H.F. 372 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. “Demonstrated bioavailability” means the same as defined 20 in section 155A.3. 21 h. “Discontinued health benefit plan” means a covered 22 person’s existing health benefit plan that is discontinued by a 23 health carrier during open enrollment for the next plan year. 24 i. “Formulary” means a complete list of prescription drugs 25 eligible for coverage under a health benefit plan. 26 j. “Generic name” means the same as defined in section 27 155A.3. 28 k. “Health benefit plan” means the same as defined in 29 section 514J.102. 30 l. “Health care professional” means the same as defined in 31 section 514J.102. 32 m. “Health care services” means the same as defined in 33 section 514J.102. 34 n. “Health carrier” means the same as defined in section 35 -1- LSB 2091YH (1) 89 ko/rn 1/ 9

H.F. 372 514J.102. 1 o. “Interchangeable biological product” means the same as 2 defined in section 155A.3. 3 p. “Nonmedical switching” means a health benefit plan’s 4 restrictive changes to the health benefit plan’s formulary 5 after the current plan year has begun or during the open 6 enrollment period for the upcoming plan year, causing a covered 7 person who is medically stable on the covered person’s current 8 prescribed drug as determined by the prescribing health care 9 professional, to switch to a less costly alternate prescription 10 drug. 11 q. “Open enrollment” means the yearly time period during 12 which an individual can enroll in a health benefit plan. 13 r. “Utilization review” means the same as defined in 514F.7. 14 s. “Utilization review organization” means the same as 15 defined in 514F.7. 16 2. Nonmedical switching. With respect to a health carrier 17 that has entered into a health benefit plan with a covered 18 person that covers prescription drug benefits, all of the 19 following apply: 20 a. A health carrier, health benefit plan, or utilization 21 review organization shall not limit or exclude coverage of 22 a prescription drug for any covered person who is medically 23 stable on such drug as determined by the prescribing health 24 care professional, if all of the following apply: 25 (1) The prescription drug was previously approved by the 26 health carrier for coverage for the covered person. 27 (2) The covered person’s prescribing health care 28 professional has prescribed the drug for the covered person’s 29 medical condition within the previous six months. 30 (3) The covered person continues to be an enrollee of the 31 health benefit plan. 32 b. Coverage of a covered person’s prescription drug, as 33 described in paragraph “a” , shall continue through the last day 34 of the covered person’s eligibility under the health benefit 35 -2- LSB 2091YH (1) 89 ko/rn 2/ 9

H.F. 372 plan, inclusive of any open enrollment period. 1 c. Prohibited limitations and exclusions referred to in 2 paragraph “a” include but are not limited to the following: 3 (1) Limiting or reducing the maximum coverage of 4 prescription drug benefits. 5 (2) Increasing cost sharing for a covered prescription 6 drug. 7 (3) Moving a prescription drug to a more restrictive tier if 8 the health carrier uses a formulary with tiers. 9 (4) Removing a prescription drug from a formulary, unless 10 the United States food and drug administration has issued a 11 statement about the drug that calls into question the clinical 12 safety of the drug, or the manufacturer of the drug has 13 notified the United States food and drug administration of a 14 manufacturing discontinuance or potential discontinuance of the 15 drug as required by section 506C of the Federal Food, Drug, and 16 Cosmetic Act, as codified in 21 U.S.C. §356c. 17 d. A drug product with the same generic name and 18 demonstrated bioavailability, or an interchangeable biological 19 product, shall be considered equivalent to the prescription 20 drug prescribed by the covered person’s health care 21 professional. 22 3. Coverage exemption determination process. 23 a. To ensure continuity of care, a health carrier, health 24 plan, or utilization review organization shall provide a 25 covered person and prescribing health care professional 26 with access to a clear and convenient process to request a 27 coverage exemption determination. A health carrier, health 28 plan, or utilization review organization may use its existing 29 medical exceptions process to satisfy this requirement. The 30 process shall be easily accessible on the internet site of the 31 health carrier, health benefit plan, or utilization review 32 organization. 33 b. A health carrier, health benefit plan, or utilization 34 review organization shall respond to a coverage exemption 35 -3- LSB 2091YH (1) 89 ko/rn 3/ 9

H.F. 372 determination request within five calendar days of receipt. In 1 cases where exigent circumstances exist, the health carrier, 2 health benefit plan, or utilization review organization shall 3 respond within seventy-two hours of receipt. If a response by 4 the health carrier, health benefit plan, or utilization review 5 organization is not received within the applicable time period, 6 the coverage exemption shall be deemed granted. 7 c. A coverage exemption shall be expeditiously granted for a 8 discontinued health benefit plan if a covered person enrolls in 9 a comparable plan offered by the same health carrier, and all 10 of the following conditions apply: 11 (1) The covered person is medically stable on a prescription 12 drug as determined by the prescribing health care professional. 13 (2) The prescribing health care professional continues 14 to prescribe the drug for the covered person for the covered 15 person’s medical condition. 16 (3) In comparison to the discontinued health benefit plan, 17 the new health benefit plan does any of the following: 18 (a) Limits or reduces the maximum coverage of prescription 19 drug benefits. 20 (b) Increases cost sharing for the prescription drug. 21 (c) Moves the prescription drug to a more restrictive tier 22 if the health carrier uses a formulary with tiers. 23 (d) Excludes the prescription drug from the health benefit 24 plan’s formulary. 25 d. Upon granting of a coverage exemption for a drug 26 prescribed by a covered person’s prescribing health care 27 professional, a health carrier, health benefit plan, or 28 utilization review organization shall authorize coverage no 29 more restrictive than that offered in a discontinued health 30 benefit plan, or than that offered prior to implementation of 31 restrictive changes to the health benefit plan’s formulary 32 after the current plan year began. 33 e. If a determination is made to deny a request for a 34 coverage exemption, the health carrier, health benefit plan, 35 -4- LSB 2091YH (1) 89 ko/rn 4/ 9

H.F. 372 or utilization review organization shall provide the covered 1 person or the covered person’s authorized representative and 2 the authorized person’s prescribing health care professional 3 with the reason for denial and information regarding the 4 procedure to appeal the denial. Any determination to deny a 5 coverage exemption may be appealed by a covered person or the 6 covered person’s authorized representative. 7 f. A health carrier, health benefit plan, or utilization 8 review organization shall uphold or reverse a determination to 9 deny a coverage exemption within five calendar days of receipt 10 of an appeal of denial. In cases where exigent circumstances 11 exist, a health carrier, health benefit plan, or utilization 12 review organization shall uphold or reverse a determination to 13 deny a coverage exemption within seventy-two hours of receipt. 14 If the determination to deny a coverage exemption is not upheld 15 or reversed on appeal within the applicable time period, the 16 denial shall be deemed reversed and the coverage exemption 17 shall be deemed approved. 18 g. If a determination to deny a coverage exemption is 19 upheld on appeal, the health carrier, health benefit plan, 20 or utilization review organization shall provide the covered 21 person or the covered person’s authorized representative and 22 the covered person’s prescribing health care professional with 23 the reason for upholding the denial on appeal and information 24 regarding the procedure to request external review of the 25 denial pursuant to chapter 514J. Any denial of a request for a 26 coverage exemption that is upheld on appeal shall be considered 27 a final adverse determination for purposes of chapter 514J and 28 is eligible for a request for external review by a covered 29 person or the covered person’s authorized representative 30 pursuant to chapter 514J. 31 4. Limitations. This section shall not be construed to do 32 any of the following: 33 a. Prevent a health care professional from prescribing 34 another drug covered by the health carrier that the health care 35 -5- LSB 2091YH (1) 89 ko/rn 5/ 9

H.F. 372 professional deems medically necessary for the covered person. 1 b. Prevent a health carrier from doing any of the following: 2 (1) Adding a prescription drug to its formulary. 3 (2) Removing a prescription drug from its formulary if the 4 drug manufacturer has removed the drug for sale in the United 5 States. 6 5. Enforcement. The commissioner may take any enforcement 7 action under the commissioner’s authority to enforce compliance 8 with this section. 9 Sec. 2. APPLICABILITY. This Act applies to a health benefit 10 plan that is delivered, issued for delivery, continued, or 11 renewed in this state on or after January 1, 2022. 12 EXPLANATION 13 The inclusion of this explanation does not constitute agreement with 14 the explanation’s substance by the members of the general assembly. 15 This bill relates to the continuity of care for a covered 16 person and nonmedical switching by health carriers, health 17 benefit plans, and utilization review organizations. 18 The bill defines “nonmedical switching” as a health benefit 19 plan’s restrictive changes to the health benefit plan’s 20 formulary after the current plan year has begun or during the 21 open enrollment period for the upcoming plan year, causing a 22 covered person who is medically stable on the covered person’s 23 current prescribed drug as determined by the prescribing 24 health care professional, to switch to a less costly alternate 25 prescription drug. 26 The bill provides that during a covered person’s eligibility 27 under a health benefit plan, inclusive of any open enrollment 28 period, a health plan carrier, health benefit plan, or 29 utilization review organization shall not limit or exclude 30 coverage of a prescription drug for the covered person if the 31 covered person is medically stable on the drug as determined 32 by the prescribing health care professional, the drug was 33 previously approved by the health carrier for coverage for 34 the person, and the covered person’s prescribing health care 35 -6- LSB 2091YH (1) 89 ko/rn 6/ 9

H.F. 372 professional has prescribed the drug for the person’s medical 1 condition within the previous six months. The bill includes, 2 as prohibited limitations or exclusions, reducing the maximum 3 coverage of prescription drug benefits, increasing cost sharing 4 for a covered drug, moving a drug to a more restrictive tier, 5 and removing a drug from a formulary. A prescription drug 6 may, however, be removed from a formulary if the United States 7 food and drug administration issues a statement regarding the 8 clinical safety of the drug, or the manufacturer of the drug 9 notifies the United States food and drug administration of a 10 manufacturing discontinuance or potential discontinuance of the 11 drug as required by section 506c of the Federal Food, Drug, 12 and Cosmetic Act. The bill provides that a drug product with 13 the same generic name and demonstrated bioavailability, or an 14 interchangeable biological product, is considered equivalent to 15 the prescription drug prescribed by the covered person’s health 16 care professional. 17 The bill requires a covered person and prescribing health 18 care professional to have access to a process to request a 19 coverage exemption determination. The bill defines “coverage 20 exemption determination” as a determination made by a 21 health carrier, health benefit plan, or utilization review 22 organization whether to cover a prescription drug that is 23 otherwise excluded from coverage. 24 A coverage exemption determination request must be approved 25 or denied by the health carrier, health benefit plan, or 26 utilization review organization within five calendar days, 27 or within 72 hours if exigent circumstances exist. If a 28 determination is not received within the applicable time period 29 the coverage exemption is deemed granted. 30 The bill requires a coverage exemption to be expeditiously 31 granted for a health benefit plan that is discontinued for the 32 next plan year if a covered person enrolls in a comparable 33 plan offered by the same health carrier, and in comparison 34 to the discontinued health benefit plan, the new health 35 -7- LSB 2091YH (1) 89 ko/rn 7/ 9

H.F. 372 benefit plan limits or reduces the maximum coverage for a 1 prescription drug, increases cost sharing for the prescription 2 drug, moves the prescription drug to a more restrictive 3 tier, or excludes the prescription drug from the formulary. 4 If a coverage exemption is granted, the bill requires an 5 authorization of coverage that is no more restrictive than 6 that offered in the discontinued health benefit plan, or than 7 that offered prior to implementation of restrictive changes 8 to the health benefit plan’s formulary after the current plan 9 year began. If a determination is made to deny a request for 10 a coverage exemption, the reason for denial and the procedure 11 to appeal the denial must be provided to the requestor. Any 12 determination to deny a coverage exemption may be appealed to 13 the health carrier, health benefit plan, or utilization review 14 organization. A determination to uphold or reverse denial 15 of a coverage exemption must be made within five calendar 16 days of receipt of an appeal, or within 72 hours if exigent 17 circumstances exist. If a determination is not made within the 18 applicable time period, the denial is deemed reversed and the 19 coverage exemption is deemed approved. 20 If a determination to deny a coverage exemption is upheld on 21 appeal, the reason for upholding the denial and the procedure 22 to request external review of the denial pursuant to Code 23 chapter 514J must be provided to the individual who filed the 24 appeal. Any denial of a request for a coverage exemption that 25 is upheld on appeal is considered a final adverse determination 26 for purposes of Code chapter 514J and is eligible for a request 27 for external review by a covered person or the covered person’s 28 authorized representative pursuant to Code chapter 514J. 29 The bill shall not be construed to prevent a health care 30 professional from prescribing another drug covered by the 31 health carrier that the health care professional deems 32 medically necessary for the covered person. 33 The bill shall not be construed to prevent a health carrier 34 from adding a drug to its formulary, or from removing a drug 35 -8- LSB 2091YH (1) 89 ko/rn 8/ 9

H.F. 372 from its formulary if the drug manufacturer removes the drug 1 for sale in the United States. 2 The bill allows the commissioner to take any necessary 3 enforcement action under the commissioner’s authority to 4 enforce compliance with the bill. 5 The bill is applicable to health benefit plans that are 6 delivered, issued for delivery, continued, or renewed in this 7 state on or after January 1, 2022. 8 -9- LSB 2091YH (1) 89 ko/rn 9/ 9