SB 307

UNOFFICIAL COPY  26 RS BR 1406
1AN ACT relating to step therapy protocols.
2 Be it enacted by the General Assembly of the Commonwealth of Kentucky:
3Section 1. KRS 304.17A-163 is amended to read as follows:
4 (1)    As used in this section and KRS 304.17A-1631, unless the context requires
5otherwise:
6(a)    "Clinical practice guidelines" means a systematically developed statement to
7assist decision making by health care providers and patients about appropriate
8healthcare for specific clinical circumstances and conditions;
9(b)    "Clinical review criteria" means the written screening procedures, decision
10abstracts, clinical protocols, and clinical practice guidelines used by the
11insurer, health plan, pharmacy benefit manager, or private review agent to
12determine the medical necessity and appropriateness of health care services;
13(c)    "Health plan":
141.  Means any state-regulated policy, certificate, contract, or plan that offers
15or provides coverage in this state[, by direct payment, reimbursement, or
16otherwise,] for prescription drugs pursuant to a step therapy protocol,
17regardless of whether:
18a.   The step therapy protocol is described as a step therapy protocol;
19or
20b.   The coverage is provided:
21i.    By direct payment, reimbursement, or otherwise; or
22ii.   On a fully insured or self-insured basis or any combination
23thereof; and
242.  Shall include but not be limited to a health benefit plan;
25(d)    "Pharmacy benefit manager" has the same meaning as in KRS 304.9-020;
26(e)    "Private review agent" has the same meaning as in KRS 304.17A-600;
27(f)    "Step therapy exception" means a determination that a step therapy protocol
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1should be overridden in favor of immediate coverage of the health care
2provider's selected prescription drug; and
3(g)    "Step therapy protocol" means a protocol, policy, or program that establishes
4the specific sequence in which prescription drugs that are for a specified
5medical condition and medically appropriate for a particular insured are
6covered by an insurer or health plan.
7 (2)    (a)    Except as provided in paragraph (b) of this subsection, clinical review criteria
8developed by an insurer, health plan, pharmacy benefit manager, or private
9review agent to establish a step therapy protocol shall be based on clinical
10practice guidelines that:
111.  Recommend that prescription drugs be taken in the specific sequence
12required by the step therapy protocol;
132.  Are developed and endorsed by a multidisciplinary panel of experts that
14manages conflicts of interest among the members of the writing and
15review groups by:
16a.   Requiring members to:
17i.    Disclose any potential conflict of interests with entities,
18including    insurers,     health   plans,   and   pharmaceutical
19manufacturers; and
20ii.   Recuse himself or herself from voting if the member has a
21conflict of interest;
22b.   Using a methodologist to work with writing groups to provide
23objectivity in data analysis and ranking of evidence through the
24preparation of evidence tables and facilitating consensus; and
25c.   Offering opportunities for public review and comments;
263.  Are based on high quality studies, research, and medical practice;
274.  Are created by an explicit and transparent process that:
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1a.   Minimizes biases and conflicts of interest;
2b.   Explains the relationship between treatment options and outcomes;
3c.   Rates the quality of the evidence supporting recommendations;
4and
5d.   Considers relevant patient subgroups and preferences; and
65.  Are continually updated through a review of new evidence, research,
7and newly developed treatments.
8(b)    In the absence of clinical practice guidelines that meet the requirements of
9paragraph (a) of this subsection, an insurer, health plan, pharmacy benefit
10manager, or private review agent may use peer-reviewed publications to
11establish step therapy protocols.
12(c)    When establishing clinical review criteria for a step therapy protocol, an
13insurer, health plan, pharmacy benefit manager, or private review agent shall
14take into account the needs of atypical patient populations and diagnoses.
15(d)    1.  An insurer, health plan, pharmacy benefit manager, or private review
16agent shall, upon written request, provide all specific written clinical
17review criteria relating to a particular condition or disease, including
18clinical review criteria relating to a step therapy exception
19determination.
202.  The clinical review criteria and other clinical information shall be made
21available:
22a.   On the insurer's, health plan's, pharmacy benefit manager's, or
23private review agent's website; and
24b.   To a health care professional on behalf of an insured upon written
25request.
26(e)    Nothing in this subsection shall be construed to require an insurer, health plan,
27pharmacy benefit manager, or private review agent to establish a new entity to
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1develop clinical review criteria used for step therapy protocols.
2 (3)    (a)    When coverage of a prescription drug for the treatment of any medical
3condition is restricted for use by an insurer, health plan, private review agent,
4or a pharmacy benefit manager by a step therapy protocol, the insured and
5prescribing provider shall have access to a clear, readily accessible, and
6convenient process to request a step therapy exception.
7(b)    To satisfy the requirements of paragraph (a) of this subsection and subject
8to paragraph (d) of this subsection, an insurer, health plan, private review
9agent, or pharmacy benefit manager shall:
101.  [May use its existing medical exceptions process to satisfy the
11requirements of paragraph (a) of this subsection;
122.  Shall ]Make the step therapy protocol, including:
13a.   All rules and criteria related to the step therapy protocol; and
14b.   The specific information and documentation that must be
15submitted by a prescribing provider or insured to be considered a
16complete request for a step therapy exception;
17easily accessible on its website; and
182.[3.]  On or before January 1, 2027, ensure that the electronic process
19for requesting and transmitting prior authorization for a drug
20required under KRS 304.17A-167 includes the ability for prescribing
21providers to electronically transmit a complete request for a step
22therapy exception to the insurer, health plan, private review agent, or
23pharmacy benefit manager.
24(c)    The process required under paragraph (b)2. of this subsection shall:
251.  Be integrated;
262.  Include an electronic list of the grounds for granting a step therapy
27exception request, which shall include the grounds set forth in
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1subsection (4)(a)2. of this section; and
23.  Allow a prescribing provider to submit:
3a.   The grounds for a step therapy exception request by
4electronically selecting one (1) or more options from the list
5required under subparagraph 2. of this paragraph;
6b.   All necessary information required under subsection (4)(a)1. of
7this section; and
8c.   All additional or clinically relevant information required under
9subsection (4)(b)2. of this section[Shall, upon request, disclose all
10rules and criteria related to the step therapy protocol to all
11prescribing providers, including the specific information and
12documentation that must be submitted by a prescribing provider or
13insured to be considered a complete request for a step therapy
14exception].
15(d)    Paragraph (b)2. of this subsection shall apply to Medicaid and KCHIP
16benefits as provided in KRS 205.522 and 205.6485 to the extent authorized
17by federal law.
18 (4)    (a)    A step therapy exception request, or an internal appeal under KRS 304.17A-
19617 of a step therapy exception request denial, shall be granted by the insurer,
20health plan, private review agent, or the pharmacy benefit manager within
21forty-eight (48) hours if:
221.  All necessary information to perform the step therapy exception review,
23or make the appeal determination, has been provided; and
242.  One (1) of the following apply:
25a.   The required prescription drug is:
26i.    Contraindicated or will likely cause an adverse reaction by
27physical or mental harm to the insured; or
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1ii.    Expected to be ineffective based on the known clinical
2characteristics of the insured and the prescription drug
3regimen;
4b.   Based on clinical appropriateness, the required prescription drug is
5not in the best interest of the insured because the insured's use of
6the required prescription drug is expected to:
7i.     Cause a significant barrier to the insured's adherence to or
8compliance with the insured's plan of care;
9ii.    Worsen a comorbid condition of the insured; or
10iii.   Decrease the insured's ability to achieve or maintain
11reasonable functional ability in performing daily activities;
12c.   The insured has tried the required prescription drug while under
13the insured's current or a previous health plan, or another
14prescription drug in the same pharmacologic class or with the
15same mechanism of action, and the prescription drug was
16discontinued due to lack of efficacy or effectiveness, diminished
17effect, or an adverse event; or
18d.   The insured is stable on the prescription drug selected by the
19insured's health care provider for the medical condition under
20consideration while under a current or previous health plan.
21(b)    If a request for a step therapy exception, or an internal appeal under KRS
22304.17A-617 of a step therapy exception request denial, is incomplete or
23additional clinically relevant information is required, the insurer, health plan,
24pharmacy benefit manager, or private review agent shall notify the prescribing
25provider within forty-eight (48) hours of submission of the request or appeal:
261.  That the request or appeal is incomplete; and
272.  What additional or clinically relevant information is required in order to
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1approve or deny the step therapy exception.
2 (5)    If a step therapy exception request determination, notification under subsection
3(4)(b) of this section, or internal appeal determination under KRS 304.17A-617 of a
4step therapy exception request denial by an insurer, health plan, pharmacy benefit
5manager, or private review agent is not received by the prescribing provider within
6the time period specified in subsection (4) of this section, the step therapy exception
7request or internal appeal shall be deemed granted.
8 (6)    An insured or a provider may:
9(a)    Initiate an internal appeal under KRS 304.17A-617 upon the denial of a step
10therapy exception request under this section; and
11(b)    Request an external review under KRS 304.17A-623 upon the denial of an
12internal appeal under paragraph (a) of this subsection.
13 (7)    (a)    Subject to paragraph (b) of this subsection, an insurer, health plan, pharmacy
14benefit manager, or private review agent[ shall]:
151.[(a)]  [Upon the granting of a step therapy exception request, internal
16appeal, or external review, authorize]Shall begin coverage for the
17prescription drug selected by the insured's health care provider on the
18date the provider submits a step therapy exception request;[ or]
192.[(b)]  May terminate coverage for the prescription drug selected by the
20insured's health care provider:
21a.   Upon the denial of a step therapy exception request; or
22b.   Forty-eight (48) hours after the notification required under
23subsection (4)(b) of this section is provided to the insured's
24health care provider if the provider has not submitted the
25additional or clinically relevant information required in the
26notification; and
273.  Upon the denial of a step therapy exception request or internal appeal,
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1shall:
2a.   Inform the insured of the internal appeal or external review
3process, as applicable; and
4b.   Not retroactively deny, reduce payment for, or seek any refunds
5or recoupments for coverage previously provided under this
6subsection for a prescription drug.
7(b)    Paragraph (a) of this subsection shall apply to Medicaid and KCHIP
8benefits as provided in KRS 205.522 and 205.6485 to the extent authorized
9by federal law.
10 (8)    (a)    Except as provided in paragraph (b) of this subsection, the duration of any
11step therapy protocol shall not be longer than a period of thirty (30) days if the
12treatment is deemed and documented as clinically ineffective by the
13prescribing provider.
14(b)    When the prescribing provider can demonstrate, through sound clinical
15evidence, that the originally prescribed medication is likely to require more
16than thirty (30) days to provide any relief or an amelioration to the insured,
17the step therapy protocol may be extended up to seven (7) additional days.
18 (9)    Nothing in this section shall be construed to prevent:
19(a)    An insurer, health plan, pharmacy benefit manager, or private review agent
20from requiring an insured to try:
211.  An AB-rated generic equivalent prior to providing coverage for the
22reference listed drug;
232.  An interchangeable biological product, as defined in 42 U.S.C. sec.
24262(i)(3), prior to providing coverage for the reference product; or
253.  A biosimilar biological product, as defined in 42 U.S.C. sec. 262(i)(2),
26prior to providing coverage for the reference product;
27unless the requirement meets any of the criteria set forth in subsection (4)(a)2.
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1of this section pursuant to a step therapy exception request submitted under
2subsection (4) of this section;
3(b)    An insurer, health plan, pharmacy benefit manager, or private review agent
4from requiring a pharmacist to effect substitutions of prescription drugs
5consistent with KRS 217.814 to 217.896 and 304.17A-535; or
6(c)    A health care provider from prescribing a prescription drug that is determined
7to be medically appropriate.
8Section 2. If the Cabinet for Health and Family Services or the Department for
9 Medicaid Services determines that a state plan amendment, waiver, or any other form of
10 authorization or approval from any federal agency to implement Section 1 of this Act is
11 necessary to prevent the loss of federal funds or to comply with federal law, the cabinet
12 or department:
13(1)    Shall, within 90 days after the effective date of this section, request the
14 necessary federal authorization or approval to implement Section 1 of this Act; and
15(2)    May only delay implementation of the provisions of Section 1 of this Act for
16 which federal authorization or approval was deemed necessary until the federal
17 authorization or approval is granted.
18Section 3. Sections 1 and 2 of this Act, and KRS 205.522 and 205.6485 shall
19 constitute the specific authorization required under KRS 205.5372(1).
20Section 4. This Act applies to policies, certificates, contracts, and plans issued
21 or renewed on or after the effective date of this Act.
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