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SF 934

3rd Engrossment - 89th Legislature (2015 - 2016) Posted on 03/24/2015 08:46am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to health care coverage; modifying utilization review and prior
authorization requirements for prescription drug coverage; requiring prescription
drug benefit transparency and disclosure; establishing a prescription drug
advisory council; requiring an annual report; amending Minnesota Statutes 2014,
sections 62J.497, subdivisions 1, 3, 4; 62M.02, subdivisions 12, 14, 15, 17, by
adding subdivisions; 62M.05, subdivisions 3a, 3b, 4; 62M.06, subdivisions 2, 3;
62M.07; 62M.09, subdivisions 3, 6; 62M.10, subdivision 7; 62M.11; 256B.0625,
subdivision 13f; 256B.69, subdivision 6; proposing coding for new law in
Minnesota Statutes, chapters 62M; 62Q.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2014, section 62J.497, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

For the purposes of this section, the following terms
have the meanings given.

(a) "Backward compatible" means that the newer version of a data transmission
standard would retain, at a minimum, the full functionality of the versions previously
adopted, and would permit the successful completion of the applicable transactions with
entities that continue to use the older versions.

(b) "Dispense" or "dispensing" has the meaning given in section 151.01, subdivision
30
. Dispensing does not include the direct administering of a controlled substance to a
patient by a licensed health care professional.

(c) "Dispenser" means a person authorized by law to dispense a controlled substance,
pursuant to a valid prescription.

(d) "Electronic media" has the meaning given under Code of Federal Regulations,
title 45, part 160.103.

(e) "E-prescribing" means the transmission using electronic media of prescription
or prescription-related information between a prescriber, dispenser, pharmacy benefit
manager, or group purchaser, either directly or through an intermediary, including
an e-prescribing network. E-prescribing includes, but is not limited to, two-way
transmissions between the point of care and the dispenser and two-way transmissions
related to eligibility, formulary, and medication history information.

(f) "Electronic prescription drug program" means a program that provides for
e-prescribing.

(g) "Group purchaser" has the meaning given in section 62J.03, subdivision 6new text begin , but
does not include workers' compensation plans or the medical component of automobile
insurance coverage
new text end .

(h) "HL7 messages" means a standard approved by the standards development
organization known as Health Level Seven.

(i) "National Provider Identifier" or "NPI" means the identifier described under Code
of Federal Regulations, title 45, part 162.406.

(j) "NCPDP" means the National Council for Prescription Drug Programs, Inc.

(k) "NCPDP Formulary and Benefits Standard" means the National Council for
Prescription Drug Programs Formulary and Benefits Standard, Implementation Guide,
Version 1, Release 0, October 2005.

(l) "NCPDP SCRIPT Standard" means the National Council for Prescription Drug
Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide
Version 8, Release 1 (Version 8.1), October 2005, or the most recent standard adopted by
the Centers for Medicare and Medicaid Services for e-prescribing under Medicare Part
D as required by section 1860D-4(e)(4)(D) of the Social Security Act, and regulations
adopted under it. The standards shall be implemented according to the Centers for
Medicare and Medicaid Services schedule for compliance. Subsequently released
versions of the NCPDP SCRIPT Standard may be used, provided that the new version
of the standard is backward compatible to the current version adopted by the Centers for
Medicare and Medicaid Services.

(m) "Pharmacy" has the meaning given in section 151.01, subdivision 2.

(n) "Prescriber" means a licensed health care practitioner, other than a veterinarian,
as defined in section 151.01, subdivision 23.

(o) "Prescription-related information" means information regarding eligibility for
drug benefits, medication history, or related health or drug information.

(p) "Provider" or "health care provider" has the meaning given in section 62J.03,
subdivision 8.

new text begin (q) "Utilization review organization" has the meaning given in section 62M.02,
subdivision 21.
new text end

Sec. 2.

Minnesota Statutes 2014, section 62J.497, subdivision 3, is amended to read:


Subd. 3.

Standards for electronic prescribing.

(a) Prescribers and dispensers
must use the NCPDP SCRIPT Standard for the communication of a prescription or
prescription-related information. The NCPDP SCRIPT Standard shall be used to conduct
the following transactions:

(1) get message transaction;

(2) status response transaction;

(3) error response transaction;

(4) new prescription transaction;

(5) prescription change request transaction;

(6) prescription change response transaction;

(7) refill prescription request transaction;

(8) refill prescription response transaction;

(9) verification transaction;

(10) password change transaction;

(11) cancel prescription request transaction; and

(12) cancel prescription response transaction.

(b) Providers, group purchasers, prescribers, and dispensers must use the NCPDP
SCRIPT Standard for communicating and transmitting medication history information.

(c) Providers, group purchasers, prescribers, and dispensers must use the NCPDP
Formulary and Benefits Standard for communicating and transmitting formulary and
benefit information.

new text begin (d) Group purchasers and utilization review organizations must develop processes to
ensure notification to prescribers upon denial of a claim for a prescribed drug that is not
covered or is not included on the group purchaser's formulary. The process must provide
a list of covered drugs from the same class or classes as the drug originally prescribed.
If the NCPDP SCRIPT Standard or the NCPDP Formulary and Benefits Standard do
not allow for the inclusion of this information, group purchasers and utilization review
organizations must develop telephone, facsimile, or other secure electronic processes to
communicate this information to the prescriber.
new text end

deleted text begin (d)deleted text end new text begin (e)new text end Providers, group purchasers, prescribers, and dispensers must use the national
provider identifier to identify a health care provider in e-prescribing or prescription-related
transactions when a health care provider's identifier is required.

deleted text begin (e)deleted text end new text begin (f)new text end Providers, group purchasers, prescribers, and dispensers must communicate
eligibility information and conduct health care eligibility benefit inquiry and response
transactions according to the requirements of section 62J.536.

Sec. 3.

Minnesota Statutes 2014, section 62J.497, subdivision 4, is amended to read:


Subd. 4.

Development and use of uniform formulary exception form.

(a) The
commissioner of health, in consultation with the Minnesota Administrative Uniformity
Committee, shall develop by July 1, 2009, a uniform formulary exception form that allows
health care providers to request exceptions from group purchaser formularies using a
uniform form. Upon development of the form, all health care providers must submit
requests for formulary exceptions using the uniform form, and all group purchasers must
accept this form from health care providers.

(b) deleted text begin No later than January 1, 2011,deleted text end The uniform formulary exception form must be
accessible and submitted by health care providers, and accepted and processed by group
purchasers, through secure electronic transmissions.

new text begin (c) Health care providers, group purchasers, prescribers, dispensers, and utilization
review organizations using paper forms for prescription drug prior authorization or for
medical exception requests as defined in section 62Q.83, subdivision 5, must only use the
uniform formulary exception form.
new text end

Sec. 4.

Minnesota Statutes 2014, section 62M.02, is amended by adding a subdivision
to read:


new text begin Subd. 10a. new text end

new text begin Drug. new text end

new text begin "Drug" has the meaning given in section 151.01, subdivision 5.
new text end

Sec. 5.

Minnesota Statutes 2014, section 62M.02, is amended by adding a subdivision
to read:


new text begin Subd. 11a. new text end

new text begin Formulary. new text end

new text begin "Formulary" has the meaning given in section 62Q.83,
subdivision 1.
new text end

Sec. 6.

Minnesota Statutes 2014, section 62M.02, subdivision 12, is amended to read:


Subd. 12.

Health benefit plan.

"Health benefit plan" means a policy, contract, or
certificate issued by a health plan company for the coverage of medical, dental, new text begin prescription
drug,
new text end or hospital benefits. A health benefit plan does not include coverage that is:

(1) limited to disability or income protection coverage;

(2) automobile medical payment coverage;

(3) supplemental to liability insurance;

(4) designed solely to provide payments on a per diem, fixed indemnity, or
nonexpense incurred basis;

(5) credit accident and health insurance issued under chapter 62B;

(6) blanket accident and sickness insurance as defined in section 62A.11;

(7) accident only coverage issued by a licensed and tested insurance agent; or

(8) workers' compensation.

Sec. 7.

Minnesota Statutes 2014, section 62M.02, subdivision 14, is amended to read:


Subd. 14.

Outpatient services.

"Outpatient services" means procedures or services
performed on a basis other than as an inpatient, and includes obstetrical, psychiatric,
chemical dependency, dental, new text begin prescription drug, new text end and chiropractic services.

Sec. 8.

Minnesota Statutes 2014, section 62M.02, is amended by adding a subdivision
to read:


new text begin Subd. 14b. new text end

new text begin Prescription. new text end

new text begin "Prescription" has the meaning given in section 151.01,
subdivision 16a.
new text end

Sec. 9.

Minnesota Statutes 2014, section 62M.02, is amended by adding a subdivision
to read:


new text begin Subd. 14c. new text end

new text begin Prescription drug order. new text end

new text begin "Prescription drug order" has the meaning
given in section 151.01, subdivision 16.
new text end

Sec. 10.

Minnesota Statutes 2014, section 62M.02, subdivision 15, is amended to read:


Subd. 15.

Prior authorization.

"Prior authorization" means utilization review
conducted prior to the delivery of a service, including an outpatient service.new text begin Prior
authorization includes, but is not limited to, preadmission review, pretreatment review,
quantity limits, step therapy, utilization, and case management. Prior authorization also
includes any utilization review organization's requirement that an enrollee or provider
notify the utilization review organization prior to providing a service, including an
outpatient service.
new text end

Sec. 11.

Minnesota Statutes 2014, section 62M.02, subdivision 17, is amended to read:


Subd. 17.

Provider.

"Provider" means a licensed health care facility, physician,
new text begin pharmacist, new text end or other health care professional that delivers health care services to an enrollee.

Sec. 12.

Minnesota Statutes 2014, section 62M.02, is amended by adding a subdivision
to read:


new text begin Subd. 18a. new text end

new text begin Quantity limit. new text end

new text begin "Quantity limit" means a limit on the number of doses
of a prescription drug that are covered during a specific time period.
new text end

Sec. 13.

Minnesota Statutes 2014, section 62M.02, is amended by adding a subdivision
to read:


new text begin Subd. 19a. new text end

new text begin Step therapy. new text end

new text begin "Step therapy" means clinical practice or other
evidence-based protocols or requirements that specify the sequence in which different
prescription drugs for a given medical condition are to be used by an enrollee before a
drug prescribed by a provider is covered.
new text end

Sec. 14.

Minnesota Statutes 2014, section 62M.05, subdivision 3a, is amended to read:


Subd. 3a.

Standard review determination.

(a) Notwithstanding subdivision 3b, an
initial determination on all requests for utilization review must be communicated to the
provider and enrollee in accordance with this subdivision within deleted text begin tendeleted text end new text begin fivenew text end business days of
the request, provided that all information reasonably necessary to make a determination on
the request has been made available to the utilization review organization.

(b) When an initial determination is made to certify, notification must be provided
promptly by telephone to the provider. The utilization review organization shall send
written notification to the provider or shall maintain an audit trail of the determination
and telephone notification. For purposes of this subdivision, "audit trail" includes
documentation of the telephone notification, including the date; the name of the person
spoken to; the enrollee; the service, procedure, or admission certified; and the date of
the service, procedure, or admission. If the utilization review organization indicates
certification by use of a number, the number must be called the "certification number."
For purposes of this subdivision, notification may also be made by facsimile to a verified
number or by electronic mail to a secure electronic mailbox. These electronic forms of
notification satisfy the "audit trail" requirement of this paragraph.

(c) When an initial determination is made not to certify, notification must be
provided by telephone, by facsimile to a verified number, or by electronic mail to a secure
electronic mailbox within one working day after making the determination to the attending
health care professional and hospital as applicable. Written notification must also be sent
to the hospital as applicable and attending health care professional if notification occurred
by telephone. For purposes of this subdivision, notification may be made by facsimile to a
verified number or by electronic mail to a secure electronic mailbox. Written notification
must be sent to the enrollee and may be sent by United States mail, facsimile to a verified
number, or by electronic mail to a secure mailbox. The written notification must include
the principal reason or reasons for the determination and the process for initiating an appeal
of the determination. Upon request, the utilization review organization shall provide the
provider or enrollee with the criteria used to determine the necessity, appropriateness,
and efficacy of the health care service and identify the database, professional treatment
parameter, or other basis for the criteria. Reasons for a determination not to certify may
include, among other things, the lack of adequate information to certify after a reasonable
attempt has been made to contact the provider or enrollee.

(d) When an initial determination is made not to certify, the written notification must
inform the enrollee and the attending health care professional of the right to submit an
appeal to the internal appeal process described in section 62M.06 and the procedure for
initiating the internal appeal. The written notice shall be provided in a culturally and
linguistically appropriate manner consistent with the provisions of the Affordable Care
Act as defined under section 62A.011, subdivision 1a.

Sec. 15.

Minnesota Statutes 2014, section 62M.05, subdivision 3b, is amended to read:


Subd. 3b.

Expedited review determination.

(a) An expedited initial determination
must be utilized if the attending health care professional believes that an expedited
determination is warranted.

(b) Notification of an expedited initial determination to either certify or not to certify
must be provided to the hospital, the attending health care professional, and the enrollee as
expeditiously as the enrollee's medical condition requires, but no later than deleted text begin 72deleted text end new text begin 36new text end hours
from the initial request. When an expedited initial determination is made not to certify, the
utilization review organization must also notify the enrollee and the attending health care
professional of the right to submit an appeal to the expedited internal appeal as described
in section 62M.06 and the procedure for initiating an internal expedited appeal.

Sec. 16.

Minnesota Statutes 2014, section 62M.05, subdivision 4, is amended to read:


Subd. 4.

Failure to provide necessary information.

A utilization review
organization must have written procedures to address the failure of a provider or
enrollee to provide the necessary information for reviewnew text begin , and to address processes by
which the utilization review organization must track and manage review requests and
documentation submitted by providers or enrollees
new text end . If the enrollee or provider will not
release the necessary information to the utilization review organization, the utilization
review organization may deny certification in accordance with its own policy or the policy
described in the health benefit plan.new text begin If a utilization review organization fails to meet the
timelines in subdivision 3a or 3b for a completed review request, or fails to notify the
provider that information needed to conduct the review is incomplete, or if a utilization
review organization fails to properly maintain submitted records for which the provider or
enrollee has documentation of submission, the service shall be deemed approved.
new text end

Sec. 17.

Minnesota Statutes 2014, section 62M.06, subdivision 2, is amended to read:


Subd. 2.

Expedited appeal.

(a) When an initial determination not to certify a
health care service is made prior to or during an ongoing service requiring review
and the attending health care professional believes that the determination warrants an
expedited appeal, the utilization review organization must ensure that the enrollee and the
attending health care professional have an opportunity to appeal the determination over
the telephone on an expedited basis. In such an appeal, the utilization review organization
must ensure reasonable access to its consulting physician or health care provider.

(b) The utilization review organization shall notify the enrollee and attending
health care professional by telephone of its determination on the expedited appeal as
expeditiously as the enrollee's medical condition requires, but no later than deleted text begin 72deleted text end new text begin 36new text end hours
after receiving the expedited appeal.

(c) If the determination not to certify is not reversed through the expedited appeal,
the utilization review organization must include in its notification the right to submit the
appeal to the external appeal process described in section 62Q.73 and the procedure for
initiating the process. This information must be provided in writing to the enrollee and
the attending health care professional as soon as practical.

Sec. 18.

Minnesota Statutes 2014, section 62M.06, subdivision 3, is amended to read:


Subd. 3.

Standard appeal.

The utilization review organization must establish
procedures for appeals to be made either in writing or by telephone.

(a) A utilization review organization shall notify in writing the enrollee, attending
health care professional, and claims administrator of its determination on the appeal within
deleted text begin 30deleted text end new text begin 15new text end days upon receipt of the notice of appeal. If the utilization review organization
cannot make a determination within deleted text begin 30deleted text end new text begin 15new text end days due to circumstances outside the control
of the utilization review organization, the utilization review organization may take up
to deleted text begin 14deleted text end new text begin tennew text end additional days to notify the enrollee, attending health care professional, and
claims administrator of its determination. If the utilization review organization takes any
additional days beyond the initial deleted text begin 30-daydeleted text end new text begin 15-daynew text end period to make its determination, it
must inform the enrollee, attending health care professional, and claims administrator, in
advance, of the extension and the reasons for the extension.

(b) The documentation required by the utilization review organization may include
copies of part or all of the medical record and a written statement from the attending
health care professional.

(c) Prior to upholding the initial determination not to certify for clinical reasons, the
utilization review organization shall conduct a review of the documentation by a physician
who did not make the initial determination not to certify.

(d) The process established by a utilization review organization may include
defining a period within which an appeal must be filed to be considered. The time period
must be communicated to the enrollee and attending health care professional when the
initial determination is made.

(e) An attending health care professional or enrollee who has been unsuccessful in
an attempt to reverse a determination not to certify shall, consistent with section 72A.285,
be provided the following:

(1) a complete summary of the review findings;

(2) qualifications of the reviewers, including any license, certification, or specialty
designation; and

(3) the relationship between the enrollee's diagnosis and the review criteria used as
the basis for the decision, including the specific rationale for the reviewer's decision.

(f) In cases of appeal to reverse a determination not to certify for clinical reasons,
the utilization review organization must ensure that a physician of the utilization review
organization's choice in the same or a similar specialty as typically manages the medical
condition, procedure, or treatment under discussion is reasonably available to review
the case.

(g) If the initial determination is not reversed on appeal, the utilization review
organization must include in its notification the right to submit the appeal to the external
review process described in section 62Q.73 and the procedure for initiating the external
process.

Sec. 19.

Minnesota Statutes 2014, section 62M.07, is amended to read:


62M.07 PRIOR AUTHORIZATION OF SERVICES.

(a) Utilization review organizations conducting prior authorization of services must
have written standards that meet at a minimum the following requirements:

(1) written procedures and criteria used to determine whether care is appropriate,
reasonable, or medically necessary;

(2) a system for providing prompt notification of its determinations to enrollees
and providers and for notifying the provider, enrollee, or enrollee's designee of appeal
procedures under clause (4);

(3) compliance with section 62M.05, subdivisions 3a and 3b, regarding time frames
for approving and disapproving prior authorization requests;

(4) written procedures for appeals of denials of prior authorization which specify the
responsibilities of the enrollee and provider, and which meet the requirements of sections
62M.06 and 72A.285, regarding release of summary review findings; and

(5) procedures to ensure confidentiality of patient-specific information, consistent
with applicable law.

(b) No utilization review organization, health plan company, or claims administrator
may conduct or require prior authorization of emergency confinement or emergency
treatment. The enrollee or the enrollee's authorized representative may be required to
notify the health plan company, claims administrator, or utilization review organization
as soon after the beginning of the emergency confinement or emergency treatment as
reasonably possible.

(c) If prior authorization for a health care service is required, the utilization review
organization, health plan company, or claim administrator must allow providers to submit
requests for prior authorization of the health care services without unreasonable delay
by telephone, facsimile, or voice mail or through an electronic mechanism 24 hours a
day, seven days a week. This paragraph does not apply to dental service covered under
MinnesotaCare, general assistance medical care, or medical assistance.

new text begin (d) Any authorization for a prescription drug must remain valid for the duration of
an enrollee's contract term, provided the drug continues to be prescribed for a patient with
a condition that requires ongoing medication therapy, provided the drug has not otherwise
been deemed unsafe by the Food and Drug Administration, has not been withdrawn by the
manufacturer or the Food and Drug Administration, or provided no independent source
of research, clinical guidelines, or evidence-based standards has issued drug-specific
warnings or recommended changes in drug usage.
new text end

new text begin (e) No utilization review organization, health plan company, or claims administrator
may impose step therapy requirements for enrollees currently taking a prescription drug,
as substantiated from available claims data or provider documentation, in one of the
following classes: (1) immunosuppressants; (2) antidepressants; (3) antipsychotics; (4)
anticonvulsants; (5) antiretrovirals; or (6) antineoplastics.
new text end

Sec. 20.

Minnesota Statutes 2014, section 62M.09, subdivision 3, is amended to read:


Subd. 3.

Physician reviewer involvement.

(a) A physician must review all cases
in which the utilization review organization has concluded that a determination not to
certify for clinical reasons is appropriate.

(b) The physician conducting the review must be licensed in this state. deleted text begin This
paragraph does not apply to reviews conducted in connection with policies issued by a
health plan company that is assessed less than three percent of the total amount assessed
by the Minnesota Comprehensive Health Association.
deleted text end

(c) The physician should be reasonably available by telephone to discuss the
determination with the attending health care professional.

(d) This subdivision does not apply to outpatient mental health or substance abuse
services governed by subdivision 3a.

Sec. 21.

Minnesota Statutes 2014, section 62M.09, subdivision 6, is amended to read:


Subd. 6.

Physician consultants.

A utilization review organization must use
physician consultants in the appeal process described in section 62M.06, subdivision 3.
The physician consultants must be new text begin licensed in this state and must be new text end board certified by the
American Board of Medical Specialists or the American Board of Osteopathy.

Sec. 22.

Minnesota Statutes 2014, section 62M.10, subdivision 7, is amended to read:


Subd. 7.

Availability of criteria.

Upon request, a utilization review organization
shall provide to an enrollee, a provider, and the commissioner of commerce the new text begin written
clinical
new text end criteria used to determine the medical necessity, appropriateness, and efficacy of
a procedure or service and identify the database, professional treatment guideline, or
other basis for the criteria.

Sec. 23.

Minnesota Statutes 2014, section 62M.11, is amended to read:


62M.11 COMPLAINTS TO COMMERCE OR HEALTH.

Notwithstanding the provisions of sections 62M.01 to 62M.16, an enrollee new text begin or
provider
new text end may file a complaint regarding new text begin compliance with the requirements of this chapter
or regarding
new text end a determination not to certify directly to the commissioner responsible for
regulating the utilization review organization.

Sec. 24.

new text begin [62M.17] REPORTING.
new text end

new text begin Utilization review organizations must annually report to the commissioner of health,
on the forms and in the manner specified by the commissioner, the following information:
new text end

new text begin (1) for medical exception requests, the 25 most frequently requested drugs by
exception type, including lack of available clinical alternative, ineffective formulary
drug, and dosage limits; and
new text end

new text begin (2) for prescription drug prior authorization requests:
new text end

new text begin (i) the number and rate of initial approvals by commercial product and by prepaid
medical assistance product types;
new text end

new text begin (ii) the number and rate of standard appeal approvals by commercial product and by
prepaid medical assistance product types;
new text end

new text begin (iii) the number and rate of expedited appeal approvals by commercial product and
by prepaid medical assistance product types;
new text end

new text begin (iv) for standard reviews, the range and average time from receipt of completed
request to notification of decision;
new text end

new text begin (v) for expedited reviews, the range and average time from receipt of completed
request to notification of decision;
new text end

new text begin (vi) for standard appeals, the range and average time from receipt of completed
request to notification of decision; and
new text end

new text begin (vii) for expedited appeals, the range and average time from receipt of completed
request to notification of decision.
new text end

Sec. 25.

new text begin [62Q.83] PRESCRIPTION DRUG BENEFIT TRANSPARENCY AND
MANAGEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms
have the meaning given them.
new text end

new text begin (b) "Drug" has the meaning given in section 151.01, subdivision 5.
new text end

new text begin (c) "Formulary" means a list of prescription drugs that have been developed by
clinical and pharmacy experts and represents the health plan company's medically
appropriate and cost-effective prescription drugs approved for use.
new text end

new text begin (d) "Health plan company" has the meaning given in section 62Q.01, subdivision 4,
and includes an entity that performs pharmacy benefits management for the health plan
company. For purposes of this definition, "pharmacy benefits management" means the
administration or management of prescription drug benefits provided by the health plan
company for the benefit of its enrollees and may include, but is not limited to, procurement
of prescription drugs, clinical formulary development and management services, claims
processing, and rebate contracting and administration.
new text end

new text begin (e) "Prescription" has the meaning given in section 151.01, subdivision 16a.
new text end

new text begin Subd. 2. new text end

new text begin Prescription drug benefit disclosure. new text end

new text begin (a) A health plan company that
provides prescription drug benefit coverage and uses a formulary must make its formulary
and related benefit information available by electronic means and, upon request, in
writing, at least 30 days prior to annual renewal dates.
new text end

new text begin (b) Formularies must be organized and disclosed consistent with the most recent
version of the United States Pharmacopeia's (USP) Model Guidelines.
new text end

new text begin (c) For each item or category of items on the formulary, the specific enrollee benefit
terms must be identified, including enrollee cost-sharing and expected out-of-pocket costs.
new text end

new text begin Subd. 3. new text end

new text begin Formulary changes. new text end

new text begin (a) Once a formulary has been established, a health
plan company may, at any time during the enrollee's contract year:
new text end

new text begin (1) expand its formulary by adding drugs to the formulary;
new text end

new text begin (2) reduce co-payments or co-insurance; or
new text end

new text begin (3) move a drug to a benefit category that reduces an enrollee's cost.
new text end

new text begin (b) A health plan company may remove a brand name drug from its formulary
or place a brand name drug in a benefit category that increases an enrollee's cost only
upon the addition to the formulary of an A-rated generic or multisource brand name
equivalent at a lower cost to the enrollee, and upon at least a 60-day notice to prescribers,
pharmacists, and affected enrollees.
new text end

new text begin (c) A health plan company is prohibited from removing drugs from its formulary or
moving drugs to a benefit category that increases an enrollee's cost during the enrollee's
contract year. This paragraph does not apply to any changes associated with drugs that
have been deemed unsafe by the Food and Drug Administration, that have been withdrawn
by either the Food and Drug Administration or the product manufacturer, or where an
independent source of research, clinical guidelines, or evidence-based standards has issued
drug-specific warnings or recommended changes in drug usage.
new text end

new text begin Subd. 4. new text end

new text begin Transition process. new text end

new text begin (a) A health plan company must establish and
maintain a transition process to prevent gaps in prescription drug coverage for both
new and continuing enrollees with ongoing prescription drug needs who are affected
by changes in formulary drug availability.
new text end

new text begin (b) The transition process must provide coverage for at least 60 days.
new text end

new text begin (c) Any enrollee cost-sharing applied must be based on the defined prescription drug
benefit terms and must be consistent with any cost-sharing that the health plan company
would charge for nonformulary drugs approved under a medication exceptions process.
new text end

new text begin (d) A health plan company must ensure that written notice is provided to each
affected enrollee and prescriber within three business days after adjudication of the
transition coverage.
new text end

new text begin Subd. 5. new text end

new text begin Medical exceptions process. new text end

new text begin (a) Each health plan company must
establish and maintain a medical exceptions process that allows enrollees, providers,
or an enrollee's authorized representative to request and obtain coverage approval in
the following situations:
new text end

new text begin (1) there is no acceptable clinical alternative listed on the formulary to treat the
enrollee's disease or medical condition;
new text end

new text begin (2) the prescription listed on the formulary has been ineffective in the treatment of
an enrollee's disease or medical condition or, based on clinical and scientific evidence and
the relevant physical or mental characteristics of the enrollee, is likely to be ineffective or
adversely affect the drug's effectiveness or the enrollee's medication compliance; or
new text end

new text begin (3) the number of doses that are available under a dose restriction has been
ineffective in the treatment of the enrollee's disease or medical condition or, based on
clinical and scientific evidence and the relevant physical or mental characteristics of
the enrollee, is likely to be ineffective or adversely affect the drug's effectiveness or the
enrollee's medication compliance.
new text end

new text begin (b) An approved medical exception request must remain valid for the duration of
an enrollee's contract term, provided the medication continues to be prescribed for the
same condition, and provided the medication has not otherwise been withdrawn by the
manufacturer or the Food and Drug Administration.
new text end

new text begin (c) The medical exceptions process must comply with the requirements of chapter
62M.
new text end

new text begin Subd. 6. new text end

new text begin Prescription Drug Advisory Council. new text end

new text begin (a) A Prescription Drug Advisory
Council has 11 members appointed by the commissioner of health with representation
as follows:
new text end

new text begin (1) three patients;
new text end

new text begin (2) one physician licensed to practice medicine in Minnesota;
new text end

new text begin (3) two nonphysicians who are licensed in Minnesota to prescribe prescription drugs;
new text end

new text begin (4) one pharmacist licensed in Minnesota;
new text end

new text begin (5) one person representing a health plan company;
new text end

new text begin (6) one person representing a pharmacy benefit manager;
new text end

new text begin (7) one person representing pharmaceutical manufacturers; and
new text end

new text begin (8) one person who purchases health benefits for a group or an employer.
new text end

new text begin (b) Terms and removal of public members are as provided in section 15.0575, except
that members will serve without compensation or expense reimbursement. A vacancy on
the council may be filled by the appointing authority for the remainder of the unexpired
term. Vacancies will be filled as provided in section 15.0597.
new text end

new text begin (c) The council shall select a chair from among its members. The chair may convene
meetings as necessary to conduct the duties prescribed by this section.
new text end

new text begin (d) The duty of the council is to provide guidance to the commissioner of health
in monitoring changes and trends in prescription drug coverage and formulary design.
The council must consult with the commissioner to assist the commissioner in preparing
the report required under paragraph (g).
new text end

new text begin (e) The commissioner of health will provide administrative support and meeting
space for the council to perform its duties.
new text end

new text begin (f) The Prescription Drug Advisory Council expires on January 30, 2021.
new text end

new text begin (g) Beginning January 15, 2017, and on at least a biennial basis thereafter, the
commissioner, in consultation with the advisory group, shall submit a report to the
chairs and lead minority members of the legislative committees with jurisdiction over
health care coverage describing trends in prescription drug coverage, formulary design,
medication exception requests, and benefit design. Health plan companies must cooperate
in providing information necessary for the advisory group to carry out its responsibilities.
new text end

Sec. 26.

Minnesota Statutes 2014, section 256B.0625, subdivision 13f, is amended to
read:


Subd. 13f.

Prior authorization.

(a) The Formulary Committee shall review and
recommend drugs which require prior authorization. The Formulary Committee shall
establish general criteria to be used for the prior authorization of brand-name drugs for
which generically equivalent drugs are available, but the committee is not required to
review each brand-name drug for which a generically equivalent drug is available.

(b) Prior authorization may be required by the commissioner before certain
formulary drugs are eligible for payment. The Formulary Committee may recommend
drugs for prior authorization directly to the commissioner. The commissioner may also
request that the Formulary Committee review a drug for prior authorization. Before the
commissioner may require prior authorization for a drug:

(1) the commissioner must provide information to the Formulary Committee on the
impact that placing the drug on prior authorization may have on the quality of patient care
and on program costs, information regarding whether the drug is subject to clinical abuse
or misuse, and relevant data from the state Medicaid program if such data is available;

(2) the Formulary Committee must review the drug, taking into account medical and
clinical data and the information provided by the commissioner; and

(3) the Formulary Committee must hold a public forum and receive public comment
for an additional 15 days.

The commissioner must provide a 15-day notice period before implementing the prior
authorizationnew text begin and may only update prior authorization requirements on an annual
basis unless a drug has been deemed unsafe by the Food and Drug Administration,
has been withdrawn by the manufacturer or the Food and Drug Administration, or an
independent source of research, clinical guidelines, or evidence-based standards has issued
drug-specific warnings or recommended changes in drug usage
new text end .

(c) Except as provided in subdivision 13j, prior authorization shall not be required or
utilized for any atypical antipsychotic drug prescribed for the treatment of mental illness if:

(1) there is no generically equivalent drug available; and

(2) the drug was initially prescribed for the recipient prior to July 1, 2003; or

(3) the drug is part of the recipient's current course of treatment.

This paragraph applies to any multistate preferred drug list or supplemental drug rebate
program established or administered by the commissioner. Prior authorization shall
automatically be granted for 60 days for brand name drugs prescribed for treatment of
mental illness within 60 days of when a generically equivalent drug becomes available,
provided that the brand name drug was part of the recipient's course of treatment at the
time the generically equivalent drug became available.

(d) Prior authorization shall not be required or utilized for any antihemophilic factor
drug prescribed for the treatment of hemophilia and blood disorders where there is no
generically equivalent drug available if the prior authorization is used in conjunction with
any supplemental drug rebate program or multistate preferred drug list established or
administered by the commissioner.

(e) The commissioner may require prior authorization for brand name drugs
whenever a generically equivalent product is available, even if the prescriber specifically
indicates "dispense as written-brand necessary" on the prescription as required by section
151.21, subdivision 2.

(f) Notwithstanding this subdivision, the commissioner may automatically require
prior authorization, for a period not to exceed 180 days, for any drug that is approved by
the United States Food and Drug Administration on or after July 1, 2005. The 180-day
period begins no later than the first day that a drug is available for shipment to pharmacies
within the state. The Formulary Committee shall recommend to the commissioner general
criteria to be used for the prior authorization of the drugs, but the committee is not
required to review each individual drug. In order to continue prior authorizations for a
drug after the 180-day period has expired, the commissioner must follow the provisions
of this subdivision.

Sec. 27.

Minnesota Statutes 2014, section 256B.69, subdivision 6, is amended to read:


Subd. 6.

Service delivery.

(a) Each demonstration provider shall be responsible for
the health care coordination for eligible individuals. Demonstration providers:

(1) shall authorize and arrange for the provision of all needed health services
including but not limited to the full range of services listed in sections 256B.02,
subdivision 8
, and 256B.0625 in order to ensure appropriate health care is delivered to
enrollees. Notwithstanding section 256B.0621, demonstration providers that provide
nursing home and community-based services under this section shall provide relocation
service coordination to enrolled persons age 65 and over;

(2) shall accept the prospective, per capita payment from the commissioner in return
for the provision of comprehensive and coordinated health care services for eligible
individuals enrolled in the program;

(3) may contract with other health care and social service practitioners to provide
services to enrollees; and

(4) shall institute recipient grievance procedures according to the method established
by the project, utilizing applicable requirements of chapter 62D. Disputes not resolved
through this process shall be appealable to the commissioner as provided in subdivision 11.

(b) Demonstration providers must comply with the standards for claims settlement
under section 72A.201, subdivisions 4, 5, 7, and 8, when contracting with other health
care and social service practitioners to provide services to enrollees. A demonstration
provider must pay a clean claim, as defined in Code of Federal Regulations, title 42,
section 447.45(b), within 30 business days of the date of acceptance of the claim.

new text begin (c) Managed care plans and county-based purchasing plans must comply with
chapter 62M and section 62Q.83.
new text end

Sec. 28. new text begin PRESCRIPTION DRUG ADVISORY COUNCIL.
new text end

new text begin The commissioner of health shall make the first appointments to the Prescription
Drug Advisory Council established in Minnesota Statutes, section 62Q.83, subdivision 6,
by October 2, 2015, and convene the first meeting by November 1, 2015. The council will
select a chair from among its members at the first meeting of the council.
new text end

Sec. 29. new text begin REVISOR INSTRUCTION.
new text end

new text begin The revisor of statutes shall change "sections 62M.01 to 62M.16" to "sections
62M.01 to 62M.17" wherever the term appears in Minnesota Statutes, chapter 62M.
new text end