California Assembly Bill AB2779 Latest Draft

 BILL NUMBER: AB 2779AMENDED BILL TEXT AMENDED IN SENATE AUGUST 20, 2010 AMENDED IN SENATE AUGUST 11, 2010 AMENDED IN SENATE JULY 15, 2010 AMENDED IN SENATE JUNE 22, 2010 AMENDED IN ASSEMBLY APRIL 8, 2010 INTRODUCED BY Assembly Member Solorio MARCH 3, 2010 An act to add Section 5307.13 to the Labor Code, relating to workers' compensation, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 2779, as amended, Solorio. Workers' compensation:  compound medication.  compounded drugs.  Existing law establishes a workers' compensation system, administered by the Administrative Director of the Division of Workers' Compensation, to compensate an employee for injuries sustained in the course of his or her employment.  Existing law requires the administrative director, after public hearings, to adopt and revise periodically an official medical fee schedule that shall establish reasonable maximum fees paid for medical services, drugs and pharmacy services, health care facility fees, home health care, and all other treatment, care, services, and goods, other than physician services.   This bill would provide that, until the administrative director adopts a fee schedule governing compound medication, a compound medication shall be reimbursable only if there is prior authorization for it as medically necessary, as specified. The bill would authorize the administrative director to adopt regulations as necessary or convenient to implement the above-described provisions.   This bill would provide that under workers' compensation law, a compounded drug, as defined, dispensed on or after November 1, 2010, shall be reimbursable only if certain conditions, including the condition that all active ingredients in the compounded drug are ingredients in drug products that have been approved by the federal Food and Drug Administration and all other ingredients are listed by the United States Pharmacopeia, are satisfied.  This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee:  yes   no  . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 5307.13 is added to the Labor Code, to read:  5307.13. (a) Until the administrative director adopts a fee schedule consistent with the requirements of this section governing compound medication, a compound medication shall be reimbursable only if there is prior authorization for it as medically necessary pursuant to Section 4610 and the compound medication meets all of the following requirements: (1) All active ingredients in the compound medication are ingredients in drug products that have been approved by the federal Food and Drug Administration (FDA) or listed by the United States Pharmacopeia.   5307.13.   (a) A compounded drug shall be reimbursable only if all of the following conditions are satisfied:   (1) Before the compounded drug is dispensed, both of the following conditions are satisfied:   (A) The physician's request for authorization for the compounded drug has been submitted to the insurer or, if there is no insurer, to the employer, for prospective utilization review.   (B) The physician's request for authorization expressly identifies the recommended drug as a compounded drug.   (2) All active ingredients in the compounded drug are ingredients in drug products that have been approved by the federal Food and Drug Administration (FDA) and all other ingredients are listed by the United States Pharmacopeia.   (2)   (3)  The  compound medication   compounded drug  is not a copy  or substitute for   of  an available FDA-approved product.  (3)   (4)  FDA-approved alternatives to the  compound medication   compounded drug  have been tried with  documented  therapeutic failure or patient intolerance.  (b) If the insurer or employer has denied a request for authorization for a compounded drug for the same employee for the same injury pursuant to Section 4610, and if the denial has not been overturned and there has not been a documented material change in the employee's medical condition, subdivision (e) of Section 4610 shall not apply to utilization review of a subsequent request for authorization for the same or substantially identical compounded drug.   (b)   (c)  The maximum allowance for the  compound medication   compounded drug  shall not exceed the sum of the amounts that would be allowed for the ingredient costs and dispensing  fee   and compounding fees allowed  under regulations adopted pursuant to Section 5307.1.  No reimbursement shall be allowed for any ingredient that does not have a valid National Drug Code (NDC) and a corresponding unit price in the Medi-Cal database.   (c)   (d)  No fee shall be allowed for any  compound medication   compounded drug  unless the billing for that  compound medication   compounded drug  includes all information necessary for calculation of the fee pursuant to  this section   subdivision (c)  .  (d)   (e)  Nothing in this section shall be interpreted to authorize a nonphysician to reject, as medically unnecessary, an otherwise valid  unsolicited  prescription for a compounded  medication. To the extent applicable, Section 4610 shall apply to requests for authorization required under this section.   drug.   (e)   (f)  The administrative director may adopt regulations  as necessary or convenient  to implement this section.  (g) This section shall apply to any compounded drug dispensed on or after November 1, 2010.   (h) For purposes of this section, "compounded drug" shall have the meaning specified in regulations adopted by the California State Board of Pharmacy.  SEC. 2. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: Abusive billing practices for compounded drugs unreasonably inflate the cost of workers' compensation coverage for employers and insurers, and leave fewer dollars available for injured workers to receive in benefits. In order to stop these abusive practices at the earliest possible time, it is necessary for this act to take effect immediately.