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ACT No. 350
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.
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
(2) "Drug formulary" or "formulary" means a list of prescription drugs which22
meets any of the following criteria:23
(a) For which a health benefit plan provides coverage.24 ENROLLEDHB NO. 345
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(b) For which a health benefit plan approves payment.1
(c) That a health insurance issuer encourages or offers incentives for2
physicians or other authorized prescribers to prescribe.3
(3) "Enrollee" or "insured" means an individual who is enrolled or insured4
by a health insurance issuer under a health benefit plan.5
(4) "Health benefit plan" or "plan" means an entity which provides benefits6
through or by a health insurance issuer consisting of health care services provided7
directly, through insurance or reimbursement, or otherwise and including items and8
services paid for as health care services under any hospital or medical service policy9
or certificate, hospital or medical service plan contract, preferred provider10
organization agreement, or health maintenance organization contract; however,11
"health benefit plan" shall not include benefits due under Chapter 10 of Title 23 of12
the Louisiana Revised Statutes of 1950 or limited benefit and supplemental health13
insurance policies, benefits provided under a separate policy, certificate, or contract14
of insurance for accidents, disability income, limited scope dental or vision benefits,15
benefits for long-term care, nursing home care, home health care, or specific diseases16
or illnesses, or any other limited benefit policy or contract as defined in R.S.17
22:47(2)(c).18
(5) "Health care services" means services, items, supplies, or prescription19
drugs for the diagnosis, treatment, cure, or relief of a health condition, illness, injury,20
or disease.21
(6) "Health insurance issuer" or "issuer" means any entity that offers a health22
benefit plan through a policy, contract, or certificate of insurance subject to state law23
that regulates the business of insurance. For purposes of this Subpart, a "health24
insurance issuer" or "issuer" shall include but not be limited to a health maintenance25
organization as defined and licensed pursuant to Subpart I of Part I of Chapter 2 of26
this Title. A "health insurance issuer" or "issuer" shall not include any entity27
preempted as an employee benefit plan under the Employee Retirement Income28
Security Act of 1974 or the Office of Group Benefits.29 ENROLLEDHB NO. 345
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(7) "Physician" means a person licensed by the Louisiana State Board of1
Medical Examiners.2
(8) "Prescription drug" or "drug" means any of the following:3
(a) A substance for which federal or state law requires a prescription before4
the substance may be legally dispensed to the public.5
(b) A drug or device that under federal law is required, before being6
dispensed or delivered, to be labeled with the statement: "Caution: Federal law7
prohibits dispensing without prescription" or "Rx only" or another legend that8
complies with federal law.9
(c) A drug or device that is required by federal or state statute or regulation10
to be dispensed on prescriptions or that is restricted to use by a physician or other11
authorized prescriber.12
§1060.2. Notice and disclosure of certain information required13
A health insurance issuer of a health benefit plan that covers prescription14
drugs and uses one or more drug formularies to specify the prescription drugs15
covered under the plan shall:16
(1) Provide in plain language in the coverage documentation provided to17
each enrollee each of the following:18
(a) Notice that the plan uses one or more drug formularies.19
(b) An explanation of what a drug formulary is.20
(c) A statement regarding the method the health insurance issuer uses to21
determine the prescription drugs to be included in or excluded from a drug22
formulary.23
(d) A statement of how often the health insurance issuer reviews the contents24
of each drug formulary.25
(e) Notice, on a form approved by the Department of Insurance, that an26
enrollee may contact the health insurance issuer to determine whether a specific drug27
is included in a particular drug formulary.28 ENROLLEDHB NO. 345
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(2) Disclose to an individual upon request, not later than the third business1
day after the date of the request, whether a specific drug is included in a particular2
drug formulary.3
(3) Notify an enrollee and any other individual who requests information4
pursuant to this Section that the inclusion of a drug in a drug formulary does not5
guarantee that an enrollee's physician or other authorized prescriber will prescribe6
the drug for a particular medical condition or mental illness.7
§1060.3. Continuation of coverage required; other drugs not precluded8
A. A health insurance issuer of a health benefit plan that covers prescription9
drugs shall offer to each enrollee at the contracted benefit level and until the10
enrollee's plan renewal date any prescription drug that was approved or covered11
under the plan for a medical condition or medical illness, regardless of whether the12
drug has been removed from the health benefit plan's drug formulary before the plan13
renewal date.14
B. This Section shall not prohibit a physician or other authorized prescriber15
from prescribing a drug that is an alternative to a drug for which continuation of16
coverage is required by Subsection A of this Section if the alternative drug meets17
each of the following conditions:18
(1) The drug is covered under the health benefit plan.19
(2) The drug is medically appropriate for the enrollee.20
§1060.4. Adverse determination21
A. The refusal of a health insurance issuer to provide benefits to an enrollee22
for a prescription drug is an adverse determination for the purposes of Subpart F of23
this Part, R.S. 22:1121 et seq., relative to medical necessity review organizations, if24
each of the following conditions is met:25
(1) The drug is not included in a drug formulary used by the health benefit26
plan.27
(2) The enrollee's physician or other authorized prescriber has determined28
the drug is medically necessary.29 ENROLLEDHB NO. 345
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B. The enrollee may appeal the adverse determination pursuant to Subpart1
F of this Part, R.S. 22:1121 et seq., relative to medical necessity review2
organizations.3
§1061. Definitions4
As used in R.S. 22:984 and 1061 through 1079, the following terms shall5
have the following meanings:6
* * *7
(5) Other definitions are:8
* * *9
(y) "Modification affecting drug coverage" means any of the following:10
(i) Removing a drug from a formulary.11
(ii) Adding a requirement that an enrollee receive prior authorization for a12
drug.13
(iii) Imposing or altering a quantity limit for a drug.14
(iv) Imposing a step-therapy restriction for a drug.15
(v) Moving a drug to a higher cost-sharing tier, unless a generic alternative16
is available.17
* * *18
§1068. Guaranteed renewability of coverage for employers in the group market19
* * *20
D. At the time of coverage renewal, a A health insurance issuer may modify21
the health insurance coverage for a product offered to a group health plan: if each of22
the following conditions is met:23
(1) In the large group market. The modification occurs at the time of24
coverage renewal.25
(2) In the small group market if, for coverage that is available in such market26
other than only through one or more bona fide associations, such The modification27
is approved by the commissioner and is effective on a uniform basis among all small28
or large employers covered by that group health plans with that product. plan.29 ENROLLEDHB NO. 345
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(3) The issuer notifies, on a form approved by the Department of Insurance,1
each affected covered small or large employer and enrollee of the modification,2
including modification of coverage of a particular product or modification of drug3
coverage, not later than the sixtieth day before the date the modification is effective.4
* * *5
§1074. Guaranteed renewability of individual health insurance coverage6
* * *7
D. At the time of coverage renewal, a A health insurance issuer may modify8
the health insurance coverage for a policy form offered to individuals in the9
individual market so long as if each of the following conditions is met:10
(1) The modification occurs at the time of coverage renewal. 11
(2) such The modification is approved by the commissioner, is consistent12
with state law, and is effective on a uniform basis among all individuals with that13
policy form.14
(3) The issuer notifies, on a form approved by the Department of Insurance,15
each affected individual of the modification, including modification of coverage of16
a particular product or modification of drug coverage, not later than the sixtieth day17
before the date the modification is effective.18
* * *19
Section 2. This Act shall apply only to a health benefit plan, group health plan, or20
individual health insurance policy delivered, issued for delivery, or renewed on or after21
January 1, 2012.22
Section 3. This Act shall become effective on January 1, 2012.23
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: