Chapter 0431 - 551R - S Ver of SB1270

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 20, Arizona Revised Statutes, is amended by adding chapter 30, to read:

CHAPTER 30

STEP THERAPY

ARTICLE 1. GENERAL PROVISIONS

START_STATUTE20-3601. Definitions

In this article, unless the context otherwise requires:

1. "Clinical practice guidelines" means a systematically developed statement to assist health care providers and patients in making decisions about appropriate health care for specific clinical circumstances and conditions.

2. "Clinical review criteria" means the written screening procedures, decision abstracts, clinical protocols and practice guidelines that are used by a health care insurer, pharmacy benefit manager or utilization review agent to determine the medical necessity and appropriateness of health care services.

3. "Exigent circumstance" means the action of a health care insurer, pharmacy benefit manager or utilization review agent on a step therapy protocol exception request within the application of the time periods for making a nonexpedited decision, as determined and documented by the prescribing provider, could seriously jeopardize the insured's, enrollee's or subscriber's life, health or ability to regain maximum function or cause a significant negative change in the patient's medical condition.

4. "Health care insurer" has the same meaning prescribed in section 20-2501.

5. "Health care plan" means a policy, contract or evidence of coverage that a health care insurer issues to an insured, enrollee or subscriber.

6. "Medically necessary" means, with respect to a prescription drug, appropriate under the applicable standard of care:

(a) To improve or preserve health, life or function.

(b) To slow the deterioration of health, life or function.

7. "methodologist" means a person that manages research design for the purpose of accurate and unbiased data collection and that has experience testing questions that are germane to the subject of the research.

8. "Pharmaceutical sample" means a unit of a prescription drug that is not intended to be sold but is intended to promote the sale of the prescription drug.

9. "Pharmacy benefit manager" has the same meaning prescribed in section 20-3321.

10. "Serious adverse reaction":

(a) means an adverse event or suspected adverse reaction if, in the view of either the investigator or sponsor, the event or reaction results in any of the following outcomes:

(i) Death.

(ii) A life-threatening adverse event.

(iii) Inpatient hospitalization or prolonging existing hospitalization.

(iv) A persistent or significant incapacity or substantial disruption of the ability to conduct normal life functions.

(v) A congenital anomaly or birth defect.

(b) Includes an event or reaction that might not result in death, be life threatening or require hospitalization but, based on appropriate medical judgment, could jeopardize the patient's health or medical situation by requiring medical or surgical intervention to prevent at least one of the outcomes listed in subdivision (a) of this paragraph.

11. "Step therapy exception" means a step therapy protocol that is overridden in favor of immediate coverage of a health care provider's selected prescription drug.

12. "Step therapy protocol" means a protocol or program that establishes the specific sequence in which prescription drugs that are for a specified medical condition and that are medically necessary for a particular patient are covered by a health care insurer under a health care plan.

13. "Utilization review" has the same meaning prescribed in section 20-2501.

14. "Utilization review agent" has the same meaning prescribed in section 20-2530.END_STATUTE

START_STATUTE20-3602. Applicability

This article applies to:

1. any health care plan that is subject to state law regulating insurance, that provides prescription drug benefits and that includes coverage for a step therapy protocol regardless of how that coverage is described.

2. A Contractor, agent or similar entity that implements coverage for a step therapy protocol on behalf of a health care plan, including a pharmacy benefit manager or utilization review agent. END_STATUTE

START_STATUTE20-3603. Clinical review criteria

A. Clinical review criteria that are used by a health care insurer, pharmacy benefit manager or utilization review agent to establish a step therapy protocol shall be based on clinical practice guidelines that:

1. Recommend that the prescription drugs be taken in the specific sequence required by the step therapy protocol.

2. Except as provided in subsection B of this section, are developed and endorsed by a multidisciplinary panel of experts that manages conflicts of interest among the members of the writing and review groups by doing both of the following:

(a) Requiring the members to disclose any potential conflict of interest with an entity, including a health care insurer or pharmaceutical manufacturer, and recuse themselves from voting if they have a conflict of interest.

(b) Using a methodologist to work with writing groups to provide objectivity in data analysis and ranking of evidence through preparing evidence tables and facilitating consensus.

3. Are based on high quality studies, research and medical practice.

4. Are created by an explicit and transparent process that does all of the following:

(a) Minimizes biases and conflicts of interest.

(b) Explains the relationship between treatment options and outcomes.

(d) Considers relevant patient subgroups and preferences.

5. Are regularly updated at least once a year through a review of new evidence and research and newly developed treatments.

B. If no clinical practice guidelines exist that meet the requirements prescribed in subsection A, paragraph 2 of this section, peer reviewed publications may be used.

C. When considering clinical review criteria to establish a step therapy protocol, a utilization review agent shall also consider the needs of atypical patient populations and diagnoses.

D. Each health care insurer, pharmacy benefit manager and utilization review agent shall annually certify to the department that the clinical review criteria used in the insurer's, manager's or agent's step therapy protocol for prescription drugs meet the requirements prescribed by this article. On the department's request, the health care insurer, pharmacy benefit manager or utilization review agent shall submit the insurer's, manager's or agent's clinical review criteria for approval. The department may require a health care insurer to submit an annual certification or clinical review criteria submission for a pharmacy benefit manager or utilization review agent that acts on behalf of the health care insurer, and the health care insurer and the pharmacy benefit manager or utilization review agent shall be held jointly responsible for any errors, omissions, misstatements or misrepresentations in that annual certification or submission. A health care insurer that submits an annual certification or clinical review criteria submission on behalf of the health care insurer's pharmacy benefit manager or utilization review agent shall provide the pharmacy benefit manager or utilization review agent at least fifteen days' advance notice of the certification or submission, and the pharmacy benefit manager or utilization review agent may submit an independent certification or submission, in lieu of having the health care insurer make the certification or submission on the pharmacy benefit manager's or utilization review agent's behalf.

E. This section does not require a health care insurer to establish a new entity to develop clinical review criteria used for a step therapy protocol. END_STATUTE

START_STATUTE20-3604. Exceptions; process

A. Notwithstanding any other law, if coverage of a prescription drug for the treatment of any medical condition is restricted for use by a health care insurer, pharmacy benefit manager or utilization review agent through the use of a step therapy protocol, the patient and prescribing provider shall have access to a clear and convenient process to request a step therapy exception determination. A health care insurer, pharmacy benefit manager or utilization review agent may use its existing medical exceptions process to satisfy this requirement if that process is consistent with the requirements prescribed in section 20-3603 and this section. The process shall be made easily accessible on the health care insurer's, health benefit plan's, pharmacy benefit manager's or utilization review agent's website and shall include a list of the information and documentation the health care insurer, pharmacy benefit manager or utilization review agent requires and where and to whom the patient and prescribing provider must send the step therapy exception request.

B. A step therapy exception request shall be granted if sufficient justification and any necessary supporting clinical documentation are submitted to establish that any of the following applies:

1. The prescription drug required by the step therapy protocol is contraindicated or will likely cause a serious adverse reaction by or physical or mental harm to the patient.

2. The prescription drug required by the step therapy protocol is expected to be ineffective based on the known clinical characteristics of the patient and the known characteristics of the prescription drug regimen.

3. The patient has tried the prescription drug required by the step therapy protocol while under the patient's current or previous health care plan, or another prescription drug in the same pharmacologic class with a similar efficacy and side effect profile or with the same mechanism of action, The patient's adherence during the trial was for a period of time sufficient to allow for a positive treatment outcome and the prescription drug was discontinued due to lack of efficacy or effectiveness, an adverse event or contraindication.

4. The prescription drug required by the step therapy protocol is not in the best interest of the patient based on medical necessity because the patient's use of the prescription drug is expected to cause any of the following:

(a) A barrier to the patient's adherence to or compliance with the patient's plan of care.

(b) A negative impact on the patient's comorbid conditions.

(d) A decrease in the patient's ability to achieve or maintain a reasonably functional ability in performing daily activities for which the patient has experienced a positive therapeutic outcome.

5. The patient has experienced a positive therapeutic outcome on a prescribed drug selected by the patient's health care provider for the medical condition under consideration while on the patient's current or previous health care plan. A health care provider may not use a pharmaceutical sample for the purpose of qualifying for an exception to step therapy under this paragraph.

C. On granting a step therapy exception determination, the health care insurer, pharmacy benefit manager or utilization review agent shall authorize coverage for the prescription drug prescribed by the patient's treating health care provider if the prescription drug is covered by the patient's health care plan.

D. The health care insurer, pharmacy benefit manager or utilization review agent shall grant or deny a step therapy exception request within seventy-two hours after receiving the request. In a case in which an exigent circumstance exists, the health care insurer, pharmacy benefit manager or utilization review agent shall grant or deny the step therapy exception request within twenty-four hours after receiving the request. If the step therapy exception request is incomplete or additional clinically relevant information is required, the health care insurer, pharmacy benefit manager or utilization review agent shall notify the prescribing provider within seventy-two hours after receiving the request, or within twenty-four hours if an exigent circumstance exists, that additional or clinically relevant information is required in order to approve or deny the step therapy exception request pursuant to the requirements outlined in subsection A of this section. The health care insurer, pharmacy benefit manager or utilization review agent shall grant or deny the step therapy exception request within seventy-two hours after receiving the requested additional or clinically relevant information, or within twenty-four hours if an exigent circumstance exists. If the prescribing provider does not receive a determination or request for additional or clinically relevant information from the health care insurer, pharmacy benefit manager or utilization review agent within the time period prescribed by this subsection, the exception is deemed granted.

E. An insured, enrollee or subscriber may appeal an adverse step therapy exception determination as prescribed in chapter 15, article 2 of this title.

F. This section does not prevent either of the following:

1. A health care insurer, pharmacy benefit manager or utilization review agent from requiring a patient to try an AB-rated generic equivalent before providing coverage for the equivalent branded prescription drug.

2. A health care provider from prescribing a prescription drug that is determined to be medically necessary. END_STATUTE

Sec. 2. Applicability

This act applies to any policy, contract or evidence of coverage delivered, issued for delivery or renewed on or after December 31, 2022.