S.F. _____ Section 1. NEW SECTION . 514F.8 Continuity of care —— 1 nonmedical switching. 2 1. Definitions. For the purpose of this section: 3 a. “Authorized representative” means the same as defined in 4 section 514J.102. 5 b. “Commissioner” means the commissioner of insurance. 6 c. “Cost sharing” means any coverage limit, copayment, 7 coinsurance, deductible, or other out-of-pocket expense 8 requirement. 9 d. “Coverage exemption” means a determination made by a 10 health carrier, health benefit plan, or utilization review 11 organization to cover a prescription drug that is otherwise 12 excluded from coverage. 13 e. “Coverage exemption determination” means a determination 14 made by a health carrier, health benefit plan, or utilization 15 review organization whether to cover a prescription drug that 16 is otherwise excluded from coverage. 17 f. “Covered person” means the same as defined in section 18 514J.102. 19 g. “Discontinued health benefit plan” means a covered 20 person’s existing health benefit plan that is discontinued by a 21 health carrier during open enrollment for the next plan year. 22 h. “Formulary” means a complete list of prescription drugs 23 eligible for coverage under a health benefit plan. 24 i. “Health benefit plan” means the same as defined in 25 section 514J.102. 26 j. “Health care professional” means the same as defined in 27 section 514J.102. 28 k. “Health care services” means the same as defined in 29 section 514J.102. 30 l. “Health carrier” means the same as defined in section 31 514J.102. 32 m. “Nonmedical switching” means a health benefit plan’s 33 restrictive changes to the health benefit plan’s formulary 34 after the current plan year has begun or during the open 35 -1- LSB 5061XC (5) 87 ko/rj 1/ 8

S.F. _____ enrollment period for the upcoming plan year, causing a covered 1 person who is medically stable on the covered person’s current 2 prescribed drug as determined by the prescribing health care 3 professional, to switch to a less costly alternate prescription 4 drug. 5 n. “Open enrollment” means the yearly time period an 6 individual can enroll in a health benefit plan. 7 o. “Utilization review” means the same as defined in 514F.7. 8 p. “Utilization review organization” means the same as 9 defined in 514F.7. 10 2. Nonmedical switching. With respect to a health carrier 11 that has entered into a health benefit plan with a covered 12 person that covers prescription drug benefits, all of the 13 following apply: 14 a. A health carrier, health benefit plan, or utilization 15 review organization shall not limit or exclude coverage of 16 a prescription drug for any covered person who is medically 17 stable on such drug as determined by the prescribing health 18 care professional, if all of the following apply: 19 (1) The prescription drug was previously approved by the 20 health carrier for coverage for the covered person. 21 (2) The covered person’s prescribing health care 22 professional continues to prescribe the drug for the medical 23 condition. 24 (3) The covered person continues to be an enrollee of the 25 health benefit plan. 26 b. Coverage of a covered person’s prescription drug, as 27 described in paragraph “a” , shall continue through the last day 28 of the covered person’s eligibility under the health benefit 29 plan, inclusive of any open enrollment period. 30 c. Prohibited limitations and exclusions referred to in 31 paragraph “a” include but are not limited to the following: 32 (1) Limiting or reducing the maximum coverage of 33 prescription drug benefits. 34 (2) Increasing cost sharing for a covered prescription 35 -2- LSB 5061XC (5) 87 ko/rj 2/ 8

S.F. _____ drug. 1 (3) Moving a prescription drug to a more restrictive tier if 2 the health carrier uses a formulary with tiers. 3 (4) Removing a prescription drug from a formulary. 4 3. Coverage exemption determination process. 5 a. To ensure continuity of care, a health carrier, health 6 plan, or utilization review organization shall provide a 7 covered person and prescribing health care professional with 8 access to a clear and convenient process to request a coverage 9 exemption determination. A health carrier, health plan, or 10 utilization review organization may use its existing medical 11 exceptions process to satisfy this requirement. The process 12 used shall be easily accessible on the internet site of the 13 health carrier, health benefit plan, or utilization review 14 organization. 15 b. A health carrier, health benefit plan, or utilization 16 review organization shall respond to a coverage exemption 17 determination request within seventy-two hours of receipt. In 18 cases where exigent circumstances exist, a health carrier, 19 health benefit plan, or utilization review organization shall 20 respond within twenty-four hours of receipt. If a response by 21 a health carrier, health benefit plan, or utilization review 22 organization is not received within the applicable time period, 23 the coverage exemption shall be deemed granted. 24 (1) A coverage exemption shall be expeditiously granted for 25 a discontinued health benefit plan if a covered person enrolls 26 in a comparable plan offered by the same health carrier, and 27 all of the following conditions apply: 28 (a) The covered person is medically stable on a prescription 29 drug as determined by the prescribing health care professional. 30 (b) The prescribing health care professional continues 31 to prescribe the drug for the covered person for the medical 32 condition. 33 (c) In comparison to the discontinued health benefit plan, 34 the new health benefit plan does any of the following: 35 -3- LSB 5061XC (5) 87 ko/rj 3/ 8

S.F. _____ (i) Limits or reduces the maximum coverage of prescription 1 drug benefits. 2 (ii) Increases cost sharing for the prescription drug. 3 (iii) Moves the prescription drug to a more restrictive tier 4 if the health carrier uses a formulary with tiers. 5 (iv) Excludes the prescription drug from the formulary. 6 c. Upon granting of a coverage exemption for a drug 7 prescribed by a covered person’s prescribing health care 8 professional, a health carrier, health benefit plan, or 9 utilization review organization shall authorize coverage no 10 more restrictive than that offered in a discontinued health 11 benefit plan, or than that offered prior to implementation of 12 restrictive changes to the health benefit plan’s formulary 13 after the current plan year began. 14 d. If a determination is made to deny a request for a 15 coverage exemption, the health carrier, health benefit plan, 16 or utilization review organization shall provide the covered 17 person or the covered person’s authorized representative and 18 the authorized person’s prescribing health care professional 19 with the reason for denial and information regarding the 20 procedure to appeal the denial. Any determination to deny a 21 coverage exemption may be appealed by a covered person or the 22 covered person’s authorized representative. 23 e. A health carrier, health benefit plan, or utilization 24 review organization shall uphold or reverse a determination to 25 deny a coverage exemption within seventy-two hours of receipt 26 of an appeal of denial. In cases where exigent circumstances 27 exist, a health carrier, health benefit plan, or utilization 28 review organization shall uphold or reverse a determination to 29 deny a coverage exemption within twenty-four hours of receipt. 30 If the determination to deny a coverage exemption is not upheld 31 or reversed on appeal within the applicable time period, the 32 denial shall be deemed reversed and the coverage exemption 33 shall be deemed approved. 34 f. If a determination to deny a coverage exemption is 35 -4- LSB 5061XC (5) 87 ko/rj 4/ 8

S.F. _____ upheld on appeal, the health carrier, health benefit plan, 1 or utilization review organization shall provide the covered 2 person or covered person’s authorized representative and the 3 covered person’s prescribing health care professional with 4 the reason for upholding the denial on appeal and information 5 regarding the procedure to request external review of the 6 denial pursuant to chapter 514J. Any denial of a request for a 7 coverage exemption that is upheld on appeal shall be considered 8 a final adverse determination for purposes of chapter 514J and 9 is eligible for a request for external review by a covered 10 person or the covered person’s authorized representative 11 pursuant to chapter 514J. 12 4. Limitations. This section shall not be construed to do 13 any of the following: 14 a. Prevent a health care professional from prescribing 15 another drug covered by the health carrier that the health care 16 professional deems medically necessary for the covered person. 17 b. Prevent a health carrier from doing any of the following: 18 (1) Adding a prescription drug to its formulary. 19 (2) Removing a prescription drug from its formulary if the 20 drug manufacturer has removed the drug for sale in the United 21 States. 22 5. Enforcement. The commissioner may take any enforcement 23 action under the commissioner’s authority to enforce compliance 24 with this section. 25 6. Applicability. This Section is applicable to a health 26 benefit plan that is delivered, issued for delivery, continued, 27 or renewed in this state on or after January 1, 2019. 28 EXPLANATION 29 The inclusion of this explanation does not constitute agreement with 30 the explanation’s substance by the members of the general assembly. 31 This bill relates to the continuity of care for a covered 32 person and nonmedical switching by health carriers, health 33 benefit plans, and utilization review organizations. 34 The bill defines “nonmedical switching” as a health benefit 35 -5- LSB 5061XC (5) 87 ko/rj 5/ 8

S.F. _____ plan’s restrictive changes to the health benefit plan’s 1 formulary after the current plan year has begun or during the 2 open enrollment period for the upcoming plan year, causing a 3 covered person who is medically stable on the covered person’s 4 current prescribed drug as determined by the prescribing 5 health care professional, to switch to a less costly alternate 6 prescription drug. 7 The bill provides that during a covered person’s eligibility 8 under a health benefit plan, inclusive of any open enrollment 9 period, a health plan carrier, health benefit plan, or 10 utilization review organization shall not limit or exclude 11 coverage of a prescription drug for the covered person if the 12 covered person is medically stable on the drug as determined 13 by the prescribing health care professional, the drug was 14 previously approved by the health carrier for coverage for the 15 person, and the person’s prescribing health care professional 16 continues to prescribe the drug. The bill includes, as 17 prohibited limitations or exclusions, reducing the maximum 18 coverage of prescription drug benefits, increasing cost sharing 19 for a covered drug, moving a drug to a more restrictive tier, 20 and removing a drug from a formulary. 21 The bill requires a covered person and prescribing health 22 care professional to have access to a process to request a 23 coverage exemption determination. The bill defines “coverage 24 exemption determination” as a determination made by a 25 health carrier, health benefit plan, or utilization review 26 organization whether to cover a prescription drug that is 27 otherwise excluded from coverage. 28 A coverage exemption determination request must be approved 29 or denied by the health carrier, health benefit plan, or 30 utilization review organization within 72 hours, or within 24 31 hours if exigent circumstances exist. If a determination is 32 not received within the applicable time period the coverage 33 exemption is deemed granted. 34 The bill requires a coverage exemption to be expeditiously 35 -6- LSB 5061XC (5) 87 ko/rj 6/ 8

S.F. _____ granted for a health benefit plan discontinued for the next 1 plan year if a covered person enrolls in a comparable plan 2 offered by the same health carrier, and in comparison to the 3 discontinued health benefit plan, the new health benefit plan 4 limits or reduces the maximum coverage for a prescription drug, 5 increases cost sharing for the prescription drug, moves the 6 prescription drug to a more restrictive tier, or excludes the 7 prescription drug from the formulary. 8 If a coverage exemption is granted, the bill requires the 9 authorization of coverage that is no more restrictive than that 10 offered in a discontinued health benefit plan, or than that 11 offered prior to implementation of restrictive changes to the 12 health benefit plan’s formulary after the current plan year 13 began. 14 If a determination is made to deny a request for a 15 coverage exemption, the reason for denial and the procedure 16 to appeal the denial must be provided to the requestor. Any 17 determination to deny a coverage exemption may be appealed to 18 the health carrier, health benefit plan, or utilization review 19 organization. 20 A determination to uphold or reverse denial of a coverage 21 exemption must be made within 72 hours of receipt of an appeal, 22 or within 24 hours if exigent circumstances exist. If a 23 determination is not made within the applicable time period, 24 the denial is deemed reversed and the coverage exemption is 25 deemed approved. 26 If a determination to deny a coverage exemption is upheld on 27 appeal, the reason for upholding the denial and the procedure 28 to request external review of the denial pursuant to Code 29 chapter 514J must be provided to the individual who filed the 30 appeal. Any denial of a request for a coverage exemption that 31 is upheld on appeal is considered a final adverse determination 32 for purposes of Code chapter 514J and is eligible for a request 33 for external review by a covered person or the covered person’s 34 authorized representative pursuant to Code chapter 514J. 35 -7- LSB 5061XC (5) 87 ko/rj 7/ 8

S.F. _____ The bill shall not be construed to prevent a health care 1 professional from prescribing another drug covered by the 2 health carrier that the health care professional deems 3 medically necessary for the covered person. 4 The bill shall not be construed to prevent a health carrier 5 from adding a drug to its formulary or removing a drug from its 6 formulary if the drug manufacturer removes the drug for sale in 7 the United States. 8 The bill allows the commissioner to take any necessary 9 enforcement action under the commissioner’s authority to 10 enforce compliance with the bill. 11 The bill is applicable to health benefit plans that are 12 delivered, issued for delivery, continued, or renewed in this 13 state on or after January 1, 2019. 14 -8- LSB 5061XC (5) 87 ko/rj 8/ 8