44.440(2), 48.44.460(2), 48.46.200, 48.46.510.

Statute Being Implemented: RCW 48.18.110, 48.20.389, 48.20.391, 48.20.525, 48.20.580, 48.21.143, 48.21.223, 48.21.325, 48.21.241, 48.44.020(2), 48.44.315, 48.44.323, 48.44.341, 48.44.440, 48.44.465, 48.46.060, 48.46.066, 48.46.272, 48.46.274, 48.46.291, 48.46.510, 48.46.535.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Office of the insurance commissioner, governmental.

Name of Agency Personnel Responsible for Drafting: Meg Jones, Insurance Building, P.O. Box 40258, Olympia, WA, (360) 725-7170; Implementation: Beth Berendt, 5000 Capitol Boulevard South, Tumwater, WA, (360) 725-7117; and Enforcement: Carol Sureau, 5000 Capitol Boulevard South, Tumwater, WA, (360) 725-7050.

No small business economic impact statement has been prepared under chapter 19.85 RCW. None of the entities subject to this regulation qualify as small businesses under chapter 19.85 RCW.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Meg Jones, P.O. Box 40258, Olympia, WA 98504, (360) 725-7170, e-mail megj@oic.wa.gov, fax (360) 586-3109.

July 5, 2012

Mike Kreidler

Insurance Commissioner

OTS-4785.6


NEW SECTION
WAC 284-43-816   General prescription drug benefit requirements.   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 preexisting 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.

[]


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 subsection (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 an enrollee's access to nonformulary 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 an enrollee'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.

[]


NEW SECTION
WAC 284-43-818   Formulary changes.   A carrier is not required to use a formulary as part of its prescription drug benefit design. If a formulary is used, a carrier must, at a minimum, comply with these requirements when a formulary change occurs.

(1) In addition to the requirements set forth in WAC 284-30-450, a carrier must not exclude or remove a medication from its formulary if the medication is the sole prescription medication option available to treat a disease or condition for which the health benefit plan, policy or agreement otherwise provides coverage, unless the medication or drug is removed because the drug or medication becomes available over-the-counter, or for documented medical risk to patient health.

(2) A carrier must continue to cover a drug that is removed from the carrier's formulary for the time period required for an enrollee who is taking the medication at the time of the formulary change to use a carrier's substitution process to request continuation of coverage for the removed medication, and receive a decision through that process, unless the formulary change is based on:

(a) Patient safety requires swifter replacement;

(b) Withdrawal of the drug from the market;

(c) Availability of the drug over-the-counter; or

(d) The issue of black box warnings by the Federal Drug Administration.

(3) Formularies posted on a carrier or a carrier's contracted pharmacy benefit manager web site must be current. Unless the removal is done on an emergency basis, formulary changes must be posted thirty days before the effective date of the change. In the case of an emergency removal, the change must be posted as soon as practicable, without unreasonable delay.

[]


NEW SECTION
WAC 284-43-819   Cost-sharing for prescription drugs.   (1) A carrier and health plan unreasonably restrict the treatment of patients if an ancillary charge, in addition to the plan's normal copayment or coinsurance requirements, is imposed for a drug that is covered because of one of the circumstances set forth in either WAC 284-43-817 or 284-43-818. An ancillary charge means any payment required by a carrier that is in addition to or excess of cost-sharing explained in the policy or contract form as approved by the commissioner. Cost-sharing means amounts paid directly to a provider or pharmacy by an enrollee for services received under the health benefit plan, and includes copayment, coinsurance, or deductible amounts.

(2) When an enrollee requests a brand name drug or a drug from a higher tier within a tiered formulary and there is not a documented clinical basis for the substitution, a carrier may require the enrollee to pay for the difference in price between the drug that the formulary would have required, and the covered drug, in addition to the copayment. This charge must reflect the actual cost difference, and must not contribute to the carrier's underwriting gain for the plan.

(3) When a carrier approves a substitution drug, whether or not the drug is in the carrier's formulary, the enrollee's cost-sharing for the substitution drug must be adjusted to reflect any discount agreements or other pricing adjustments for the drug that are available to a carrier. Any charge to the enrollee for a substitution drug must not contribute to the carrier's underwriting gain for the plan.

(4) If a carrier uses a tiered formulary in its prescription drug benefit design, and a substitute drug that is in the formulary is required based on one of the circumstances in either WAC 284-43-817 or 284-43-818, the enrollee's cost sharing may be based on the tier in which the carrier has placed the substitute drug.

[]


NEW SECTION
WAC 284-43-825   Prescription drug benefit disclosures.   (1) A carrier must include the following information in the certificate of coverage issued for a health benefit plan, policy or agreement that includes a prescription drug benefit:

(a) A clear statement explaining that the health benefit plan, policy or agreement may cover brand name drugs or medication under the circumstances set forth in WAC 284-43-817 or 284-43-818, including, if a formulary is part of the benefit design, brand name drugs or other medication not in the formulary.

(b) A clear explanation of the substitution process that the enrollee or their provider must use to seek coverage of a prescription drug or medication that is not in the formulary or is not the carrier's preferred drug or medication for the covered medical condition.

(2) When a carrier eliminates a previously covered drug from its formulary, or establishes new limitations on coverage of the drug or medication, as soon as is practicable, at a minimum a carrier must ensure that prior notice of the change will be provided to covered enrollees using the drug. Electronic mail notice, provided the enrollee agrees to receive electronic notice and such agreement has not been withdrawn, or written notice by first class mail at the last known address of the enrollee are acceptable methods of notice. If neither of these notice methods is available because the carrier lacks contact information for enrollees, a carrier may post notice on its web site or at another location that may be appropriate, so long as the posting is done in a manner that is reasonably calculated to reach and be noticed by affected enrollees.

(3) A carrier and health plan may use provider and enrollee education to promote the use of therapeutically equivalent generic drugs. The materials must not mislead an enrollee about the difference between biosimilar or bioequivalent, and therapeutically equivalent, generic medications.

[]


NEW SECTION
WAC 284-43-840   Anticancer medication.   A carrier and health plan must cover prescribed, self-administered anticancer medication that is used to kill or slow the growth of cancerous cells on at least a comparable basis to the plan's coverage for the delivery of cancer chemotherapy medications administered in a clinical or medical setting.

(1) A carrier may not impose dollar limits, copayments, deductibles or coinsurance requirements on coverage for orally administered anticancer drugs or chemotherapy that are less favorable to an insured or enrollee than the dollar limits, copayments, deductibles or coinsurance requirements that apply to coverage for anticancer medication or chemotherapy that is administered intravenously or by injection.

(2) A carrier may not reclassify an anticancer medication or increase an enrollee's out-of-pocket costs as a method of compliance with the requirements of this section.

[]


NEW SECTION
WAC 284-43-850   Clinical trials.   A carrier must cover routine patient costs in clinical trials for all items and services consistent with the coverage provided in the plan or coverage that is typically covered for an enrollee who is not enrolled in a clinical trial. This includes the cost of prescription medication used for the direct clinical management of the enrollee, unless the trial is for the investigation of the prescription medication or the medication is typically provided by the research sponsors free of charge for any enrollee in the trial. The requirement does not apply to a service that is clearly inconsistent with widely accepted and established standards of care for a particular diagnosis, or for items and services provided solely to satisfy data collection and analysis needs and that are not used in the direct clinical management of the enrollee.

Clinical trial means a phase I, phase II, phase III, or phase IV clinical trial that is conducted in relation to the prevention, detection, or treatment of cancer or other life-threatening disease or condition, funded or approved by:

(1) One of the National Institutes of Health (NIH);

(2) An NIH cooperative group or center which is a formal network of facilities that collaborate on research projects and have an established NIH-approval peer review program operating within the group including, but not limited to, the NCI Clinical Cooperative Group and the NCI Community Clinical Oncology Program;

(3) The federal Departments of Veterans Affairs or Defense;

(4) An institutional review board of an institution in this state that has a multiple project assurance contract approval by the Office of Protection for the Research Risks of the NIH; and

(5) A qualified research entity that meets the criteria for NIH Center Support Grant eligibility.

[]

Washington State Code Reviser's Office