House File 233 - Reprinted HOUSE FILE 233 BY COMMITTEE ON HUMAN RESOURCES (SUCCESSOR TO HSB 26) (As Amended and Passed by the House March 27, 2017 ) A BILL FOR An Act relating to the use of step therapy protocols for 1 prescription drugs by health carriers, health benefit 2 plans, and utilization review organizations, and including 3 applicability provisions. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 HF 233 (4) 87 av/nh/md

H.F. 233 Section 1. NEW SECTION . 514F.7 Use of step therapy 1 protocols. 2 1. Definitions. For the purposes of this section: 3 a. “Authorized representative” means the same as defined in 4 section 514J.102. 5 b. “Clinical practice guidelines” means a systematically 6 developed statement to assist health care professionals and 7 covered persons in making decisions about appropriate health 8 care for specific clinical circumstances and conditions. 9 c. “Clinical review criteria” means the same as defined in 10 section 514J.102. 11 d. “Covered person” means the same as defined in section 12 514J.102. 13 e. “Health benefit plan” means the same as defined in 14 section 514J.102. 15 f. “Health care professional” means the same as defined in 16 section 514J.102. 17 g. “Health care services” means the same as defined in 18 section 514J.102. 19 h. “Health carrier” means an entity subject to the 20 insurance laws and regulations of this state, or subject 21 to the jurisdiction of the commissioner, including an 22 insurance company offering sickness and accident plans, a 23 health maintenance organization, a nonprofit health service 24 corporation, a plan established pursuant to chapter 509A 25 for public employees, or any other entity providing a plan 26 of health insurance, health care benefits, or health care 27 services. “Health carrier” includes an organized delivery 28 system. “Health carrier” does not include a managed care 29 organization as defined in 441 IAC 73.1 when the managed care 30 organization is acting pursuant to a contract with the Iowa 31 department of human services to provide services to Medicaid 32 recipients. 33 i. “Pharmaceutical sample” means a unit of a prescription 34 drug that is not intended to be sold and is intended to promote 35 -1- HF 233 (4) 87 av/nh/md 1/ 5

H.F. 233 the sale of the drug. 1 j. “Step therapy override exception” means a step therapy 2 protocol should be overridden in favor of coverage of the 3 prescription drug selected by a health care professional 4 within the applicable time frames and in compliance with the 5 requirements specified in section 505.26, subsection 7, for a 6 request for prior authorization of prescription drug benefits. 7 This determination is based on a review of the covered person’s 8 or health care professional’s request for an override, along 9 with supporting rationale and documentation. 10 k. “Step therapy protocol” means a protocol or program that 11 establishes a specific sequence in which prescription drugs for 12 a specified medical condition and medically appropriate for 13 a particular covered person are covered under a pharmacy or 14 medical benefit by a health carrier, a health benefit plan, or 15 a utilization review organization, including self-administered 16 drugs and drugs administered by a health care professional. 17 l. “Utilization review” means a program or process by which 18 an evaluation is made of the necessity, appropriateness, and 19 efficiency of the use of health care services, procedures, or 20 facilities given or proposed to be given to an individual. 21 Such evaluation does not apply to requests by an individual or 22 provider for a clarification, guarantee, or statement of an 23 individual’s health insurance coverage or benefits provided 24 under a health benefit plan, nor to claims adjudication. 25 Unless it is specifically stated, verification of benefits, 26 preauthorization, or a prospective or concurrent utilization 27 review program or process shall not be construed as a guarantee 28 or statement of insurance coverage or benefits for any 29 individual under a health benefit plan. 30 m. “Utilization review organization” means an entity that 31 performs utilization review, other than a health carrier 32 performing utilization review for its own health benefit plans. 33 2. Establishment of step therapy protocols. A health 34 carrier, health benefit plan, or utilization review 35 -2- HF 233 (4) 87 av/nh/md 2/ 5

H.F. 233 organization shall consider available recognized evidence-based 1 and peer-reviewed clinical practice guidelines when 2 establishing a step therapy protocol. Upon written request 3 of a covered person, a health carrier, health benefit plan, 4 or utilization review organization shall provide any clinical 5 review criteria applicable to a specific prescription drug 6 covered by the health carrier, health benefit plan, or 7 utilization review organization. 8 3. Step therapy override exceptions process transparency. 9 a. When coverage of a prescription drug for the 10 treatment of any medical condition is restricted for use 11 by a health carrier, health benefit plan, or utilization 12 review organization through the use of a step therapy 13 protocol, the covered person and the prescribing health 14 care professional shall have access to a clear, readily 15 accessible, and convenient process to request a step therapy 16 override exception. A health carrier, health benefit plan, or 17 utilization review organization may use its existing medical 18 exceptions process to satisfy this requirement. The process 19 used shall be easily accessible on the internet site of the 20 health carrier, health benefit plan, or utilization review 21 organization. 22 b. A step therapy override exception shall be approved by 23 a health carrier, health benefit plan, or utilization review 24 organization if any of the following circumstances apply: 25 (1) The prescription drug required under the step therapy 26 protocol is contraindicated pursuant to the drug manufacturer’s 27 prescribing information for the drug or, due to a documented 28 adverse event with a previous use or a documented medical 29 condition, including a comorbid condition, is likely to do any 30 of the following: 31 (a) Cause an adverse reaction to a covered person. 32 (b) Decrease the ability of a covered person to achieve 33 or maintain reasonable functional ability in performing daily 34 activities. 35 -3- HF 233 (4) 87 av/nh/md 3/ 5

H.F. 233 (c) Cause physical or mental harm to a covered person. 1 (2) The prescription drug required under the step therapy 2 protocol is expected to be ineffective based on the known 3 clinical characteristics of the covered person, such as the 4 covered person’s adherence to or compliance with the covered 5 person’s individual plan of care, and any of the following: 6 (a) The known characteristics of the prescription drug 7 regimen as described in peer-reviewed literature or in the 8 manufacturer’s prescribing information for the drug. 9 (b) The health care professional’s medical judgment based 10 on clinical practice guidelines or peer-reviewed journals. 11 (c) The covered person’s documented experience with the 12 prescription drug regimen. 13 (3) The covered person has had a trial of a therapeutically 14 equivalent dose of the prescription drug under the step 15 therapy protocol while under the covered person’s current or 16 previous health benefit plan for a period of time to allow for 17 a positive treatment outcome or of another prescription drug 18 in the same pharmacologic class or with the same mechanism 19 of action, and such prescription drug was discontinued by 20 the covered person’s health care professional due to lack of 21 effectiveness. 22 (4) The covered person is currently receiving a positive 23 therapeutic outcome on a prescription drug selected by the 24 covered person’s health care professional for the medical 25 condition under consideration while under the covered person’s 26 current or previous health benefit plan. This subparagraph 27 shall not be construed to encourage the use of a pharmaceutical 28 sample for the sole purpose of meeting the requirements for a 29 step therapy override exception. 30 c. Upon approval of a step therapy override exception, the 31 health carrier, health benefit plan, or utilization review 32 organization shall authorize coverage for the prescription 33 drug selected by the covered person’s prescribing health care 34 professional if the prescription drug is a covered prescription 35 -4- HF 233 (4) 87 av/nh/md 4/ 5

H.F. 233 drug under the covered person’s health benefit plan. 1 d. A health carrier, health benefit plan, or utilization 2 review organization shall make a determination to approve or 3 deny a request for a step therapy override exception within the 4 applicable time frames and in compliance with the requirements 5 specified in section 505.26, subsection 7, for a request for 6 prior authorization of prescription drug benefits. 7 e. If a request for a step therapy override exception is 8 denied, the health carrier, health benefit plan, or utilization 9 review organization shall provide the covered person or the 10 covered person’s authorized representative and the patient’s 11 prescribing health care professional with the reason for the 12 denial and information regarding the procedure to request 13 external review of the denial pursuant to chapter 514J. Any 14 denial of a request for a step therapy override exception 15 that is upheld on appeal shall be considered a final adverse 16 determination for purposes of chapter 514J and is eligible 17 for a request for external review by a covered person or the 18 covered person’s authorized representative pursuant to chapter 19 514J. 20 4. Limitations. This section shall not be construed to do 21 either of the following: 22 a. Prevent a health carrier, health benefit plan, or 23 utilization review organization from requiring a covered 24 person to try a prescription drug with the same generic name 25 and demonstrated bioavailability or a biological product that 26 is an interchangeable biological product pursuant to section 27 155A.32 prior to providing coverage for the equivalent branded 28 prescription drug. 29 b. Prevent a health care professional from prescribing 30 a prescription drug that is determined to be medically 31 appropriate. 32 Sec. 2. APPLICABILITY. This Act is applicable to a health 33 benefit plan that is delivered, issued for delivery, continued, 34 or renewed in this state on or after January 1, 2018. 35 -5- HF 233 (4) 87 av/nh/md 5/ 5