H.F. 2376 Section 1. NEW SECTION . 505.26 Prior authorization for 1 prescription drug benefits —— standard process and form. 2 1. As used in this section: 3 a. “Facility” means an institution providing health care 4 services or a health care setting, including but not limited 5 to hospitals and other licensed inpatient centers, ambulatory 6 surgical or treatment centers, skilled nursing centers, 7 residential treatment centers, diagnostic, laboratory, and 8 imaging centers, and rehabilitation and other therapeutic 9 health settings. 10 b. “Health benefit plan” means a policy, contract, 11 certificate, or agreement offered or issued by a health carrier 12 to provide, deliver, arrange for, pay for, or reimburse any of 13 the costs of health care services. 14 c. “Health care professional” means a physician or other 15 health care practitioner licensed, accredited, registered, or 16 certified to perform specified health care services consistent 17 with state law. 18 d. “Health care provider” means a health care professional 19 or a facility. 20 e. “Health care services” means services for the diagnosis, 21 prevention, treatment, cure, or relief of a health condition, 22 illness, injury, or disease. 23 f. “Health carrier” means an entity subject to the insurance 24 laws of this state, or subject to the jurisdiction of the 25 commissioner, including an insurance company offering sickness 26 and accident plans, a health maintenance organization, a 27 nonprofit health service corporation, a plan established 28 pursuant to chapter 509A for public employees, or any other 29 entity providing a plan of health insurance, health care 30 benefits, or health care services. “Health carrier” includes, 31 for purposes of this section, an organized delivery system. 32 g. “Pharmacy benefits manager” means the same as defined in 33 section 510B.1. 34 2. The commissioner shall develop, by rule, a standard prior 35 -1- LSB 6145HV (2) 85 rj/rj 1/ 4

H.F. 2376 authorization process and form for use by health carriers and 1 pharmacy benefits managers that require prior authorization for 2 prescription drug benefits pursuant to a health benefit plan, 3 by January 1, 2015. 4 3. Prior to development of the standard prior authorization 5 process and form, the commissioner shall hold at least one 6 public hearing to gather input in developing the standard 7 process and form from interested parties. 8 4. The standard prior authorization process shall meet all 9 of the following requirements: 10 a. Health carriers and pharmacy benefits managers shall 11 allow health care providers to submit a prior authorization 12 request electronically. 13 b. Health carriers and pharmacy benefits managers shall 14 provide that approval of a prior authorization request shall be 15 valid for a minimum of one hundred eighty days. 16 c. Health carriers and pharmacy benefits managers shall 17 ensure that the prior authorization process allows a health 18 carrier or pharmacy benefits manager to substitute a generic 19 drug for a previously approved brand-name drug with the health 20 care provider’s approval and the patient’s consent. 21 d. Health carriers and pharmacy benefits managers shall make 22 the following available and accessible on their internet sites: 23 (1) Prior authorization requirements and restrictions, 24 including a list of drugs that require prior authorization. 25 (2) Clinical criteria that are easily understandable 26 to health care providers, including clinical criteria for 27 reauthorization of a previously approved drug after the prior 28 authorization period has expired. 29 (3) Standards for submitting and considering requests, 30 including evidence-based guidelines, when possible, for making 31 prior authorization determinations. 32 e. Health carriers and pharmacy benefits managers shall 33 provide a process for health care providers to appeal a prior 34 authorization determination. 35 -2- LSB 6145HV (2) 85 rj/rj 2/ 4

H.F. 2376 5. The standard prior authorization form shall meet all of 1 the following requirements: 2 a. Not exceed two pages in length. 3 b. Be available in an electronic format. 4 c. Be transmissible in an electronic format. 5 6. Health carriers and pharmacy benefits managers shall use 6 and accept the standard prior authorization form beginning on 7 July 1, 2015. Health care providers shall use and submit the 8 standard prior authorization form, when prior authorization is 9 required by a health benefit plan, beginning on July 1, 2015. 10 7. a. If a health carrier or pharmacy benefits manager 11 fails to use or accept the standard prior authorization form 12 or to respond to a health care provider’s request for prior 13 authorization of prescription drug benefits within seventy-two 14 hours of the health care provider’s submission of the form, 15 the request for prior authorization shall be considered to be 16 approved. 17 b. However, if the prior authorization request is 18 incomplete, the health carrier or pharmacy benefits manager may 19 request the additional information within the seventy-two-hour 20 period and once the additional information is provided the 21 provisions of paragraph “a” shall again apply. 22 EXPLANATION 23 The inclusion of this explanation does not constitute agreement with 24 the explanation’s substance by the members of the general assembly. 25 This bill requires the development and use of a standard 26 process and form to obtain prior authorization for prescription 27 drug benefits under a health benefit plan. 28 The bill requires the commissioner of insurance to develop, 29 by rule, a standard process and form by January 1, 2015. 30 Before developing the process and form, the commissioner is 31 required to hold at least one public hearing to obtain input 32 from interested parties. The form must not exceed two pages in 33 length and must be available and transmissible in an electronic 34 format. 35 -3- LSB 6145HV (2) 85 rj/rj 3/ 4

H.F. 2376 Health carriers are defined as all types of entities 1 providing health insurance or health benefit coverages and 2 pharmacy benefits managers are defined as an entity providing 3 prescription drug benefit management services to all types 4 of entities providing health insurance or health benefit 5 coverages, including employers and unions. Health carriers and 6 pharmacy benefits managers are required to use and accept the 7 standard prior authorization form, and health care providers 8 are required to use and submit the form, beginning on July 1, 9 2015. If a health carrier fails to use or accept the standard 10 form or to respond to a health care provider’s request for 11 prior authorization of prescription drug benefits within 72 12 hours of the provider’s submission of the form, the request 13 shall be considered to be granted, unless the request is 14 incomplete and additional information is needed to process the 15 request. 16 Health care providers are defined as health care 17 professionals or health care institutions and are required to 18 use and submit the standard prior authorization form, beginning 19 on July 1, 2015. 20 The standard prior authorization process must include 21 the capability of electronic submissions, 180-day prior 22 authorization approvals, substitution of generic drugs, 23 internet access to prior authorization requirements such as 24 listing of drugs and understandable clinical criteria for 25 authorization and reauthorization, and an appeal process. 26 The prior authorization form must not exceed two pages in 27 length and must be available and transmissible in an electronic 28 format. 29 -4- LSB 6145HV (2) 85 rj/rj 4/ 4