Support for Proposed Legislation in California Regarding Prior Authorization

PURPOSE
Prior authorization is a common cost containment method used by health plans and insurers that significantly delays medication accessibility for patients and imposes high costs that negatively impact operating margins for health care providers.  SB 866 streamlines the prior authorization process and improves access to prescription drugs by creating a standardized form for providers to use when making a request for prior authorization.

BACKGROUND
Health plans and insurers require physicians to fill out a prior authorization form when the provider prescribes a medicine or treatment not covered by the plan or insurer’s formulary.  Each health plan and insurer has their own forms for prior authorization.

Prior authorization negatively delays and impacts patient care.
·      A recent survey by the American Medical Association found nearly two-thirds of physicians wait several days to receive prior authorization from an insurer.
·      More than half of physicians experience difficulty obtaining approval from health plans and insurers.
·      A survey of pharmacists found that 61% of pharmacists knew of an incident when the requirement for prior authorization adversely affected patient care.

Prior authorization requires providers to spend excessive time on paperwork that could be spent providing patient care.
·      Physicians spend, on average, 20 hours per week handling prior authorizations. Studies show that navigating the managed care maze cost physicians $23.2-31 billion a year.
·      Pharmacists also find prior authorization time consuming, spending an average of 4.6 hours a week on requests.

Public programs must respond timely to prior authorization requests.
Both federal and state law specifies that the state must respond to prescription drug prior authorization requests under Medi-Cal, the state’s Medicaid program, within 24-hours.

SUMMARY

Under current law, health plans and insurers have five business days to respond to a prior authorization request for prescription drugs.  If the patient faces an imminent and serious threat to his/her health, the plan must respond in 72 hours.  Decisions to approve, modify or deny requests must be communicated within 24 hours of the decision.

This bill would:
·      Direct the Departments of Insurance and Managed Health Care to jointly develop a standardized prior authorization form, with input from stakeholders, by July 2012.
·      Specify that the form cannot exceed two pages and must be electronically available and transmittable.
·      Require health plans and insurers to use the standardized form for all prior authorization requests by January 2013.
·      Specify that if a plan or insurer does not use the form or fails to respond within two business days, the prior authorization is deemed granted.  Exempts Medi-Cal managed care plans from the two business day requirement.
·      Exempt physicians or physician groups who have been delegated the financial risk for prescription drugs by a health plan and does not use a prior authorization process from these requirements.

TARGET LEGISLATORS

Bill Berryhill – Stockton CA
State Capitol, Room 3141
Sacramento, CA 95814
916-319-2026
916-319-2126 fax

SERVING: Ceres, Escalon, Manteca, Modesto, Patterson, Ripon, Stockton, Turlock

Connie Conway –  Visalia CA
State Capitol, Room 3104
Sacramento, CA 95814
(916) 319-2034
(916) 319-2134 fax

SERVING: Baker, Barstow, Bishop, Boron, California City, Exeter, Farmersville, Fort Irwin, Independence, Ivanhoe, Landers, Lindsay, Lone Pine, Lucerne Valley, Mojave, Needles, Newberry Springs, North Edwards, Porterville, Rosamond, Springville, Strathmore, Three Rivers, Tulare, Visalia, Woodlake, Yermo

Paul Cook – Yucaipa CA
State Capitol, Room 5164
Sacramento, CA 95814
916-319-2065
916-319-2165 fax

SERVING:  City of Banning, City of Beaumont, City of Big Bear Lake, City of Calimesa, City of Hemet, City of Menifee, City of Moreno Valley, City of Perris, City of San Jacinto, City of Twentynine Palms, City of Yucaipa, City of Yucca Valley, County of Riverside, County of San Bernardino

Nathan Fletcher – San Diego
State Capitol, Room 2111
Sacramento, CA 95814
916-319-2075
916-319-2175 fax

SERVING:  Escondido, Poway, San Diego

Linda Halderman – Clovis / Fresno
State Capitol, Room 4009
Sacramento, CA 95814
(916) 319-2029
(916) 319-2129 fax

SERVING: Clovis, Fresno, Madera, Orange Cove

Brian Jones – La Mesa / San Diego
State Capitol, Room 3149
Sacramento, CA 95814
(916) 319-2077
(916) 319-2177 fax

SERVING: Alpine, Borrego Springs, Bostonia, Casa de Oro – Mount Helix, Crest, El Cajon, Granite Hills, Harbison Canyon, Jamul, La Mesa, Lakeside, Ramona, Rancho San Diego, San Diego, San Diego Country Estates, Santee, Winter Gardens

Jim Nielson – Colusa, Shasta Counties
State Capitol Room #6031
Sacramento, CA 95814
916-319-2002
916-319-2102 fax

SERVING:  Alturas, Anderson, Arbuckle, Biggs, Burney, Chico, Colusa, Corning, Cottonwood, Dorris, Dunsmuir, Durham, Etna, Fall River Mills, Fort Jones, Gerber, Gridley, Live Oak, McArthur, Montague, Mount Shasta, Orland, Red Bluff, Redding, Shasta Lake City, Tehama, Tulelake, Weed, Williams, Willows, Woodland, Yreka, Yuba City

Kristen Olsen – Modesto
State Capitol, 2111
Sacramento, CA 95814
916-319-2025
916-319-2125 fax

SERVING: Angels Camp, Chowchilla, Hughson, Madera, Mammoth Lakes, Mariposa, Modesto, Oakdale, Riverbank, Sonora, Waterford

David Valadao – Hanford
State Capitol, Room #2174
Sacramento, CA 95814
916-319-2030
916-319-2130 fax

SERVING:  Alpaugh, Armona, Arvin, Avenal, Bakersfield, Coalinga, Corcoran, Delano, Earlimart, Goshen, Hanford, Huron, Kettleman City, Kingsburg, Lamont, Laton, Lemoore, Lost Hills, McFarland, Pixley, Poplar-Cotton Center, Richgrove, Riverdale, Shafter, Stratford, Terra Bella, Tipton, Traver, Wasco, Weedpatch