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Read Making a Killing

home / healthcare / in the media

The San Diego Union-Tribune
Jan 06, 2005

by Sarah Skidmore

HMOs must cover medically necessary drugs in California

California released regulations this week that require health maintenance organizations to cover any medically necessary prescriptions for members. The California Department of Managed Health Care said the guidelines are the first of their kind in the nation and will guarantee that patients have access to the drugs they need.

"Patients need to feel confident that when their doctor prescribes a necessary drug, their insurance will cover it at an affordable price," state Sen. Jackie Speier, D-San Francisco/San Mateo, said in a statement. "Patient health is the bottom line."

Speier sponsored legislation in 2002 that required the department to draft the regulations. The rules are open for public comment until Jan. 31, and the state will consider public input before making any necessary changes and implementing them later this year.

Under the regulations, every HMO that offers outpatient prescription drug benefits must provide all medically necessary prescription drugs. This would exclude, in some instances, drugs without a specific medical benefit such as those used for cosmetic purposes, weight loss or sexual performance. HMOs that want to exclude a drug must get the approval of the Department of Managed Health Care.

Additionally, co-payments for the drugs cannot exceed 50 percent of the price of the drug.

Still, consumer advocate Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights said the legislation went through with a good intent but was written in a way that allows insurers to charge more. "As is, the bottom line is access will be limited because consumers will be paying more out of pocket," Flanagan said. "Many consumers already cannot afford prescription drugs."

Bobby Pena, spokesman for the California Association of Health Plans, said it's unclear how the rules will affect plans. He said his group is still analyzing the guidelines.

One area the group is looking at closely is how the rules will affect use of generics, tiered pricing and, ultimately, savings on drugs, Pena said. "There are a number of different drugs that do the same thing," he said. "We believe as a health plan it's important to advocate for affordability as well.

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