Virginia Association of Health Plans 2015 General Assembly Summary

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1 Virginia Association of Health Plans 2015 General Assembly Summary Priority Bills: VAHP tracked 47 bills that were considered to be priority bills in additional to the budget bills. This is the largest number in recent years. Of those 47 bills, 14 bills have been signed into law and VAHP has been involved in improving most of these bills. A chart outlining many of these bills as introduced compared to the bills as passed is included as part of this summary. Mandated Benefits, Coverage, or Contractual Requirements (HB 1942-Habeeb/SB 1262-Newman; HB Greason/SB 1457-Vogel; HB 1747-O Bannon; HB 2026-Byron; HB 2063-Kilgore/SB 1227-McWaters; SB 760- Edwards; HB 1420-Plum/SB 835-Edwards; HB 2156-Krupicka; and SB 1277-Barker) Bills dealing with mandated benefits and mandated contractual requirements had mixed fates, depending on the subject matter and the patron. HB 1942/SB 1162 initially required stakeholders to develop a universal prior authorization form and mandated circumstances when health plans could not require prior authorization for prescriptions for chronic diseases, mental health drugs, and generic drugs. After much negotiation and compromise, the bill puts parameters in place regarding the way prior authorization requests are submitted to and processed by the health plans; requires health plans to honor prior authorizations approved by another carrier for the initial 30 days of the member s prescription drug benefit; and requires health plans to have one central website access point for its prescription drug formularies, list of prior authorization drugs, and its prior authorization forms and procedures. The bill will become effective with provider contracts entered into, renewed, extended, or amended on or after January 1, HB 1940/SB 1457 as introduced would have removed the age limits (ages 2-6) for the mandate requiring coverage for Applied Behavioral Analyst (ABA) for children with Autism Spectrum Disorder (ASD). Although SB 1457 was quickly stricken at the patron s request, HB 1940 was amended to cover children with ASD up to age 10. VAHP educated key Senators, including Sen. Watkins, the committee chair, about concerns with existing language due to the federal change in the definition of small group effective January 1, An amendment was made to remove the existing clarifying language regarding the small group market of up to 50 employees. Del. Greason was also supportive of the amendment. As a result, the bill now exempts both the individual and small group markets both inside and outside the exchange from applying this mandate to its policies and will exempt coverage for groups when the definition of small group market changes as of 1/1/16. HB 1747 conforms the mandate for mental health parity to applicable federal law. There are also reporting requirements that will need to be developed for capturing data on denied claims, complaints, and appeals for mental health benefits offered by health plans. In order to clarify the purpose of the HIRC and to ensure proper staffing by JLARC, the BOI, and DLAS, Del Byron introduced HB This became important as several bills were sent to the HIRC for study, including SB 760 that would mandate those carriers that write Medicare Supplement policies to include Medicare Supplement policies for disabled Medicare individuals under age 65 and SB 1394 that would limit member cost sharing to $100/month for any specialty drug. HB 2156, a bill mandating coverage of hearing aids, and SB 1277, a bill mandating coverage of prescription contraceptives, failed and most likely will not be sent to the HIRC for study. 5/19/15 1

2 HB 2063/SB 1227 revised the definition of telemedicine services in the insurance code but did not materially change it. This bill did clarify the conditions that must be met for a telemedicine service to be considered an establishment of a bona fide practitioner-patient relationship for the purpose of prescribing a Schedule VI drug. HB 1420/SB 835 would have required newborn screening for Krabbe Disease and other lysosomal storage disorders to be included in the routine newborn screenings regimen. Since VDH has a specific process for considering additional newborn screening tests, the bills were tabled and the request will have to go through that process. ACA-Related (HB 1339-Ware/SB 1182-Obenshain; HB 1530-Berg; HB 2322-Stolle/SB 1328-Watkins/SB Alexander; and SB 714-Stanley) A coalition of stakeholders spearheaded by PhRMA developed HB 1339/SB Initially, this bill would have required health plans that participate on the exchange to provide the operator of the exchange with a laundry list of consumer disclosures dealing mostly with provider networks and formularies that must be disclosed through the exchange s website. Since Virginia participates in the federal exchange, there would be a state law dealing with situations over which the Commonwealth would have no control. Revisions were made to the original bill that addressed some of these issues; however, after VAHP educated both the patrons and the members of the House and Senate Commerce and Labor Committees that consumer disclosures in the bill were already addressed and the information available through federal regulation and that state law also required disclosure of the information, the bills were stricken at the patrons requests. The coalition and the health plans agreed to work on consumer disclosure concerns during the interim. Several bills were proposed in anticipation of the elimination of subsidies as a result of an unfavorable Supreme Court ruling in King v. Burwell. Oral arguments were held on March 5 and a decision is anticipated in June. SB 1328 and SB 1363 both allowed Virginia to set up a state-based health benefits exchange only if the Court determines that qualified participants in the federal exchange are not eligible for a subsidy. These bills failed. However, HB 2322 took a different approach that appealed more favorably to legislators, with the bill passing unopposed. The bill allows health insurers to sell policies that do not include essential health benefits if the subsidies are no longer available to Virginians who purchase health insurance coverage on the exchange and the appropriate federal authority has suspended enforcement of the provisions of the PPACA or regulations promulgated thereunder that require that coverage under a health benefit plan include the essential health benefits, to the extent and under the terms that the appropriate federal authority has suspended enforcement of such provisions. Both of these conditions will most likely not happen. The bill was amended further by the Governor with a re-enactment clause that would require the 2016 General Assembly to pass the legislation again. The General Assembly did not approve the Governor s amendment but there were not enough votes in the Senate to pass the bill as enrolled. The bill was vetoed by the Governor on April 30, HB 1530 sought to prohibit the State Corporation Commission (SCC) and the Virginia Department of Health from performing plan management functions for the federal exchange. This bill was left In the House Commerce and Labor committee. SB 714 proposed a regulatory scheme for private health insurance exchanges. As a result of VAHP s education of both the patron and the Senate Commerce and Labor Committee that private health insurance exchanges are already allowed in Virginia without additional legislation and that there was no benefit regarding premiums of pooling smaller groups together to make a large group since health underwriting was no longer allowed, the bill was killed in committee. 5/19/15 2

3 Prescription Drugs (HB 1436-O Bannon; HB 1948-McClellan/SB 1394-Dance; HB 1387-D. Bell; HB 2031-Yost; HB 2194-Yost/ SB 1083-Vogel; and HB 1750-Ransone/HB 2050-Sickles/SB 732-Stanley/SB 1149-Stuart/SB Reeves) In 2013, SB 1285-Newman was passed dealing with interchangeable biosimilar drugs. This bill defined biosimilars and interchangeable biosimilars as well as set out several notification requirements when a pharmacist filled a prescription for a biologic with an interchangeable biosimilar. These notification provisions sunset on July 1, HB 1436 would have extended until July 1, 2016, the sunset provision for the pharmacist to notify the prescribing physician of the substitution but not extend the sunset on the consumer protection notification to let the individual know the retail cost of both the biological and the interchangeable biosimilar. This bill passed the House with little opposition; however, in the Health subcommittee of the Senate Education and Health Committee an amendment to the bill was proposed to extend the sunset to July 1, 2016, for the consumer protection provision. This amendment passed unanimously in subcommittee, then the patron asked to strike his bill and allow both provisions to sunset this year. HB 1948/SB 1394 would have mandated health insurers to limit member cost sharing for each specialty drug to $100 per month. The House bill was left in House Commerce and Labor but SB 1394 has been sent to the HIRC for study. HB 1387 mandated early refill of Schedule VI eye drops twice yearly. VAHP polled our members and determined that the plans early prescription drug refill policies would accommodate early refill of the eye drops in the bill. As a result, the patron requested the bill be stricken. HB 2031 deals with access to participating pharmacy providers of an insurer s or insurer s intermediary s maximum allowable cost (MAC) pricing list and sets out the provisions for updating the list every 7 days. The bill is effective January 1, 2016 and is consistent with the MAC pricing list notification provisions in Medicare regulation. There are also provisions included in the bill to deal with contract provisions outlining the dispute resolution process pharmacies have when there are concerns over the MAC pricing. VAHP, plan representatives, and representatives of several PBMs worked with the proponents of the bill to develop consensus legislation. HB 2194/SB 1083 proposed to add the meningococcal vaccines to the list of vaccines required for public school attendance. The House had concerns about mandating the vaccine for school attendance, killing HB 2194 in House Appropriations and SB 1083 in House Health, Welfare, and Institutions subcommittee. Much attention was focused this session on a young Fredericksburg boy, Josh Hardy, who benefited from the use of an experimental drug that saved his life last spring after the drug company allowed Josh to receive the drug outside the established clinical trial. The Right to Try legislation was the result with 5 legislators introducing bills to allow terminally ill patients the right to try experimental or investigational drugs, devices, and products under certain conditions, including no obligation by the health insurer to cover these treatments. HB 1750 and SB 732 were the ultimate vehicles for this legislation with HB 2050 being left in House Health, Welfare, and Institutions and SB 1149 and SB 1222 being rolled into SB 732. Medicaid- (SB 713 and SB 715-Stanley) Sen. Stanley proposed a number of bills later in the Special Session that dealt with existing Medicaid coverage. These bills did not pass during the Special Session and were re-introduced in the 2015 Session. SB 713 would have established a Patient-Centered Medical Home Advisory Council. The bill did receive traction in the Senate; however, it failed in committee when it came over to the House. Patient-Centered Medical Homes are addressed in the MCO contract and the MCOs have several PCMH models available throughout the Commonwealth. SB 715 would have allowed DMAS to enter into contracts with Regional Care Organizations to 5/19/15 3

4 provide coverage for Medicaid recipients. RCOs are not typically offered in states where managed care is available, especially when managed care Medicaid coverage is available statewide. As a result of Virginia s nearly 20 years of experience with managed care Medicaid, the bill was killed in Senate committee. Localities and Health Coverage- (HB 2107-Futrell/SB 866-Chafin/SB 1075-Vogel; HB 2316-Kilgore; and SB Hanger) Several bills were introduced regarding allowing localities and local school boards to participate in the state employee health plan. HB 2107 was left in House Appropriations and SB 866 had SB 1075 rolled into it and passed the Senate unanimously. SB 866 was left in House Appropriations; however, there is budget language that requires the Department of Human Resources Management to study moving localities to the state employee health plan as well as the current Local Choice program and provide suggestions to improve participation in Local Choice program. HB 2316 provides the Southwest Virginia Health Authority with the authority to receive and review applications for approval of proposed cooperative agreements submitted by two or more hospitals and to provide recommendations to the Health Commissioner regarding the approval of such applications. It also provides state action immunity from state and federal anti-trust laws under certain conditions. Both the Authority and the Health Commissioner must review any cooperative agreements to determine that the any issues with lack of competition are outweighed by the positive impacts of the agreements. Public notice is required and public comment is considered prior to the Authority s decision regarding the agreements. The Governor did offer a substitute bill with technical changes to the enrolled bill and the substitute was agreed to unaminously. SB 1046 took a different approach to the problem of wanting to have several localities band together for a selfinsured health plan. The Staunton-Augusta-Waynesboro (SAW) Benefit Consortium has been in existence of at least 10 years with the 3 localities joining together to purchase health insurance coverage for their employees. In order to avoid the health insurance tax assessed to fully insured groups, SAW wanted to self-insure; however, the Consortium was informed that under current state law, this may not be possible so SAW asked Sen. Hanger to put in SB 1046, which passed with very little opposition. Miscellaneous- (HB 1444-Ware and HB 2299-Miller/SB 1405-Favola) HB 1444 defines covered materials and covered services for vision care plans. The bill also prohibits vision care plans from determining which vision labs its vision providers can use. The bill will become effective January 1, HB 2299/SB 1405 deals with Health Services Plans licensed under Chapter 42 of Title If the action of another state or jurisdiction regarding distribution of plan surplus negatively impacts residents of Virginia covered under policies issued by a Health Services Plan, the SCC must issue an order to protect the impacted Virginia residents. There is an emergency clause on these bills so the effective date of the bills was the date the bills were signed by the Governor, March 23, Studies- (HJ 586-Yost; HJ 630-Byron; and HJ 637-Landes/SBJ 268-Hanger) HJ 586 requests the Department of Behavioral Health and Developmental Services (DBHDS) to perform a 2-year study of the benefits of offering voluntary mental health screenings to children in public elementary schools. Interim reporting is due November 30, 2015 and final reporting is due November 30, HJ 630 directs the HIRC to perform a study regarding mandating health insurance coverage of abuse deterrent opioids. DLAS is directed to perform the study with support from the BOI with the review by the HIRC to be completed prior to the beginning of the 2016 Session of the Virginia General Assembly. 5/19/15 4

5 HJ 637/SJ 268 directs JLARC to perform a 2-year study on Virginia s Medicaid program. The House study was much more comprehensive and would have included an actuarial study by consultants at a cost of approximately $300,000. The Senate study was more modest, did not have an additional cost, and focused mostly on long term care. These studies went to conference and the result is a study of i) the processes used to determine eligibility, including the financial eligibility screening process for long-term care services, whether asset sheltering could be further prevented and asset recoveries improved, and the effectiveness of existing fraud and abuse detection and prevention efforts; (ii) whether the most appropriate services are provided in a cost-effective manner; (iii) evidence-based practices and strategies that have been successfully adopted in other states and could be used in the Commonwealth; and (iv) other relevant issues, and make recommendations as appropriate. Virginia s Budget Items of interest in the engrossed budget are outlined below: General: Of general interest to all health plans are the following budget amendments: Provides $25,000 toward funding the APCD. Provides $250,000 toward funding the increase in the age limit for the ABA mandate to age 10 for the state employee health plan. Prohibits the state employee health plan from raising its maximum out of pocket amount. Directs DHRM to perform a study regarding moving localities and local school boards to the state employee health plan as well as the current Local Choice program and suggestions to improve participation in that program. Medicaid MCOs: Of interest to MCOs are the following budget amendments: Removes of the ER Triage fee for the CPT code Adds language to make the prior authorization requirements in HB 1942/SB 1262 apply to the MCOs. Removes Medicaid Expansion language. MMPs: Of interest to MMPs are the following budget amendments: DMAS shall provide quarterly reports about: CCC program enrollment; Ability of the MMPs to ensure robust provider networks; Resolution of provider concerns about cost ant technical difficulties to participate; Quality of care; and Progress in resolving issues related to Medicare requirements which impede efficient and effective delivery of care. DMAS shall require providers to use NPI numbers in order to participate in the CCC program. The budget was signed by the Governor with no recommended changes. 5/19/15 5