EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LA W.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0785*
HOUSE BILL 785
J5, J4 3lr1212
CF SB 515
By: Delegates S. Johnson and White, White, Alston, Bagnall, Bhandari, Chisholm,
Cullison, Guzzone, Hill, Hutchinson, Kaiser, Kerr, R. Lewis, Lopez,
Martinez, M. Morgan, Pena–Melnyk, Reilly, Rosenberg, Szeliga, Taveras,
and Woods
Introduced and read first time: February 8, 2023
Assigned to: Health and Government Operations
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 10, 2023
CHAPTER ______
AN ACT concerning 1
Health Insurance – Step Therapy or Fail–First Protocol and Prior Authorization 2
– Revisions 3
FOR the purpose of prohibiting certain insurers, nonprofit health service plans, and health 4
maintenance organizations from imposing a step therapy or fail–first protocol on an 5
insured or an enrollee for certain prescription drugs used to treat a certain mental 6
disorder or condition; requiring certain insurers, nonprofit health service plans, or 7
health maintenance organizations to establish a certain process for requesting an 8
exception to a step therapy or fail–first protocol; prohibiting certain insurers, 9
nonprofit health service plans, health maintenance organizations, and pharmacy 10
benefits managers from requiring more than a certain number of prior 11
authorizations for a prescription for different dosages of the same prescription drug; 12
requiring a private review agent to make a determination on a step therapy 13
exception request or prior authorization request submitted electronically within a 14
certain period of time; and generally relating to step therapy or fail–first protocols 15
and prior authorizations and health insurance. 16
BY repealing and reenacting, with amendments, 17
Article – Insurance 18
Section 15–142 and 15–10B–06(a) 19
Annotated Code of Maryland 20
(2017 Replacement Volume and 2022 Supplement) 21 2 HOUSE BILL 785
BY repealing and reenacting, without amendments, 1
Article – Insurance 2
Section 15–854(a) 3
Annotated Code of Maryland 4
(2017 Replacement Volume and 2022 Supplement) 5
BY adding to 6
Article – Insurance 7
Section 15–854(g) 8
Annotated Code of Maryland 9
(2017 Replacement Volume and 2022 Supplement) 10
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12
Article – Insurance 13
15–142. 14
(a) (1) In this section the following words have the meanings indicated. 15
(2) “Step therapy drug” means a prescription drug or sequence of 16
prescription drugs required to be used under a step therapy or fail–first protocol. 17
(3) “STEP THERAPY EXCEPTIO N REQUEST” MEANS A REQUEST TO 18
OVERRIDE A STEP THER APY OR FAIL–FIRST PROTOCOL . 19
[(3)] (4) (I) “Step therapy or fail–first protocol” means a protocol 20
established by an insurer, a nonprofit health service plan, or a health maintenance 21
organization that requires a prescription drug or sequence of prescription drugs to be used 22
by an insured or an enrollee before a prescription drug ordered by a prescriber for the 23
insured or the enrollee is covered. 24
(II) “STEP THERAPY OR FAIL –FIRST PROTOCOL ” INCLUDES A 25
PROTOCOL THAT MEETS THE DEFINITION UNDER SUBPARAGRAPH (I) OF THIS 26
PARAGRAPH REGARDLESS OF THE NAME , LABEL, OR TERMINOLOGY USED BY THE 27
INSURER, NONPROFIT HEALTH SER VICE PLAN, OR HEALTH MAINTENANCE 28
ORGANIZATION TO IDEN TIFY THE PROTOCOL . 29
[(4)] (5) “Supporting medical information” means: 30
(i) a paid claim from an entity subject to this section for an insured 31
or an enrollee; 32
HOUSE BILL 785 3
(ii) a pharmacy record that documents that a prescription has been 1
filled and delivered to an insured or an enrollee, or a representative of an insured or an 2
enrollee; or 3
(iii) other information mutually agreed on by an entity subject to this 4
section and the prescriber of an insured or an enrollee. 5
(b) (1) This section applies to: 6
(i) insurers and nonprofit health service plans that provide hospital, 7
medical, or surgical benefits to individuals or groups on an expense–incurred basis under 8
health insurance policies or contracts that are issued or delivered in the State; and 9
(ii) health maintenance organizations that provide hospital, 10
medical, or surgical benefits to individuals or groups under contracts that are issued or 11
delivered in the State. 12
(2) An insurer, a nonprofit health service plan, or a health maintenance 13
organization that provides coverage for prescription drugs through a pharmacy benefits 14
manager is subject to the requirements of this section. 15
(c) An entity subject to this section may not impose a step therapy or fail–first 16
protocol on an insured or an enrollee if: 17
(1) the step therapy drug has not been approved by the U.S. Food and Drug 18
Administration for the medical condition being treated; or 19
(2) a prescriber provides supporting medical information to the entity that 20
a prescription drug covered by the entity: 21
(i) was ordered by a prescriber for the insured or enrollee within the 22
past 180 days; and 23
(ii) based on the professional judgment of the prescriber, was 24
effective in treating the insured’s or enrollee’s disease or medical condition. 25
(d) Subsection (c) of this section may not be construed to require coverage for a 26
prescription drug that is not: 27
(1) covered by the policy or contract of an entity subject to this section; or 28
(2) otherwise required by law to be covered. 29
(e) An entity subject to this section may not impose a step therapy or fail–first 30
protocol on an insured or an enrollee for a prescription drug approved by the U.S. Food and 31
Drug Administration if: 32
4 HOUSE BILL 785
(1) (I) the prescription drug is used to treat the insured’s or enrollee’s 1
stage four advanced metastatic cancer; and 2
[(2)] (II) use of the prescription drug is: 3
[(i)] 1. consistent with the U.S. Food and Drug 4
Administration–approved indication or the National Comprehensive Cancer Network 5
Drugs & Biologics Compendium indication for the treatment of stage four advanced 6
metastatic cancer; and 7
[(ii)] 2. supported by peer–reviewed medical literature; OR 8
(2) THE PRESCRIPTION DRU G IS USED TO TREAT T HE INSURED’S OR 9
ENROLLEE’S MENTAL DISORDER OR CONDI TION, AS DEFINED IN THE CU RRENT 10
DIAGNOSTIC AND STATISTICAL MANUAL OF MENTAL DISORDERS PUBLISHED B Y 11
THE AMERICAN PSYCHIATRIC ASSOCIATION, THAT RESULTS IN A SE RIOUS 12
FUNCTIONAL IMPAIRMEN T THAT SUBSTANTIALLY INTERFERES WITH OR L IMITS ONE 13
OR MORE MAJOR LIFE ACTI VITIES. 14
(F) (1) AN ENTITY SUBJECT TO THIS SECTION SHALL E STABLISH A 15
PROCESS FOR REQUESTI NG AN EXCEPTION TO A STEP THERAPY OR FAIL –FIRST 16
PROTOCOL THAT IS : 17
(I) CLEARLY DESCRIBED , INCLUDING THE SPECIF IC 18
INFORMATION AND DOCU MENTATION, IF NEEDED, THAT MUST BE SUBMITT ED BY 19
THE PRESCRIBER TO BE CON SIDERED A COMPLETE S TEP THERAPY EXCEPTIO N 20
REQUEST; 21
(II) EASILY ACCESSIBLE TO THE PRESCRIBER ; AND 22
(III) POSTED ON THE ENTITY ’S WEBSITE. 23
(2) A STEP THERAPY EXCEPTI ON REQUEST SHALL BE GRANTED IF, 24
BASED ON THE PROFESS IONAL JUDGMENT OF TH E PRESCRIBER AND ANY 25
INFORMATION AND DOCU MENTATION REQUIRED U NDER PARAGRAPH (1)(I) OF THIS 26
SUBSECTION: 27
(I) THE STEP THERAPY DRU G IS CONTRAINDICATED OR WILL 28
LIKELY CAUSE AN ADVE RSE REACTION, PHYSICAL HA RM, OR MENTAL HARM TO THE 29
INSURED OR ENROLLEE ; 30
(II) THE STEP THERAPY DRU G IS EXPECTED TO BE INEFFECTIVE 31
BASED ON THE KNOWN C LINICAL CHARACTERIST ICS OF THE INSURED O R ENROLLEE 32
AND THE KNOWN CHARAC TERISTICS OF THE PRE SCRIPTION DRUG REGIM EN; 33
HOUSE BILL 785 5
(III) THE INSURED OR ENROLLEE IS STABLE ON A PRESC RIPTION 1
DRUG PRESCRIBED FOR THE MEDICAL CONDITIO N UNDER CONSIDERATIO N WHILE 2
COVERED UNDER THE PO LICY OR CONTRACT OF THE ENTITY OR UNDER A PREVIOUS 3
SOURCE OF COVERAGE ; OR 4
(IV) WHILE COVERED UNDER THE POLICY OR CO NTRACT OF THE 5
ENTITY OR A PREVIOUS SOURCE OF COVERAGE , THE INSURED OR ENROL LEE HAS 6
TRIED A PRESCRIPTION DRUG THAT: 7
1. IS IN THE SAME PHARM ACOLOGIC CLASS OR HA S THE 8
SAME MECHANISM OF AC TION AS THE STEP THE RAPY DRUG; AND 9
2. WAS DISCONTINUED BY THE PRESCRIBER DUE T O 10
LACK OF EFFICACY OR EFFECTIVENESS , DIMINISHED EFFECT , OR AN ADVERSE 11
EVENT. 12
(3) AN INSURED OR ENROLLE E MAY APPEAL THE DEC ISION TO DENY 13
A STEP THERAPY EXCEP TION REQUEST UNDER T HIS SECTION. 14
(4) (I) A STEP THERAPY EXCEPTION REQUES T OR APPEAL SHALL 15
BE GRANTED: 16
1. IN REAL TIME IF NO A DDITIONAL INFORMATIO N IS 17
NEEDED BY THE ENTITY TO PROCESS THE REQUE ST AND THE REQUEST M EETS THE 18
ENTITY’S CRITERIA FOR APPRO VAL; OR 19
2. IF ADDITIONAL INFORM ATION IS NEEDED BY T HE 20
ENTITY TO PROCESS TH E REQUEST AND THE RE QUEST IS NOT URGENT , WITHIN 1 21
BUSINESS DAY AFTER T HE ENTITY RECEIVES A LL RELEVANT INFORMAT ION NEEDED 22
TO PROCESS THE REQUE ST. 23
(II) IF AN ENTITY SUBJECT TO THIS SECTION DOES NOT GRANT 24
OR DENY A STEP THERA PY EXCEPTION REQUEST OR AN APPEAL WITHIN THE TI ME 25
PERIOD REQUIRED UNDE R SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE REQUEST 26
OR APPEAL SHALL BE T REATED AS GRANTED . 27
(3) ON GRANTING A STEP TH ERAPY EXCEPTION REQU EST, AN ENTITY 28
SUBJECT TO THIS SECT ION SHALL AUTHORIZE COVERAGE FOR THE PRE SCRIPTION 29
DRUG ORDERED BY THE PRESCRIBER FOR AN IN SURED OR ENROLLEE . 30
(4) AN ENROLLEE OR INSURE D MAY APPEAL A STEP THERAPY 31
EXCEPTION REQUEST DE NIAL IN ACCORDANCE W ITH SUBTITLE 10A OR SUBTITLE 32
10B OF THIS TITLE. 33
6 HOUSE BILL 785
(5) THIS SUBSECTION MAY NOT BE CONSTRUED TO PREVENT: 1
(I) PREVENT: 2
1. AN ENTITY SUBJECT TO THIS SECTION FROM 3
REQUIRING AN INSURED OR ENROLLEE TO TRY A N AB–RATED GENERIC 4
EQUIVALENT OR INTERC HANGEABLE BIOLOGICAL PRODUCT BEFORE PROVI DING 5
COVERAGE FOR THE EQU IVALENT BRANDED PRESCRIPTION DRUG; OR 6
(II) 2. A HEALTH CARE PROVID ER FROM PRESCRIBING A 7
PRESCRIPTION DRUG TH AT IS DETERMINED TO BE MEDICALLY APPROPR IATE; OR 8
(II) REQUIRE AN ENTITY SU BJECT TO THIS SECTIO N TO 9
PROVIDE COVERAGE FOR A PRESCRIPTION DRUG THAT IS NOT COVERED BY A 10
POLICY OR CONTRACT O F THE ENTITY. 11
(6) AN ENTITY SUBJECT TO THIS SECTION MAY USE AN EXISTING STEP 12
THERAPY EXCEPTION PR OCESS THAT SATISFIES THE REQUIREMENTS UND ER THIS 13
SUBSECTION. 14
15–854. 15
(a) (1) This section applies to: 16
(i) insurers and nonprofit health service plans that provide coverage 17
for prescription drugs through a pharmacy benefit under individual, group, or blanket 18
health insurance policies or contracts that are issued or delivered in the State; and 19
(ii) health maintenance organizations that provide coverage for 20
prescription drugs through a pharmacy benefit under individual or group contracts that 21
are issued or delivered in the State. 22
(2) An insurer, a nonprofit health service plan, or a health maintenance 23
organization that provides coverage for prescription drugs through a pharmacy benefits 24
manager or that contracts with a private review agent under Subtitle 10B of this article is 25
subject to the requirements of this section. 26
(3) This section does not apply to a managed care organization as defined 27
in § 15–101 of the Health – General Article. 28
(G) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 29
AN ENTITY SUBJECT TO THIS SECTION MAY NOT REQUIRE MORE THAN ON E PRIOR 30
AUTHORIZATION IF TWO OR MORE TABLETS OF DIFFERENT DOSAGE STRENGTHS OF 31
THE SAME PRESCRIPTIO N DRUG ARE: 32
HOUSE BILL 785 7
(I) PRESCRIBED AT THE SA ME TIME AS PART OF A N INSURED’S 1
TREATMENT PLAN ; AND 2
(II) MANUFACTURED BY THE SAME MANUFACTURER . 3
(2) THIS SUBSECTION DOES NOT PROHIBIT AN ENTI TY FROM 4
REQUIRING MORE THAN ONE PRIOR AUTHORIZAT ION IF THE PRESCRIPT ION IS FOR 5
TWO OR MORE TABLETS OF DIFFERENT DOSAGE STRENGTHS OF AN OPIO ID THAT IS 6
NOT AN OPIOID PARTIA L AGONIST. 7
15–10B–06. 8
(a) (1) [A] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 9
SUBSECTION, A private review agent shall: 10
(i) make all initial determinations on whether to authorize or certify 11
a nonemergency course of treatment for a patient within 2 working days after receipt of the 12
information necessary to make the determination; 13
(ii) make all determinations on whether to authorize or certify an 14
extended stay in a health care facility or additional health care services within 1 working 15
day after receipt of the information necessary to make the determination; and 16
(iii) promptly notify the health care provider of the determination. 17
(2) If within 3 calendar days after receipt of the initial request for health 18
care services the private review agent does not have sufficient information to make a 19
determination, the private review agent shall inform the health care provider that 20
additional information must be provided. 21
(3) If a private review agent requires prior authorization for an emergency 22
inpatient admission, or an admission for residential crisis services as defined in § 15–840 23
of this title, for the treatment of a mental, emotional, or substance abuse disorder, the 24
private review agent shall: 25
(i) make all determinations on whether to authorize or certify an 26
inpatient admission, or an admission for residential crisis services as defined in § 15–840 27
of this title, within 2 hours after receipt of the information necessary to make the 28
determination; and 29
(ii) promptly notify the health care provider of the determination. 30
(4) FOR A STEP THERAPY EX CEPTION REQUEST SUBM ITTED 31
ELECTRONICALLY IN ACCOR DANCE WITH A PROCESS ESTABLISHED UNDER § 32
15–142(F) OF THIS TITLE OR A P RIOR AUTHORIZATION R EQUEST SUBMITTED 33 8 HOUSE BILL 785
ELECTRONICALLY FOR P HARMACEUTICAL SERVIC ES, A PRIVATE REVIEW AGE NT 1
SHALL MAKE A DETERMI NATION: 2
(I) IN REAL TIME IF: 3
1. NO ADDITIONAL INFORM ATION IS NEEDED BY T HE 4
PRIVATE REVIEW AGENT TO PROCESS THE REQUE ST; AND 5
2. THE REQUEST MEETS TH E PRIVATE REVIEW AGE NT’S 6
CRITERIA FOR APPROVA L; OR 7
(II) IF A REQUEST IS NOT APPROVED UNDER ITEM (I) OF THIS 8
PARAGRAPH , WITHIN 1 BUSINESS DAY AFTER THE PRIVATE REVIEW AGENT 9
RECEIVES ALL OF THE INFORMATION NECESSAR Y TO MAKE THE DETERM INATION. 10
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 11
policies, contracts, and health benefit plans issued, delivered, or renewed in the State on or 12
after January 1, 2024. 13
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take e ffect 14
January 1, 2024. 15
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.