EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
[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.
*sb0515*
SENATE BILL 515
J5, J4 3lr1591
CF HB 785
By: Senator Lam
Introduced and read first time: February 3, 2023
Assigned to: Finance
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: March 11, 2023
CHAPTER ______
AN ACT concerning 1
Health Insurance – Step Therapy or Fail–First Protocol – Revisions 2
FOR the purpose of prohibiting certain insurers, nonprofit health service plans, and health 3
maintenance organizations from imposing a step therapy or fail–first protocol on an 4
insured or an enrollee for certain prescription drugs used to treat a certain mental 5
disorder or condition; requiring certain insurers, nonprofit health service plans, or 6
health maintenance organizations to establish a certain process for requesting an 7
exception to a step therapy or fail–first protocol; prohibiting certain insurers, 8
nonprofit health service plans, health maintenance organizations, and pharmacy 9
benefits managers from requiring more than a certain number of prior 10
authorizations for a prescription for different dosages of the same prescription drug; 11
requiring a private review agent to make a determination on a step therapy 12
exception request or prior authorization request submitted electronically within a 13
certain period of time; and generally relating to step therapy or fail–first protocols 14
and prior authorizations and health insurance. 15
BY repealing and reenacting, with amendments, 16
Article – Insurance 17
Section 15–142 and 15–10B–06(a) 18
Annotated Code of Maryland 19
(2017 Replacement Volume and 2022 Supplement) 20
BY repealing and reenacting, without amendments, 21
Article – Insurance 22
Section 15–854(a) 23 2 SENATE BILL 515
Annotated Code of Maryland 1
(2017 Replacement Volume and 2022 Supplement) 2
BY adding to 3
Article – Insurance 4
Section 15–854(g) 5
Annotated Code of Maryland 6
(2017 Replacement Volume and 2022 Supplement) 7
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 8
That the Laws of Maryland read as follows: 9
Article – Insurance 10
15–142. 11
(a) (1) In this section the following words have the meanings indicated. 12
(2) “Step therapy drug” means a prescription drug or sequence of 13
prescription drugs required to be used under a step therapy or fail–first protocol. 14
(3) “STEP THERAPY EXCEPTIO N REQUEST” MEANS A REQUEST TO 15
OVERRIDE A STEP THER APY OR FAIL–FIRST PROTOCOL . 16
[(3)] (4) (I) “Step therapy or fail–first protocol” means a protocol 17
established by an insurer, a nonprofit health service plan, or a health maintenance 18
organization that requires a prescription drug or sequence of prescription drugs to be used 19
by an insured or an enrollee before a prescription drug ordered by a prescriber for the 20
insured or the enrollee is covered. 21
(II) “STEP THERAPY OR FAIL –FIRST PROTOCOL ” INCLUDES A 22
PROTOCOL THAT MEETS THE DEFINITION UNDER SUBPARAGRAPH (I) OF THIS 23
PARAGRAPH REGARDLESS OF THE NAME , LABEL, OR TERMINOLOGY USED BY THE 24
INSURER, NONPROFIT HEALTH SER VICE PLAN, OR HEALTH MAINTENANC E 25
ORGANIZATION TO I DENTIFY THE PROTOCOL . 26
[(4)] (5) “Supporting medical information” means: 27
(i) a paid claim from an entity subject to this section for an insured 28
or an enrollee; 29
(ii) a pharmacy record that documents that a prescription has been 30
filled and delivered to an insured or an enrollee, or a representative of an insured or an 31
enrollee; or 32
SENATE BILL 515 3
(iii) other information mutually agreed on by an entity subject to this 1
section and the prescriber of an insured or an enrollee. 2
(b) (1) This section applies to: 3
(i) insurers and nonprofit health service plans that provide hospital, 4
medical, or surgical benefits to individuals or groups on an expense–incurred basis under 5
health insurance policies or contracts that are issued or delivered in the State; and 6
(ii) health maintenance organizations that provide hospital, 7
medical, or surgical benefits to individuals or groups under contracts that are issued or 8
delivered in the State. 9
(2) An insurer, a nonprofit health service plan, or a health maintenance 10
organization that provides coverage for prescription drugs through a pharmacy benefits 11
manager is subject to the requirements of this section. 12
(c) An entity subject to this section may not impose a step therapy or fail–first 13
protocol on an insured or an enrollee if: 14
(1) the step therapy drug has not been approved by the U.S. Food and Drug 15
Administration for the medical condition being treated; or 16
(2) a prescriber provides supporting medical information to the entity that 17
a prescription drug covered by the entity: 18
(i) was ordered by a prescriber for the insured or enrollee within the 19
past 180 days; and 20
(ii) based on the professional judgment of the prescriber, was 21
effective in treating the insured’s or enrollee’s disease or medical condition. 22
(d) Subsection (c) of this section may not be construed to require coverage for a 23
prescription drug that is not: 24
(1) covered by the policy or contract of an entity subject to this section; or 25
(2) otherwise required by law to be covered. 26
(e) An entity subject to this section may not impose a step therapy or fail–first 27
protocol on an insured or an enrollee for a prescription drug approved by the U.S. Food and 28
Drug Administration if: 29
(1) (I) the prescription drug is used to treat the insured’s or enrollee’s 30
stage four advanced metastatic cancer; and 31
[(2)] (II) use of the prescription drug is: 32 4 SENATE BILL 515
[(i)] 1. consistent with the U.S. Food and Drug 1
Administration–approved indication or the National Comprehensive Cancer Network 2
Drugs & Biologics Compendium indication for the treatment of stage four advanced 3
metastatic cancer; and 4
[(ii)] 2. supported by peer–reviewed medical literature; OR 5
(2) THE PRESCRIPTION DRU G IS USED TO TREAT T HE INSURED’S OR 6
ENROLLEE’S MENTAL DISORDER OR CONDITION, AS DEFINED IN THE CURRE NT 7
DIAGNOSTIC AND STATISTICAL MANUAL OF MENTAL DISORDERS PUBLISHED B Y 8
THE AMERICAN PSYCHIATRIC ASSOCIATION, THAT RESULTS IN A SE RIOUS 9
FUNCTIONAL IMPAIRMEN T THAT SUBSTANTIALLY INTERFERES WITH OR L IMITS ONE 10
OR MORE MAJOR LIFE A CTIVITIES. 11
(F) (1) AN ENTITY SUBJECT TO THIS SECTION SHALL E STABLISH A 12
PROCESS FOR REQUESTI NG AN EXCEPTION TO A STEP THERAPY OR FAIL –FIRST 13
PROTOCOL THAT IS : 14
(I) CLEARLY DESCRIBED , INCLUDING THE SPECIF IC 15
INFORMATION AND DOCU MENTATION, IF NEEDED, THAT MUST BE SUBMITTED BY 16
THE PRESCRIBER TO BE CON SIDERED A COMPLETE S TEP THERAPY EXCEPTIO N 17
REQUEST; 18
(II) EASILY ACCESSIBLE TO THE PRESCRIBER ; AND 19
(III) POSTED ON THE ENTITY ’S WEBSITE. 20
(2) A STEP THERAPY EXCEPTI ON REQUEST SHALL BE GRANTED IF, 21
BASED ON THE PR OFESSIONAL JUDGMENT OF THE PRESCRIBER AND ANY 22
INFORMATION AND DOCU MENTATION REQUIRED U NDER PARAGRAPH (1)(I) OF THIS 23
SUBSECTION: 24
(I) THE STEP THERAPY DRU G IS CONTRAINDICATED OR WILL 25
LIKELY CAUSE AN ADVE RSE REACTION, PHYSICAL HARM , OR MENTAL HARM TO THE 26
INSURED OR ENROLLEE ; 27
(II) THE STEP THERAPY DRU G IS EXPECTED TO BE INEFFECTIVE 28
BASED ON THE KNOWN C LINICAL CHARACTERIST ICS OF THE INSURED O R ENROLLEE 29
AND THE KNOWN CHARAC TERISTICS OF THE PRE SCRIPTION DRUG REGIM EN; 30
(III) THE INSURED OR ENROL LEE IS STABLE ON A PRESCRIP TION 31
DRUG PRESCRIBED FOR THE MEDICAL CONDITIO N UNDER CONSIDERATIO N WHILE 32 SENATE BILL 515 5
COVERED UNDER THE PO LICY OR CONTRACT OF THE ENTITY OR UNDER A PREVIOUS 1
SOURCE OF COVERAGE ; OR 2
(IV) WHILE COVERED UNDER THE POLICY OR CONTRA CT OF THE 3
ENTITY OR A PREVIOUS SOURCE OF COVERAGE, THE INSURED OR ENROL LEE HAS 4
TRIED A PRESCRIPTION DRUG THAT: 5
1. IS IN THE SAME PHARM ACOLOGIC CLASS OR HA S THE 6
SAME MECHANISM OF AC TION AS THE STEP THE RAPY DRUG; AND 7
2. WAS DISCONTINUED BY THE PRESCRIBER DUE T O 8
LACK OF EFFICACY OR EFFECT IVENESS, DIMINISHED EFFECT , OR AN ADVERSE 9
EVENT. 10
(3) AN INSURED OR ENROLLE E MAY APPEAL THE DEC ISION TO DENY 11
A STEP THERAPY EXCEP TION REQUEST UNDER T HIS SECTION. 12
(4) (I) A STEP THERAPY EXCEPTI ON REQUEST OR APPEAL SHALL 13
BE GRANTED: 14
1. IN REAL TIME IF NO A DDITIONAL INFORMATIO N IS 15
NEEDED BY THE ENTITY TO PROCESS THE REQUE ST AND THE REQUEST M EETS THE 16
ENTITY’S CRITERIA FOR APPRO VAL; OR 17
2. IF ADDITIONAL INFORM ATION IS NEEDED BY T HE 18
ENTITY TO PROCESS TH E REQUEST AND THE REQUEST IS NOT URGEN T, WITHIN 1 19
BUSINESS DAY AFTER T HE ENTITY RECEIVES A LL RELEVANT INFORMAT ION NEEDED 20
TO PROCESS THE REQUE ST. 21
(II) IF AN ENTITY SUBJECT TO THIS SECTION DOES NOT GRANT 22
OR DENY A STEP THERA PY EXCEPTION REQUEST OR AN APPEAL WITHIN THE TIME 23
PERIOD REQUIRED UNDE R SUBPARAGRAPH (I) OF THIS PARAGRAPH , THE REQUEST 24
OR APPEAL SHALL BE T REATED AS GRANTED . 25
(3) ON GRANTING A STEP TH ERAPY EXCEPTION REQU EST, AN ENTITY 26
SUBJECT TO THIS SECT ION SHALL AUTHORIZE COVERAGE FOR THE PRE SCRIPTION 27
DRUG ORDERED BY THE PRESC RIBER FOR AN INSURED OR ENROLLEE . 28
(4) AN ENROLLEE OR INSURE D MAY APPEAL A STEP THERAPY 29
EXCEPTION REQUEST DE NIAL IN ACCORDANCE W ITH SUBTITLE 10A OR SUBTITLE 30
10B OF THIS TITLE. 31
(5) THIS SUBSECTION MAY N OT BE CONSTRUED TO PREVENT: 32
6 SENATE BILL 515
(I) PREVENT: 1
1. AN ENTITY SUBJECT TO THIS SECTION FROM 2
REQUIRING AN INSURED OR ENROLLEE TO TRY A N AB–RATED GENERIC 3
EQUIVALENT OR INTERC HANGEABLE BIOLOGICAL PRODUCT BEFORE PROVI DING 4
COVERAGE FOR THE EQU IVALENT BRANDED PRES CRIPTION DRUG ; OR 5
(II) 2. A HEALTH CARE PROVID ER FROM PRESCRIBING A 6
PRESCRIPTION DRUG TH AT IS DETERMINED TO BE MEDICALLY APPROPR IATE; OR 7
(II) REQUIRE AN ENTITY SU BJECT TO THIS SECTIO N TO 8
PROVIDE COVERAGE FOR A PRESCRIPTION DRUG THAT IS NOT COVERED BY A 9
POLICY OR CONTRACT O F THE ENTITY. 10
(6) AN ENTITY SUBJECT TO THIS SECTION MAY USE AN EXISTING STEP 11
THERAPY EXCEPTION PR OCESS THAT SATISFIES THE REQUIREMENTS UND ER THIS 12
SUBSECTION. 13
15–854. 14
(a) (1) This section applies to: 15
(i) insurers and nonprofit health service plans that provide coverage 16
for prescription drugs through a pharmacy benefit under individual, group, or blanket 17
health insurance policies or contracts that are issued or delivered in the State; and 18
(ii) health maintenance organizations that provide coverage for 19
prescription drugs through a pharmacy benefit under individual or group contracts that 20
are issued or delivered in the State. 21
(2) An insurer, a nonprofit health service plan, or a health maintenance 22
organization that provides coverage for prescription drugs through a pharmacy benefits 23
manager or that contracts with a private review agent under Subtitle 10B of this article is 24
subject to the requirements of this section. 25
(3) This section does not apply to a managed care organization as defined 26
in § 15–101 of the Health – General Article. 27
(G) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 28
AN ENTITY SUBJECT TO THIS SECTION MAY NOT REQUIRE MORE THAN ON E PRIOR 29
AUTHORIZATION IF TWO OR MORE TABLETS OF D IFFERENT DOSAGE STRE NGTHS OF 30
THE SAME PRESCRIPTION DRUG AR E: 31
(I) PRESCRIBED AT THE SA ME TIME AS PART OF A N INSURED’S 32
TREATMENT PLAN ; AND 33 SENATE BILL 515 7
(II) MANUFACTURED BY THE SAME MANUFACTURER . 1
(2) THIS SUBSECTION DOES NOT PROHIBIT AN ENTI TY FROM 2
REQUIRING MORE THAN ONE PRIOR AUTHORIZAT ION IF THE PRESCRIPTION IS F OR 3
TWO OR MORE TABLETS OF DIFFERENT DOSAGE STRENGTHS OF AN OPIO ID THAT IS 4
NOT AN OPIOID PARTIA L AGONIST. 5
15–10B–06. 6
(a) (1) [A] EXCEPT AS PROVIDED IN PARAGRAPH (4) OF THIS 7
SUBSECTION, A private review agent shall: 8
(i) make all initial determinations on whether to authorize or certify 9
a nonemergency course of treatment for a patient within 2 working days after receipt of the 10
information necessary to make the determination; 11
(ii) make all determinations on whether to authorize or certify an 12
extended stay in a health care facility or additional health care services within 1 working 13
day after receipt of the information necessary to make the determination; and 14
(iii) promptly notify the health care provider of the determination. 15
(2) If within 3 calendar days after receipt of the initial request for health 16
care services the private review agent does not have sufficient information to make a 17
determination, the private review agent shall inform the health care provider that 18
additional information must be provided. 19
(3) If a private review agent requires prior authorization for an emergency 20
inpatient admission, or an admission for residential crisis services as defined in § 15–840 21
of this title, for the treatment of a mental, emotional, or substance abuse disorder, the 22
private review agent shall: 23
(i) make all determinations on whether to authorize or certify an 24
inpatient admission, or an admission for residential crisis services as defined in § 15–840 25
of this title, within 2 hours after receipt of the information necessary to make the 26
determination; and 27
(ii) promptly notify the health care provider of the determination. 28
(4) FOR A STEP THERAPY EX CEPTION REQUEST SUBM ITTED 29
ELECTRONICALLY IN AC CORDANCE WITH A PROC ESS ESTABLI SHED UNDER § 30
15–142(F) OF THIS TITLE OR A P RIOR AUTHORIZATION R EQUEST SUBMITTED 31
ELECTRONICALLY FOR P HARMACEUTICAL SERVIC ES, A PRIVATE REVIEW AGE NT 32
SHALL MAKE A DETERMI NATION: 33
8 SENATE BILL 515
(I) IN REAL TIME IF: 1
1. NO ADDITIONAL INFORM ATION IS NEEDED BY T HE 2
PRIVATE REVIEW AGENT TO PROCESS THE REQUE ST; AND 3
2. THE REQUEST MEETS TH E PRIVATE REVIEW AGE NT’S 4
CRITERIA FOR APPROVA L; OR 5
(II) IF A REQUEST IS NOT APPROVED UNDER ITEM (I) OF THIS 6
PARAGRAPH , WITHIN 1 BUSINESS DAY AFTER T HE PRIVATE REVIEW AG ENT 7
RECEIVES ALL OF THE INF ORMATION NECESSARY T O MAKE THE DETERMINA TION. 8
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 9
policies, contracts, and health benefit plans issued, delivered, or renewed in the State on or 10
after January 1, 2024. 11
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take e ffect 12
January 1, 2024. 13
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.