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Regular Session, 2011
HOUSE BILL NO. 345
BY REPRESENTATIVE LAFONTA
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
INSURANCE/HEALTH: Provides relative to coverage of prescription drugs by health
benefit plans, including through a drug formulary
AN ACT1
To amend and reenact R.S. 22:1068(D) and 1074(D) and to enact R.S. 22:1061(5)(y) and2
Subpart B-1 of Part III of Chapter 4 of Title 22 of the Louisiana Revised Statutes of3
1950, to be comprised of R.S. 22:1060.1 through 1060.4, relative to health insurance;4
to provide with respect to coverage by a health benefit plan of prescription drugs,5
including through the use of a drug formulary; to provide relative to guaranteed6
renewability of coverage in the group and individual market with regard to7
modifications affecting drug coverage; to provide for applicability; and to provide8
for related matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 22:1068(D) and 1074(D) are hereby amended and reenacted and R.S.11
22:1061(5)(y) and Subpart B-1 of Part III of Chapter 4 of Title 22 of the Louisiana Revised12
Statutes of 1950, comprised of R.S. 22:1060.1 through 1060.4, are hereby enacted to read13
as follows:14
SUBPART B-1. COVERAGE OF PRESCRIPTION DRUGS15
THROUGH A DRUG FORMULARY16
§1060.1. Definitions17
As used in this Subpart, the following definitions shall apply:18
(1) "Authorized prescriber" means a person licensed, registered, or otherwise19
authorized by the appropriate licensing board to prescribe prescription drugs in the20
course of professional practice.21 HLS 11RS-613 REENGROSSED
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(2) "Drug formulary" or "formulary" means a list of prescription drugs which1
meets any of the following criteria:2
(a) For which a health benefit plan provides coverage.3
(b) For which a health benefit plan approves payment.4
(c) That a health insurance issuer encourages or offers incentives for5
physicians or other authorized prescribers to prescribe.6
(3) "Enrollee" or "insured" means an individual who is enrolled or insured7
by a health insurance issuer under a health benefit plan.8
(4) "Health benefit plan" or "plan" means an entity which provides benefits9
through or by a health insurance issuer consisting of health care services provided10
directly, through insurance or reimbursement, or otherwise and including items and11
services paid for as health care services under any hospital or medical service policy12
or certificate, hospital or medical service plan contract, preferred provider13
organization agreement, or health maintenance organization contract; however,14
"health benefit plan" shall not include benefits due under Chapter 10 of Title 23 of15
the Louisiana Revised Statutes of 1950 or limited benefit and supplemental health16
insurance policies, benefits provided under a separate policy, certificate, or contract17
of insurance for accidents, disability income, limited scope dental or vision benefits,18
benefits for long-term care, nursing home care, home health care, or specific diseases19
or illnesses, or any other limited benefit policy or contract as defined in R.S.20
22:47(2)(c).21
(5) "Health care services" means services, items, supplies, or prescription22
drugs for the diagnosis, treatment, cure, or relief of a health condition, illness, injury,23
or disease.24
(6) "Health insurance issuer" or "issuer" means any entity that offers a health25
benefit plan through a policy, contract, or certificate of insurance subject to state law26
that regulates the business of insurance. For purposes of this Subpart, a "health27
insurance issuer" or "issuer" shall include but not be limited to a health maintenance28
organization as defined and licensed pursuant to Subpart I of Part I of Chapter 2 of29 HLS 11RS-613 REENGROSSED
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this Title. A "health insurance issuer" or "issuer" shall not include any entity1
preempted as an employee benefit plan under the Employee Retirement Income2
Security Act of 1974 or the Office of Group Benefits.3
(7) "Physician" means a person licensed by the Louisiana State Board of4
Medical Examiners.5
(8) "Prescription drug" or "drug" means any of the following:6
(a) A substance for which federal or state law requires a prescription before7
the substance may be legally dispensed to the public.8
(b) A drug or device that under federal law is required, before being9
dispensed or delivered, to be labeled with the statement: "Caution: Federal law10
prohibits dispensing without prescription" or "Rx only" or another legend that11
complies with federal law.12
(c) A drug or device that is required by federal or state statute or regulation13
to be dispensed on prescriptions or that is restricted to use by a physician or other14
authorized prescriber.15
§1060.2. Notice and disclosure of certain information required16
A health insurance issuer of a health benefit plan that covers prescription17
drugs and uses one or more drug formularies to specify the prescription drugs18
covered under the plan shall:19
(1) Provide in plain language in the coverage documentation provided to20
each enrollee each of the following:21
(a) Notice that the plan uses one or more drug formularies.22
(b) An explanation of what a drug formulary is.23
(c) A statement regarding the method the health insurance issuer uses to24
determine the prescription drugs to be included in or excluded from a drug25
formulary.26
(d) A statement of how often the health insurance issuer reviews the contents27
of each drug formulary.28 HLS 11RS-613 REENGROSSED
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(e) Notice, on a form approved by the Department of Insurance, that an1
enrollee may contact the health insurance issuer to determine whether a specific drug2
is included in a particular drug formulary.3
(2) Disclose to an individual upon request, not later than the third business4
day after the date of the request, whether a specific drug is included in a particular5
drug formulary.6
(3) Notify an enrollee and any other individual who requests information7
pursuant to this Section that the inclusion of a drug in a drug formulary does not8
guarantee that an enrollee's physician or other authorized prescriber will prescribe9
the drug for a particular medical condition or mental illness.10
§1060.3. Continuation of coverage required; other drugs not precluded11
A. A health insurance issuer of a health benefit plan that covers prescription12
drugs shall offer to each enrollee at the contracted benefit level and until the13
enrollee's plan renewal date any prescription drug that was approved or covered14
under the plan for a medical condition or medical illness, regardless of whether the15
drug has been removed from the health benefit plan's drug formulary before the plan16
renewal date.17
B. This Section shall not prohibit a physician or other authorized prescriber18
from prescribing a drug that is an alternative to a drug for which continuation of19
coverage is required by Subsection A of this Section if the alternative drug meets20
each of the following conditions:21
(1) The drug is covered under the health benefit plan.22
(2) The drug is medically appropriate for the enrollee.23
§1060.4. Adverse determination24
A. The refusal of a health insurance issuer to provide benefits to an enrollee25
for a prescription drug is an adverse determination for the purposes of Subpart F of26
this Part, R.S. 22:1121 et seq., relative to medical necessity review organizations, if27
each of the following conditions is met:28 HLS 11RS-613 REENGROSSED
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(1) The drug is not included in a drug formulary used by the health benefit1
plan.2
(2) The enrollee's physician or other authorized prescriber has determined3
the drug is medically necessary.4
B. The enrollee may appeal the adverse determination pursuant to Subpart5
F of this Part, R.S. 22:1121 et seq., relative to medical necessity review6
organizations.7
§1061. Definitions8
As used in R.S. 22:984 and 1061 through 1079, the following terms shall9
have the following meanings:10
* * *11
(5) Other definitions are:12
* * *13
(y) "Modification affecting drug coverage" means any of the following:14
(i) Removing a drug from a formulary.15
(ii) Adding a requirement that an enrollee receive prior authorization for a16
drug.17
(iii) Imposing or altering a quantity limit for a drug.18
(iv) Imposing a step-therapy restriction for a drug.19
(v) Moving a drug to a higher cost-sharing tier, unless a generic alternative20
is available.21
* * *22
§1068. Guaranteed renewability of coverage for employers in the group market23
* * *24
D. At the time of coverage renewal, a A health insurance issuer may modify25
the health insurance coverage for a product offered to a group health plan: if each of26
the following conditions is met:27
(1) In the large group market. The modification occurs at the time of28
coverage renewal.29 HLS 11RS-613 REENGROSSED
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(2) In the small group market if, for coverage that is available in such market1
other than only through one or more bona fide associations, such The modification2
is approved by the commissioner and is effective on a uniform basis among all small3
or large employers covered by that group health plans with that product. plan.4
(3) The issuer notifies, on a form approved by the Department of Insurance,5
each affected covered small or large employer and enrollee of the modification,6
including modification of coverage of a particular product or modification of drug7
coverage, not later than the sixtieth day before the date the modification is effective.8
* * *9
§1074. Guaranteed renewability of individual health insurance coverage10
* * *11
D. At the time of coverage renewal, a A health insurance issuer may modify12
the health insurance coverage for a policy form offered to individuals in the13
individual market so long as if each of the following conditions is met:14
(1) The modification occurs at the time of coverage renewal. 15
(2) such The modification is approved by the commissioner, is consistent16
with state law, and is effective on a uniform basis among all individuals with that17
policy form.18
(3) The issuer notifies, on a form approved by the Department of Insurance,19
each affected individual of the modification, including modification of coverage of20
a particular product or modification of drug coverage, not later than the sixtieth day21
before the date the modification is effective.22
* * *23
Section 2. This Act shall apply only to a health benefit plan, group health plan, or24
individual health insurance policy delivered, issued for delivery, or renewed on or after25
January 1, 2012.26
Section 3. This Act shall become effective on January 1, 2012.27 HLS 11RS-613 REENGROSSED
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
LaFonta HB No. 345
Abstract: Requires notification and disclosure by a health benefit plan of covered
prescription drugs, including through the use of a drug formulary. Limits
modification of such a formulary during a plan year.
Proposed law provides relative to coverage of prescription drugs by health benefit plans,
including through the use of a drug formulary, as follows:
(1)Defines certain terms, including "drug formulary", "health insurance issuer","health
benefit plan", and "prescription drug".
(2)Requires a health insurance issuer of a health benefit plan that covers prescription
drugs and uses one or more drug formularies to specify the prescription drugs
covered under the plan to provide in plain language in the coverage documentation
provided to each enrollee each of the following:
(a)Notice that the plan uses one or more drug formularies.
(b)An explanation of what a drug formulary is.
(c)A statement regarding the method the health insurance issuer uses to
determine the prescription drugs to be included in or excluded from a drug
formulary.
(d)A statement of how often the health insurance issuer reviews the contents of
each drug formulary.
(e)Notice on a form approved by the Dept. of Insurance (DOI) that an enrollee
may contact the health insurance issuer to determine whether a specific drug
is included in a particular drug formulary.
(3)Further requires such a health insurance issuer to disclose to an individual upon
request, not later than the third business day after the date of the request, whether a
specific drug is included in a particular drug formulary. Additionally requires such
a health insurance issuer to notify an enrollee and any other individual who requests
information under proposed law that the inclusion of a drug in a drug formulary does
not guarantee that an enrollee's physician or other authorized prescriber will
prescribe the drug for a particular medical condition or mental illness.
(4)A health insurance issuer of a health benefit plan that covers prescription drugs shall
offer to each enrollee at the contracted benefit level and until the enrollee's plan
renewal date any prescription drug that was approved or covered under the plan for
a medical condition or medical illness, regardless of whether the drug has been
removed from the health benefit plan's drug formulary before the plan renewal date.
Specifies that proposed law shall not prohibit a physician or other authorized
prescriber from prescribing a drug that is an alternative to a drug for which such
continuation of coverage is required if the alternative drug is covered under the
health benefit plan and is medically appropriate for the enrollee. HLS 11RS-613 REENGROSSED
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(5)Present law, the Medical Necessity Review Organization Act, which establishes the
minimum standards required for any entity to determine what medical services or
procedures will be covered under a health plan based on medical necessity. Provides
for an internal and external appeal and review of an adverse determination, meaning
that a covered benefit has been reviewed and denied, reduced, or terminated.
Proposed law provides that refusal of a health insurance issuer to provide benefits
to an enrollee for a prescription drug is an adverse determination for the purposes of
present law if the drug is not included in a drug formulary used by the health benefit
plan and the enrollee's physician or other authorized prescriber has determined the
drug is medically necessary. Specifically authorizes the enrollee to appeal such
adverse determination pursuant to present law.
(6)Present law relative to portability, availability, and renewability of health insurance
coverage provides for numerous definitions.
Proposed law adds the definition of "modification affecting drug coverage" as
meaning any of the following:
(a)Removing a drug from a formulary.
(b)Adding a requirement that an enrollee receive prior authorization for a drug.
(c)Imposing or altering a quantity limit for a drug.
(d)Imposing a step-therapy restriction for a drug.
(e)Moving a drug to a higher cost-sharing tier, unless a generic alternative is
available.
(7)Present law, relative to guaranteed renewability of coverage for employers in the
group market, allows a health insurance issuer, at the time of coverage renewal, to
modify coverage for a product offered to a group health plan in the large group
market. Provides that such a modification is allowed in the small group market if it
is approved by the commissioner and is effective on a uniform basis among group
health plans with that product.
Proposed law instead allows a health insurance issuer to modify health insurance
coverage offered to a group health plan at the time of coverage renewal if the
modification is approved by the commissioner and is effective among all small or
large employers covered by a group health plan. Additionally requires the issuer to
notify on a form approved by DOI each affected covered small or large employer
and enrollee of the modification, including modification of coverage of a particular
product or modification of drug coverage, not later than the 60
th
day before the date
the modification is effective.
(8)Present law, relative to guaranteed renewability of individual health insurance
coverage, allows a health insurance issuer, at the time of coverage renewal, to
modify the health insurance coverage for a policy form offered to individuals in the
individual market so long as such modification is consistent with state law and
effective on a uniform basis among all individuals with that policy form.
Proposed law allows a health insurance issuer to modify the health insurance
coverage for a policy form offered to individuals in the individual market at the time
of coverage renewal if the modification is approved by the commissioner, is
consistent with state law, and is effective on a uniform basis among all individuals
with that policy form. Additionally requires the issuer to notify on a form approved
by DOI each affected individual of the modification, including modification of HLS 11RS-613 REENGROSSED
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coverage of a particular product or modification of drug coverage, not later than the
60
th
day before the date the modification is effective.
(9)Provides that proposed law shall apply only to a health benefit plan, group health
plan, or individual health insurance policy delivered, issued for delivery, or renewed
on or after Jan. 1, 2012.
Effective January 1, 2012.
(Amends R.S. 22:1068(D) and 1074(D); Adds R.S. 22:1061(5)(y) and 1060.1-1060.4)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Insurance to the original
bill.
1. Added requirement that the commissioner of insurance approve modifications
to individual health plans at the time of coverage renewal.
House Floor Amendments to the engrossed bill.
1. Modified the definition of "drug formulary".
2. Required that certain notifications provided by health insurance issuers to
employers and enrollees be on forms approved by the Department of Insurance.