Second Regular Session
Seventy-third General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 22-0251.01 Kristen Forrestal x4217
HOUSE BILL 22-1370
House Committees Senate Committees
Health & Insurance
A BILL FOR AN ACT
C
ONCERNING COVERAGE REQUIREMENTS FOR HEALTH -CARE101
PRODUCTS.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
Beginning in 2023, the bill requires each health insurance carrier
(carrier) that offers an individual or small group health benefit plan in this
state to offer at least 25% of its health benefit plans on the Colorado
health benefit exchange (exchange) and at least 25% of its plans not on
the exchange in each bronze, silver, gold, and platinum benefit level in
each service area as copayment-only payment structures for all
HOUSE SPONSORSHIP
Jodeh and Sirota, Amabile, Bacon, Bernett, Boesenecker, Caraveo, Cutter, Duran,
Froelich, Gonzales-Gutierrez, Gray, Hooton, Kennedy, Kipp, Lindsay, Michaelson Jenet,
Ortiz, Sullivan, Weissman, Will, Woodrow, Young
SENATE SPONSORSHIP
Winter and Buckner,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing statute.
Dashes through the words indicate deletions from existing statute. prescription drug cost tiers.
Starting in 2024, a carrier or, if a carrier uses a pharmacy benefit
manager (PBM) for claims processing services or other prescription drug
or device services under a health benefit plan offered by the carrier, the
PBM, or a representative of the carrier or the PBM, is prohibited from
modifying or applying a modification to the current prescription drug
formulary during the current plan year.
The bill repeals and reenacts the current requirements for step
therapy and requires a carrier to use clinical review criteria to establish
the step-therapy protocol.
For each health benefit plan issued or renewed on or after January
1, 2024, the bill requires each carrier or PBM to demonstrate to the
division of insurance that:
! 100% of the estimated rebates received or to be received in
connection with dispensing or administering prescription
drugs included in the carrier's prescription drug formulary
are used to reduce costs for the employer or individual
purchasing the plan;
! For small group and large employer health benefit plans, all
rebates are used to reduce employer and individual
employee costs; and
! For individual health benefit plans, all rebates are used to
reduce consumers' premiums and out-of-pocket costs for
prescription drugs to the extent practicable.
The bill requires the commissioner of insurance (commissioner)
to promulgate rules to implement prescription drug pass-through
requirements for carriers. Each carrier or PBM is required to report
annually specified prescription drug rebate information to the
commissioner.
Beginning in 2023, the bill requires the department of health care
policy and financing, in collaboration with the administrator of the
all-payer claims database, to conduct an annual analysis of the
prescription drug rebates received in the previous calendar year, by carrier
and prescription drug tier, and make the analysis available to the public.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 10-16-103.6 as2
follows:3
10-16-103.6. Copayment-only prescription payment structures4
- required inclusion in health benefit plans - rules. (1) (a) (I) I
N5
HB22-1370-2- ADDITION TO THE REQUIREMENTS IN SECTION 10-16-103.4 (2), FOR HEALTH1
BENEFIT PLANS ISSUED OR RENEWED ON OR AFTER JANUARY 1, 2023, EACH2
CARRIER THAT OFFERS AN INDIVIDUAL OR SMALL GROUP HEALTH BENEFIT3
PLAN SHALL OFFER AT LEAST TWENTY -FIVE PERCENT OF ITS HEALTH4
BENEFIT PLANS ON THE EXCHANGE AND AT LEAST TWENTY -FIVE PERCENT5
OF ITS PLANS NOT ON THE EXCHANGE IN EACH BRONZE , SILVER, GOLD, AND6
PLATINUM BENEFIT LEVEL IN EACH SERVICE AREA AS COPAYMENT -ONLY7
PAYMENT STRUCTURES FOR ALL PRESCRIPTION DRUG COST TIERS .8
(b) F
OR EACH COPAYMENT -ONLY PAYMENT STRUCTURE FOR9
PRESCRIPTIONS DRUGS:10
(I) T
HE COPAYMENT AMOUNT FOR THE HIGHEST PRESCRIPTION11
DRUG COST TIER MUST NOT BE GREATER THAN ONE -TWELFTH OF THE12
HEALTH BENEFIT PLAN'S OUT-OF-POCKET MAXIMUM AMOUNT ;13
(II) T
HE COPAYMENT AMOUNTS BETWEEN THE TWO HIGHEST14
PRESCRIPTION DRUG COST TIERS MUST HAVE A COST DIFFERENCE OF AT15
LEAST TEN PERCENT;16
(III) N
O MORE THAN FIFTY PERCENT OF THE DRUGS ON THE17
PRESCRIPTION DRUG FORMULARY USED TO TREAT A SPECIFIC CONDITION18
MAY BE PLACED ON THE HIGHEST PRESCRIPTION DRUG COST TIER ; AND19
(IV) E
ACH CARRIER SHALL USE "RX COPAY" AT THE END OF THE20
MARKETING NAMES FOR EACH COPAYMENT -ONLY PAYMENT STRUCTURE .21
(2) T
HE COMMISSIONER MAY PROMULGATE RULES TO IMPLEMENT22
AND ENFORCE THIS SECTION.23
SECTION 2. In Colorado Revised Statutes, add 10-16-122.4 as24
follows:25
10-16-122.4. Pharmacy benefits - formulary change26
prohibition - exceptions - definition - rules. (1) (a) S
TARTING IN 2024,27
HB22-1370
-3- EXCEPT AS PROVIDED IN SUBSECTION (2) OF THIS SECTION, A CARRIER OR,1
IF A CARRIER USES A PBM FOR CLAIMS PROCESSING SERVICES OR OTHER2
PRESCRIPTION DRUG OR DEVICE SERVICES, AS THOSE TERMS ARE DEFINED3
IN SECTION 10-16-122.1, UNDER A HEALTH BENEFIT PLAN OFFERED BY THE4
CARRIER, THE PBM, OR A REPRESENTATIVE OF THE CARRIER OR THE PBM,5
SHALL NOT MODIFY OR APPLY A MODIFICATION TO THE CURRENT6
PRESCRIPTION DRUG FORMULARY DURING THE CURRENT PLAN YEAR .7
(b) A
S USED IN THIS SUBSECTION (1), "MODIFY" OR8
"
MODIFICATION" INCLUDES ELIMINATING A PARTICULAR PRESCRIPTION9
DRUG FROM THE FORMULARY OR MOVING A PRESCRIPTION DRUG TO A10
HIGHER COST-SHARING TIER.11
(2) A
CARRIER OFFERING A HEALTH BENEFIT PLAN IN THIS STATE12
THAT INCLUDES A PRESCRIPTION DRUG BENEFIT AND USES A PRESCRIPTION13
DRUG FORMULARY OR LIST OF COVERED DRUGS MAY :14
(a) R
EMOVE A PRESCRIPTION DRUG FROM THE PRESCRIPTION DRUG15
FORMULARY OR LIST OF COVERED DRUGS , WITH ADVANCE NOTICE TO A16
COVERED PERSON AND THE COVERED PERSON 'S PROVIDER, IF:17
(I) T
HE FDA ISSUES AN ANNOUNCEMENT , GUIDANCE, NOTICE,18
WARNING, OR STATEMENT CONCERNING THE PRESCRIPTION DRUG THAT19
CALLS INTO QUESTION THE CLINICAL SAFETY OF THE PRESCRIPTION DRUG ;20
OR21
(II) T
HE PRESCRIPTION DRUG IS APPROVED BY THE FDA FOR USE22
WITHOUT A PRESCRIPTION; OR23
(b) M
OVE A BRAND-NAME PRESCRIPTION DRUG FROM A24
PRESCRIPTION DRUG COST -SHARING TIER THAT IMPOSES A LESSER25
COPAYMENT OR DEDUCTIBLE FOR THE BRAND -NAME PRESCRIPTION DRUG26
TO A COST-SHARING TIER THAT IMPOSES A GREATER COPAYMENT OR27
HB22-1370
-4- DEDUCTIBLE FOR THE BRAND-NAME PRESCRIPTION DRUG IF THE CARRIER1
ADDS TO THE PRESCRIPTION DRUG FORMULARY OR LIST OF COVERED2
DRUGS A GENERIC PRESCRIPTION DRUG THAT IS :3
(I) A
PPROVED BY THE FDA FOR USE AS AN ALTERNATIVE TO THE4
BRAND-NAME PRESCRIPTION DRUG; AND5
(II) I
N A PRESCRIPTION DRUG COST-SHARING TIER THAT IMPOSES6
A COPAYMENT OR DEDUCTIBLE FOR THE GENERIC PRESCRIPTION DRUG7
THAT IS LESS THAN THE COPAYMENT OR DEDUCTIBLE THAT IS IMPOSED FOR8
THE BRAND-NAME PRESCRIPTION DRUG IN THE COST -SHARING TIER TO9
WHICH THE BRAND-NAME PRESCRIPTION DRUG IS MOVED .10
(3) T
HIS SECTION DOES NOT PROHIBIT A CARRIER FROM ADDING A11
PRESCRIPTION DRUG TO A PRESCRIPTION DRUG FORMULARY OR LIST OF12
COVERED DRUGS AT ANY TIME .13
(4) T
HE COMMISSIONER MAY PROMULGATE RULES TO IMPLEMENT14
AND ENFORCE THIS SECTION.15
SECTION 3. In Colorado Revised Statutes, repeal and reenact,16
with amendments, 10-16-145 as follows:17
10-16-145. Step-therapy protocol - limitations - exceptions -18
definitions - rules. (1) A
S USED IN THIS SECTION:19
(a) "AB-
RATED" MEANS THERAPEUTICALLY EQUIVALENT AS20
EVALUATED BY THE FDA IN THE MOST CURRENT EDITION OF THE FDA21
PUBLICATION "APPROVED DRUG PRODUCTS WITH THERAPEUTIC22
E
QUIVALENCE EVALUATIONS" OR ITS SUCCESSOR PUBLICATION.23
(b) "C
LINICAL PRACTICE GUIDELINES" MEANS A SYSTEMATICALLY24
DEVELOPED STATEMENT TO ASSIST PROVIDERS AND COVERED PERSONS IN25
MAKING DECISIONS ABOUT APPROPRIATE HEALTH CARE FOR SPECIFIC26
CLINICAL CIRCUMSTANCES AND CONDITIONS .27
HB22-1370
-5- (c) "CLINICAL REVIEW CRITERIA" MEANS THE WRITTEN SCREENING1
PROCEDURES, DECISION ABSTRACTS, CLINICAL PROTOCOLS, AND CLINICAL2
PRACTICE GUIDELINES USED BY A CARRIER OR PRIVATE UTILIZATION3
REVIEW ORGANIZATION TO DETERMINE THE MEDICAL NECESSITY AND4
APPROPRIATENESS OF THE PROVISION OF HEALTH -CARE SERVICES.5
C
LINICAL REVIEW CRITERIA MUST NOT BE MORE RESTRICTIVE THAN THE6
FDA'
S INDICATION FOR A SPECIFIC DRUG OR HEALTH- CARE SERVICE.7
(d) "M
EDICAL NECESSITY" MEANS A DETERMINATION BY A8
CARRIER THAT A PRUDENT PROVIDER WOULD PROVIDE A PARTICULAR9
COVERED HEALTH-CARE SERVICE TO A PATIENT FOR THE PURPOSE OF10
PREVENTING, DIAGNOSING, OR TREATING AN ILLNESS , AN INJURY, A11
DISEASE, OR A SYMPTOM IN A MANNER THAT IS:12
(I) I
N ACCORDANCE WITH GENERALLY ACCEPTED STANDARDS OF13
MEDICAL PRACTICE AND APPROVED BY THE FDA OR OTHER REQUIRED14
AGENCY;15
(II) C
LINICALLY APPROPRIATE IN TERMS OF TYPE , FREQUENCY,16
EXTENT, SERVICE SITE, AND LEVEL AND DURATION OF SERVICE ;17
(III) K
NOWN TO BE EFFECTIVE IN IMPROVING HEALTH , AS PROVEN18
BY SCIENTIFIC EVIDENCE;19
(IV) T
HE MOST APPROPRIATE SUPPLY , SETTING, OR LEVEL OF20
SERVICE THAT CAN BE SAFELY PROVIDED GIVEN THE PATIENT 'S CONDITION21
AND THAT CANNOT BE OMITTED FROM THE PATIENT 'S TREATMENT; AND22
(V) N
OT PRIMARILY FOR THE ECONOMIC BENEFIT OF A CARRIER OR23
PURCHASER OR FOR THE CONVENIENCE OF THE PATIENT , THE TREATING24
PROVIDER, OR OTHER PROVIDER.25
(f) "P
RIVATE UTILIZATION REVIEW ORGANIZATION " OR26
"
ORGANIZATION" HAS THE SAME MEANING AS SET FORTH IN SECTION27
HB22-1370
-6- 10-16-112 (1)(a).1
(g) "S
TEP-THERAPY PROTOCOL" MEANS A PROTOCOL, POLICY, OR2
PROGRAM THAT ESTABLISHES THE SPECIFIC SEQUENCE IN WHICH3
PRESCRIPTION DRUGS THAT ARE MEDICALLY APPROPRIATE FOR A4
PARTICULAR COVERED PERSON ARE COVERED BY A HEALTH BENEFIT PLAN5
FOR A SPECIFIED MEDICAL CONDITION.6
(2) I
F A CARRIER, A PRIVATE UTILIZATION REVIEW ORGANIZATION ,7
OR A PBM REQUIRES A STEP-THERAPY PROTOCOL , THE CARRIER,8
ORGANIZATION, OR PBM SHALL USE CLINICAL REVIEW CRITERIA TO9
ESTABLISH THE PROTOCOL BASED ON CLINICAL PRACTICE GUIDELINES .10
(3) U
PON WRITTEN REQUEST OF A COVERED PERSON OR COVERED11
PERSON'S PRESCRIBING PROVIDER, A CARRIER, PRIVATE UTILIZATION12
REVIEW ORGANIZATION, OR PBM SHALL:13
(a) P
ROVIDE ALL SPECIFIC CLINICAL REVIEW CRITERIA AND OTHER14
CLINICAL INFORMATION RELATING TO A COVERED PERSON 'S PARTICULAR15
CONDITION OR DISEASE, INCLUDING CLINICAL REVIEW CRITERIA RELATING16
TO A STEP-THERAPY EXCEPTION, TO THE REQUESTER; AND17
(b) M
AKE THE CLINICAL REVIEW CRITERIA AND OTHER CLINICAL18
INFORMATION AVAILABLE ON THE CARRIER 'S, ORGANIZATION'S, OR PBM'S19
WEBSITE.20
(4) (a) A
CARRIER, A PRIVATE UTILIZATION REVIEW21
ORGANIZATION, OR A PBM SHALL GRANT AN EXCEPTION TO A22
STEP-THERAPY PROTOCOL IF:23
(I) T
HE REQUIRED PRESCRIPTION DRUG IS CONTRAINDICATED OR24
WILL LIKELY CAUSE AN ADVERSE REACTION OR HARM TO THE COVERED25
PERSON;26
(II) T
HE REQUIRED PRESCRIPTION DRUG IS EXPECTED TO BE27
HB22-1370
-7- INEFFECTIVE BASED ON THE KNOWN CLINICAL CHARACTERISTICS OF THE1
COVERED PERSON AND THE KNOWN CHARACTERISTICS OF THE2
PRESCRIPTION DRUG REGIMEN;3
(III) T
HE COVERED PERSON HAS TRIED , WHILE UNDER THE4
COVERED PERSON'S CURRENT OR PREVIOUS HEALTH BENEFIT PLAN , THE5
REQUIRED PRESCRIPTION DRUG OR ANOTHER PRESCRIPTION DRUG IN THE6
SAME PHARMACOLOGIC CLASS OR WITH THE SAME MECHANISM OF ACTION ,7
AND THE USE OF THE PRESCRIPTION DRUG BY THE COVERED PERSON WAS8
DISCONTINUED DUE TO LACK OF EFFICACY OR EFFECTIVENESS , DIMINISHED9
EFFECT, OR AN ADVERSE EVENT;10
(IV) T
HE REQUIRED PRESCRIPTION DRUG IS NOT IN THE BEST11
INTEREST OF THE COVERED PERSON , BASED ON MEDICAL NECESSITY; OR12
(V) T
HE COVERED PERSON, WHILE ON THE COVERED PERSON 'S13
CURRENT OR PREVIOUS HEALTH BENEFIT PLAN , IS STABLE ON A14
PRESCRIPTION DRUG SELECTED BY THE PRESCRIBING PROVIDER FOR THE15
MEDICAL CONDITION UNDER CONSIDERATION .16
(b) T
HE COMMISSIONER SHALL PROMULGATE RULES TO ESTABLISH :17
(I) A
PROCESS, AND THE NECESSARY DOCUMENTS , FOR PROVIDERS18
TO SUBMIT STEP-THERAPY EXCEPTION REQUESTS ; AND19
(II) T
IME FRAMES FOR:20
(A) C
ARRIERS, ORGANIZATIONS, AND PBMS TO GRANT OR DENY21
STEP-THERAPY EXCEPTION REQUESTS ;22
(B) C
ARRIERS, ORGANIZATIONS, AND PBMS TO REQUEST23
ADDITIONAL INFORMATION FROM PRESCRIBING PROVIDERS ; AND24
(C) P
ROVIDERS TO RESPOND TO REQUESTS FROM CARRIERS ,25
ORGANIZATIONS, AND PBMS FOR ADDITIONAL INFORMATION.26
(c) I
F THE INITIAL REQUEST FOR A STEP -THERAPY PROTOCOL27
HB22-1370
-8- EXCEPTION IS DENIED, THE CARRIER, ORGANIZATION, OR PBM SHALL1
INFORM THE COVERED PERSON IN WRITING THAT THE COVERED PERSON2
HAS THE RIGHT TO AN INTERNAL OR EXTERNAL REVIEW OR AN APPEAL OF3
THE ADVERSE DETERMINATION PURSUANT TO SECTIONS 10-16-113 AND4
10-16-113.5.5
(d) A
CARRIER, AN ORGANIZATION, OR A PBM SHALL AUTHORIZE6
COVERAGE FOR THE PRESCRIPTION DRUG PRESCRIBED BY THE COVERED7
PERSON'S PRESCRIBING PROVIDER WHEN THE STEP -THERAPY PROTOCOL8
EXCEPTION REQUEST IS GRANTED.9
(5) T
HIS SECTION DOES NOT PROHIBIT:10
(a) A
CARRIER, AN ORGANIZATION, OR A PBM FROM REQUIRING A11
COVERED PERSON TO TRY AN AB-RATED GENERIC EQUIVALENT OR AN12
INTERCHANGEABLE BIOLOGICAL PRODUCT AS DEFINED BY 42 U.S.C. SEC.13
262 (i)(3),
UNLESS THE COVERED PERSON OR COVERED PERSON 'S14
PRESCRIBING PROVIDER HAS REQUESTED A STEP -THERAPY PROTOCOL15
EXCEPTION AND THE PRESCRIBED DRUG MEETS THE CRITERIA FOR A16
STEP-THERAPY PROTOCOL EXCEPTION SPECIFIED IN SUBSECTION (4)(a) OF17
THIS SECTION;18
(b) A
CARRIER, AN ORGANIZATION, OR A PBM FROM REQUIRING A19
PHARMACIST TO MAKE SUBSTITUTIONS OF PRESCRIPTION DRUGS20
CONSISTENT WITH PART 5 OF ARTICLE 280 OF TITLE 12; OR21
(c) A
PROVIDER FROM PRESCRIBING A DRUG THAT IS DETERMINED22
TO BE MEDICALLY APPROPRIATE.23
(6) T
HE COMMISSIONER MAY PROMULGATE RULES TO IMPLEMENT24
AND ENFORCE THIS SECTION.25
SECTION 4. In Colorado Revised Statutes, amend as it exists26
until January 1, 2023, 10-16-145.5 as follows:27
HB22-1370
-9- 10-16-145.5. Step therapy prohibited - stage four advanced1
metastatic cancer - definitions. (1) Notwithstanding section 10-16-145,2
a carrier that provides coverage under a health benefit plan for the3
treatment of stage four advanced metastatic cancer shall not limit or4
exclude coverage under the health benefit plan for a drug approved by the5
United States food and drug administration FDA and that is on the6
carrier's prescription drug formulary by mandating that a covered person7
with stage four advanced metastatic cancer undergo
A step-therapy8
PROTOCOL if the use of the approved drug is consistent with:9
(a) The United States food and drug administration-approved
10
FDA-
APPROVED indication or the National Comprehensive Cancer11
Network drugs and biologics compendium indication for the treatment of12
stage four advanced metastatic cancer; or13
(b) Peer-reviewed medical literature.14
(2) For the purposes of
AS USED IN this section:15
(a) "Stage four advanced metastatic cancer" means cancer that has16
spread from the primary or original site of the cancer to nearby tissues,17
lymph nodes, or other parts of the body.18
(b) "S
TEP-THERAPY PROTOCOL" HAS THE SAME MEANING AS19
SPECIFIED IN SECTION 10-16-145 (1)(f).20
SECTION 5. In Colorado Revised Statutes, amend as it will21
become effective January 1, 2023, 10-16-145.5 as follows:22
10-16-145.5. Step therapy - prior authorization - prohibited -23
stage four advanced metastatic cancer - opioid prescription -24
definitions. (1) (a)
Notwithstanding section 10-16-145, a carrier that25
provides coverage under a health benefit plan for the treatment of stage26
four advanced metastatic cancer shall not limit or exclude coverage under27
HB22-1370
-10- the health benefit plan for a drug that is approved by the FDA and that is1
on the carrier's prescription drug formulary by mandating that a covered2
person with stage four advanced metastatic cancer undergo
A step-therapy3
PROTOCOL if the use of the approved drug is consistent with:4
(I)
(a) The FDA-approved indication or the National5
Comprehensive Cancer Network drugs and biologics compendium6
indication for the treatment of stage four advanced metastatic cancer; or7
(II) (b) Peer-reviewed medical literature.8
(b) As used in this subsection (1), "stage four advanced metastatic9
cancer" means cancer that has spread from the primary or original site of10
the cancer to nearby tissues, lymph nodes, or other parts of the body.11
(2) (a) Notwithstanding section 10-16-145, a carrier that provides12
prescription drug benefits shall:13
(I) (a) Provide coverage for at least one atypical opioid that has14
been approved by the FDA for the treatment of acute or chronic pain at15
the lowest tier of the carrier's drug formulary and not require
A16
step-therapy
PROTOCOL or prior authorization, as defined in section17
10-16-112.5 (7)(d), for that atypical opioid; and18
(II)
(b) Not require A step-therapy PROTOCOL for the prescription19
and use of any additional atypical opioid medications that have been20
approved by the FDA for the treatment of acute or chronic pain.21
(b) As used in this subsection (2), "atypical opioid" means an22
opioid agonist with a documented safer side-effect profile and less risk of23
addiction than older opium-based medications.24
(3) A
S USED IN THIS SECTION:25
(a) "A
TYPICAL OPIOID" MEANS AN OPIOID AGONIST WITH A26
DOCUMENTED SAFER SIDE-EFFECT PROFILE AND LESS RISK OF ADDICTION27
HB22-1370
-11- THAN OLDER OPIUM-BASED MEDICATIONS.1
(b) "S
TAGE FOUR ADVANCED METASTATIC CANCER " MEANS2
CANCER THAT HAS SPREAD FROM THE PRIMARY OR ORIGINAL SITE OF THE3
CANCER TO NEARBY TISSUES , LYMPH NODES, OR OTHER PARTS OF THE4
BODY.5
(c) "S
TEP-THERAPY PROTOCOL" HAS THE SAME MEANING AS6
SPECIFIED IN SECTION 10-16-145 (1)(f).7
SECTION 6. In Colorado Revised Statutes, add 10-16-155 as8
follows:9
10-16-155. Prescription drugs - cost sharing - point-of-sale10
calculation - rebates - confidentiality - rules - legislative declaration11
- definitions. (1) T
HE GENERAL ASSEMBLY HEREBY FINDS AND DECLARES12
THAT:13
(a) W
ITH APPROXIMATELY ONE HUNDRED FIFTY BILLION DOLLARS14
IN PRESCRIPTION DRUG REBATES IN THE HEALTH -CARE SYSTEM EACH15
YEAR, IT IS UNCLEAR IF THESE REBATES ARE BEING USED TO BENEFIT16
CONSUMERS BY PROVIDING THEM MAXIMIZED COST SAVINGS ;17
(b) M
OST COLORADANS EXPERIENCE INCREASES IN PRESCRIPTION18
DRUG COSTS AND DO NOT BENEFIT FROM INCREASING REBATES WITH19
CORRESPONDING OFFSETS IN THEIR COSTS ; AND 20
(c) R
EQUIRING HEALTH INSURERS TO PASS REBATE SAVINGS ON TO21
CONSUMERS BASED ON THE REBATES THEY RECEIVE FROM22
MANUFACTURERS FOR PRESCRIPTION DRUGS COVERED UNDER THEIR23
HEALTH BENEFIT PLANS WILL PROVIDE IMMEDIATE FINANCIAL RELIEF FOR24
C
OLORADANS AND ENABLE THEM TO OFFSET RISING PRESCRIPTION DRUG25
COSTS.26
(2) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE27
HB22-1370
-12- REQUIRES:1
(a) "H
EALTH INSURER" MEANS:2
(I) A
CARRIER AS DEFINED IN SECTION 10-16-102 (8); AND3
(II) A
CARRIER AS DEFINED IN SECTION 24-50-603 (2).4
(b) "D
EFINED COST SHARING" MEANS A DEDUCTIBLE PAYMENT ,5
COPAYMENT AMOUNT , OR COINSURANCE AMOUNT IMPOSED ON A COVERED6
PERSON FOR A COVERED PRESCRIPTION DRUG UNDER THE COVERED7
PERSON'S HEALTH BENEFIT PLAN.8
(c) "M
ANUFACTURER" MEANS:9
(I) A
PERSON THAT:10
(A) M
ANUFACTURES A PRESCRIPTION DRUG THAT IS SOLD TO11
PURCHASERS IN THIS STATE; OR12
(B) E
NTERS INTO A LEASE OR OTHER CONTRACTUAL AGREEMENT13
WITH ANOTHER MANUFACTURER TO MARKET AND DISTRIBUTE A14
PRESCRIPTION DRUG IN THIS STATE UNDER THE PERSON 'S OWN NAME AND15
SETS OR CHANGES THE WHOLESALE ACQUISITION COST OF THE16
PRESCRIPTION DRUG IN THIS STATE; OR17
(II) A
REBATE AGGREGATOR , A SUBSIDIARY, ANY AFFILIATED18
HOLDING OR PARENT COMPANY , OR ANY OTHER ORGANIZATIONAL19
AFFILIATE OF A PERSON THAT MANUFACTURES A PRESCRIPTION DRUG THAT20
IS SOLD IN THIS STATE.21
(d) "P
RESCRIPTION DRUG" HAS THE SAME MEANING AS SET FORTH22
IN SECTION 12-280-103 (42); EXCEPT THAT THE TERM INCLUDES ONLY23
PRESCRIPTION DRUGS THAT ARE INTENDED FOR HUMAN USE .24
(e) (I) "R
EBATE" MEANS A PRICE CONCESSION, A PRICE DISCOUNT,25
OR A DISCOUNT OF ANY SORT MADE BY A MANUFACTURER THAT REDUCES26
PAYMENTS FOR A PRESCRIPTION DRUG , INCLUDING:27
HB22-1370
-13- (A) A PARTIAL REFUND OF PAYMENTS;1
(B) A
REDUCTION IN THE TOTAL AMOUNT PAID FOR A2
PRESCRIPTION DRUG;3
(C) A
PERFORMANCE-BASED FINANCIAL REWARD;4
(D) A
FINANCIAL REWARD FOR INCLUDING A PRESCRIPTION DRUG5
IN A PREFERRED DRUG LIST OR FORMULARY OR PREFERRED FORMULARY6
POSITION;7
(E) A
MARKET SHARE INCENTIVE PAYMENT OR REWARD ;8
(F) A
COMMISSION; OR9
(G) A
NY OTHER COMPENSATION PAID BY A SUBSIDIARY , ANY10
AFFILIATED HOLDING OR PARENT COMPANY , OR ANY OTHER11
ORGANIZATIONAL AFFILIATE OF A PERSON THAT MANUFACTURES A12
PRESCRIPTION DRUG THAT IS SOLD IN THIS STATE.13
(II) T
HE COMMISSIONER MAY PROMULGATE RULES TO FURTHER14
DEFINE "REBATE" FOR PURPOSES OF THIS SECTION.15
(3) F
OR EACH HEALTH BENEFIT PLAN ISSUED OR RENEWED ON OR16
AFTER JANUARY 1, 2024, A HEALTH INSURER OR PBM SHALL17
DEMONSTRATE TO THE DIVISION THAT :18
(a) O
NE HUNDRED PERCENT OF THE ESTIMATED REBATES RECEIVED19
OR TO BE RECEIVED IN CONNECTION WITH DISPENSING OR ADMINISTERING20
PRESCRIPTION DRUGS INCLUDED IN THE HEALTH INSURER 'S FORMULARY21
FOR THAT PLAN YEAR ARE USED TO REDUCE COSTS ;22
(b) F
OR SMALL GROUP AND LARGE EMPLOYER PLANS , ALL REBATES23
ARE USED TO REDUCE EMPLOYER AND INDIVIDUAL EMPLOYEE COSTS ; AND24
(c) F
OR INDIVIDUAL HEALTH BENEFIT PLANS , ALL REBATES ARE25
USED TO REDUCE CONSUMERS' PREMIUMS AND DEFINED COST SHARING FOR26
PRESCRIPTION DRUGS AND THAT THE MAJORITY OF REBATES WILL BE USED27
HB22-1370
-14- TO MAXIMIZE THE REDUCTION OF DEFINED COST SHARING FOR CONSUMERS1
AT THE POINT OF SALE.2
(4) A
HEALTH INSURER OR PBM SHALL NOT REDUCE A DISPENSING3
PHARMACY'S PAYMENT OR REIMBURSEMENT BASED ON A COVERED4
PERSON'S COST-SHARING PRICE REDUCTION. A HEALTH INSURER OR PBM5
SHALL NOT INCLUDE IN A CONTRACT WITH A DISPENSING PHARMACY A6
PROVISION THAT WOULD LOWER THE PHARMACY REIMBURSEMENT BASED7
ON A COVERED PERSON'S COST-SHARING PRICE REDUCTION.8
(5)
THE DIVISION SHALL EVALUATE HOW REBATES MAY BE9
APPLIED TO REDUCE A COVERED PERSON 'S DEFINED COST SHARING FOR10
EACH PRESCRIPTION DRUG AT THE POINT OF SALE AND HOW REBATES MAY11
BE APPLIED TO REDUCE DEFINED COST SHARING , TAKING INTO12
CONSIDERATION THE AVERAGE PREMIUM IMPACTS . REGARDLESS OF THE13
RESULTS OF THE EVALUATION IN THIS SUBSECTION (5), A HEALTH INSURER14
OR PBM SHALL COMPLY WITH SUBSECTION (4) OF THIS SECTION.15
(6) E
ACH HEALTH INSURER AND PBM SHALL REPORT ANNUALLY,16
IN A MANNER DETERMINED BY THE COMMISSIONER , THE FOLLOWING17
INFORMATION:18
(a) P
ROSPECTIVE, ACTUARIALLY SOUND ESTIMATES OF ALL19
REBATES TO BE RECEIVED DURING THE UPCOMING PLAN YEAR ,20
SEGREGATED BY TIERS THAT ARE IDENTIFIED IN THE HEALTH INSURER 'S21
FORMULARY FOR HEALTH BENEFIT PLANS . THE ESTIMATES SHALL INCLUDE:22
(I) F
OR INDIVIDUAL, SMALL GROUP, AND LARGE EMPLOYER PLANS,23
THE ESTIMATED AGGREGATE AMOUNT OF REBATES THE HEALTH INSURER24
EXPECTS TO RECEIVE, IN DOLLARS AND AS A PERCENTAGE OF EXPECTED25
TOTAL PRESCRIPTION DRUG CLAIM EXPENDITURES ;26
(II) F
OR SMALL GROUP AND LARGE EMPLOYER PLANS , THE27
HB22-1370
-15- ESTIMATED AGGREGATE AMOUNT OF REBATES THE HEALTH INSURER1
EXPECTS TO PASS ON TO EMPLOYERS FOR EMPLOYERS TO REDUCE COSTS2
FOR COVERED PERSONS, IN DOLLARS AND AS A PERCENTAGE OF TOTAL3
REBATES RECEIVED;4
(III) F
OR INDIVIDUAL PLANS, THE ESTIMATED AGGREGATE AM OUNT5
OF REBATES THAT WILL BE USED TO REDUCE DEFINED COST SHARING FOR6
COVERED PERSONS;7
(IV) F
OR INDIVIDUAL, SMALL GROUP, AND LARGE EMPLOYER8
PLANS, THE ESTIMATED AGGREGATE AM OUNT OF REBATES THE HEALTH9
INSURER EXPECTS TO USE TO REDUCE PREMIUMS FOR EMPLOYERS AND10
COVERED PERSONS; AND11
(V) A
NY OTHER DATA , AS SPECIFIED BY RULE OF THE12
COMMISSIONER, THAT IS NECESSARY TO DETERMINE A HEALTH INSURER 'S13
OR PBM'S COMPLIANCE WITH SUBSECTION (3) OF THIS SECTION.14
(b) A
CTUAL AMOUNTS OF REBATES FOR ALL REBATES RECEIVED15
DURING THE PAST PLAN YEAR , SEGREGATED BY TIERS THAT ARE16
IDENTIFIED IN THE HEALTH INSURER'S FORMULARY FOR HEALTH BENEFIT17
PLANS. THESE ACTUAL AMOUNTS SHALL INCLUDE :18
(I) F
OR INDIVIDUAL, SMALL GROUP, AND LARGE EMPLOYER PLANS,19
THE AGGREGATE AMOUNT OF REBATES RECEIVED BY THE HEALTH INSURER ,20
IN DOLLARS AND AS A PERCENTAGE OF TOTAL PRESCRIPTION DRUG CLAIM21
EXPENDITURES;22
(II) F
OR SMALL GROUP AND LARGE EMPLOYER PLANS , THE23
AGGREGATE AMOUNT OF REBATES PASSED ON TO EMPLOYERS FOR24
EMPLOYERS TO REDUCE COSTS FOR COVERED PERSONS , IN DOLLARS AND25
AS A PERCENTAGE OF TOTAL REBATES RECEIVED ;26
(III) F
OR INDIVIDUAL PLANS, THE AGGREGATE AMOUNT OF27
HB22-1370
-16- REBATES USED TO REDUCE DEFINED COST SHARING FOR COVERED1
PERSONS;2
(IV) F
OR INDIVIDUAL, SMALL GROUP, AND LARGE EMPLOYER3
PLANS, THE AGGREGATE AMOUNT OF REBATES USED TO REDUCE PREMIUMS4
FOR EMPLOYERS AND COVERED PERSONS ; AND5
(V) A
NY OTHER DATA , AS SPECIFIED BY RULE OF THE6
COMMISSIONER, THAT IS NECESSARY TO DETERMINE A HEALTH INSURER 'S7
OR PBM'S COMPLIANCE WITH SUBSECTION (3) OF THIS SECTION.8
(c) A
N EXPLANATION AND DEMONSTRATION OF HOW DIFFERENCES9
IN ACTUARIALLY SOUND ESTIMATES OF PRESCRIPTION DRUG REBATES TO10
BE RECEIVED DURING A PLAN YEAR AND ACTUAL PRESCRIPTION DRUG11
REBATES RECEIVED DURING THAT PLAN YEAR ARE ACCOUNTED FOR IN12
MEDICAL-LOSS RATIO REFUND CALCULATIONS FOR THAT PLAN YEAR ;13
(d) F
OR SMALL GROUP AND LARGE EMPLOYER PLANS ,14
ADMINISTRATIVE FEES, DISPENSING FEES, DRUG UTILIZATION REVIEW FEES,15
AND THE AVERAGE REIMBURSEMENT FOR NONSPECIALTY , BRAND-NAME16
PRESCRIPTION DRUGS; AND17
(e) A
N ACTUARIAL CERTIFICATION THAT ATTESTS THAT :18
(I) T
HE HEALTH INSURER OR PBM IS IN COMPLIANCE WITH19
SUBSECTION (3) OF THIS SECTION; AND20
(II) T
HE DATA REPORTED AS REQUIRED BY THIS SUBSECTION (5) IS21
ACCURATE.22
(7) T
HE DIVISION MAY USE DATA FROM THE DEPARTMENT OF23
HEALTH CARE POLICY AND FINANCING , THE ALL-PAYER CLAIM DATABASE24
DESCRIBED IN SECTION 25.5-1-204, AND OTHER SOURCES TO VERIFY THAT25
A HEALTH INSURER OR PBM IS IN COMPLIANCE WITH THIS SECTION.26
(8) T
HE DIVISION SHALL NOT DISCLOSE OR OTHERWISE MAKE27
HB22-1370
-17- AVAILABLE TO THE PUBLIC ANY MATERIALS OR INFORMATION RECEIVED1
PURSUANT TO THIS SECTION THAT CONTAINS TRADE SECRETS OR2
CONFIDENTIAL OR PROPRIETARY DATA THAT IS NOT OTHERWISE3
AVAILABLE TO THE PUBLIC.4
(9) T
HIS SECTION DOES NOT PROHIBIT A HEALTH INSURER FROM5
DECREASING COST-SHARING AMOUNTS OR PREMIUMS BY AN AMOUNT6
GREATER THAN THE AMOUNT REQUIRED IN SUBSECTION (3) OF THIS7
SECTION.8
(10) T
HE REQUIREMENTS OF SUBSECTIONS (3) AND (6) OF THIS9
SECTION APPLY TO A SELF-FUNDED HEALTH BENEFIT PLAN AND ITS PLAN10
MEMBERS ONLY IF THE ENTITY THAT PROVIDES THE PLAN ELECTS TO BE11
SUBJECT TO SUBSECTIONS (3) AND (6) OF THIS SECTION FOR ITS MEMBERS12
IN COLORADO.13
(11) F
OR EACH HEALTH BENEFIT PLAN ISSUED OR RENEWED ON OR14
AFTER JANUARY 1, 2024, THE CONTRACTED REIMBURSEMENT AMOUNT15
PAID BY THE HEALTH INSURER OR THE PBM TO THE CONTRACTED16
PHARMACY FOR A PRESCRIPTION DRUG MUST BE THE SAME AS THE CHARGE17
BY THE HEALTH INSURER OR THE PBM TO THE RESPECTIVE INDIVIDUAL18
HEALTH BENEFIT PLAN OR EMPLOYER -SPONSORED PLAN FOR THAT DRUG .19
(12) T
HE COMMISSIONER SHALL PROMULGATE RULES TO20
IMPLEMENT AND ENFORCE THIS SECTION .21
SECTION 7. In Colorado Revised Statutes, add 25.5-5-513 as22
follows:23
25.5-5-513. Pharmacy benefits - prescription drugs - rebates24
- analysis. (1) B
EGINNING IN 2023, THE STATE DEPARTMENT SHALL , IN25
COLLABORATION WITH THE ADMINISTRATOR OF THE ALL -PAYER CLAIMS26
DATABASE DESCRIBED IN SECTION 25.5-1-204, CONDUCT AN ANNUAL27
HB22-1370
-18- ANALYSIS OF THE PRESCRIPTION DRUG REBATES RECEIVED IN THE1
PREVIOUS CALENDAR YEAR , BY HEALTH INSURANCE CARRIER AND2
PRESCRIPTION DRUG TIER. THE ANALYSIS, USING DATA FROM THE3
ALL-PAYERS CLAIM DATABASE AND OTHER SOURCES , MUST BE COMPLETED4
ON OR BEFORE MAY 1 OF EACH YEAR.5
(2) T
HE STATE DEPARTMENT SHALL MAKE THE ANALYSIS6
CONDUCTED IN SUBSECTION (1) OF THIS SECTION AVAILABLE TO THE7
PUBLIC ON AN ANNUAL BASIS.8
SECTION 8. Act subject to petition - effective date -9
applicability. (1) This act takes effect at 12:01 a.m. on the day following10
the expiration of the ninety-day period after final adjournment of the11
general assembly; except that, if a referendum petition is filed pursuant12
to section 1 (3) of article V of the state constitution against this act or an13
item, section, or part of this act within such period, then the act, item,14
section, or part will not take effect unless approved by the people at the15
general election to be held in November 2022 and, in such case, will take16
effect on the date of the official declaration of the vote thereon by the17
governor.18
(2) Section 1 of this act applies to health benefit plans issued or19
renewed on or after January 1, 2023.20
(3) Sections 2 through 6 of this act apply to health benefit plans21
issued or renewed on or after January 1, 2024.22
HB22-1370
-19-