SECTION 1. Chapter 118E of the General Laws, as appearing in the 2018 Official Edition, is hereby amended by inserting after section 10M the following section:-

Section 10M. (a) As used in this section, the terms “Clinical review criteria” and “utilization review organization” shall have the same meaning as those terms are defined in section 1 of chapter 176O.

(b) As used in this section, the terms “Medically necessary” and “Step therapy exception” shall have the same meaning as those terms are defined in section 12A of chapter 176O.

(c) “Step therapy protocol” means a protocol, policy, or program that establishes the specific sequence in which prescription drugs for a specified medical condition and medically appropriate for a particular enrollee are covered by MassHealth or a managed care organization or utilization review organization contracted with MassHealth.

(d)(1) On or after January 1, 2021, when coverage of a prescription drug for the treatment of any medical condition is restricted for use by MassHealth, or by a managed care organization or utilization review organization contracted with MassHealth to provide coverage to enrollees, through the use of a step therapy protocol, a request for exception from such requirements shall be expeditiously granted if:

(A) The required prescription drug is contraindicated or will likely cause an adverse reaction by or physical or mental harm to the enrollee;

(B) The required prescription drug is expected to be ineffective based on the known clinical characteristics of the enrollee and the known characteristics of the prescription drug regimen;

(C) The enrollee has tried the required prescription drug while covered under MassHealth, a managed care organization or utilization review organization contracted with MassHealth or a previous health insurance or health benefit plan, or another prescription drug in the same pharmacologic class or with the same mechanism of action and such prescription drug was discontinued due to lack of efficacy or effectiveness, diminished effect, or an adverse event;

(D) The required prescription drug is not in the best interest of the enrollee, based on medical necessity.

(E) The enrollee is stable on a prescription drug selected by their health care provider for the medical condition under consideration while covered under MassHealth, a managed care organization or utilization review organization contracted with MassHealth or previous health insurance or health benefit plan.

(2) Upon the granting of a step therapy exception, MassHealth or a managed care organization or utilization review organization contracted with MassHealth shall authorize coverage for the prescription drug prescribed by the enrollee’s treating health care provider.

(3) The MassHealth or a managed care organization or utilization review organization contracted with MassHealth review process for step therapy exception requests shall meet the requirements set forth in 1972(d)(5)(A) of the federal Social Security Act.

(e) Nothing in this section shall be construed to prevent:

(1) A pharmacist from effecting substitutions of prescription drugs consistent with of section 12D of chapter 112;

(2) A health care provider from prescribing a prescription drug that is determined to be medically appropriate.

SECTION 2. Chapter 176O of the General Laws, as so appearing, is hereby amended by inserting after section 12 the following 2 sections:-

Section 12A. (a) As used in this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:-

“Clinical practice guidelines” means a systematically developed statement to assist decision making by health care providers and insureds decisions about appropriate healthcare for specific clinical circumstances and conditions.

“Medically necessary” mean health services and supplies that under the applicable standard of care are appropriate: (a) to improve or preserve health, life, or function; (b) to slow the deterioration of health, life, or function; or (c) for the early screening, prevention, evaluation, diagnosis or treatment of a disease, condition, illness or injury.

“Step therapy protocol” means a protocol, policy, or program that establishes the specific sequence in which prescription drugs for a specified medical condition and medically appropriate for a particular insured are covered by a carrier.

“Step therapy exception” means that a step therapy protocol should be overridden in favor of immediate coverage of the health care provider’s selected prescription drug.

(b)(1) Clinical review criteria used to establish a step therapy protocol shall not require an insured to utilize a medication that is not likely to be clinically effective for the prescribed purpose, based on peer-reviewed clinical evidence, in order to obtain coverage for a prescribed medication. Any requirement to utilize a medication other than that prescribed shall be subject to the processes in subsection (c) to ensure an insured’s access to a prescription drug that is likely to be clinically effective for that insured’s individual clinical circumstances.

(2) When establishing a step therapy protocol, a carrier or a utilization review organization shall also take into account the needs of atypical patient populations and diagnoses when establishing clinical review criteria.

(3) This section shall not be construed to require a carrier or a utilization review organization to set up a new entity to develop clinical review criteria used for step therapy protocols.

(c)(1) When coverage of a prescription drug for the treatment of any medical condition is restricted for use by a carrier or a utilization review organization through the use of a step therapy protocol, the insured and prescribing practitioner shall have access to a clear readily accessible and convenient process to request a step therapy exception. A carrier or a utilization review organization may use its existing medical exceptions process to satisfy this requirement. The process shall be made easily accessible on a carrier or a utilization review organization’s website.

(2) A step therapy exception shall be expeditiously granted if:

(A) The prescription drug required under the step therapy protocol is contraindicated or will likely cause an adverse reaction by or physical or mental harm to the insured;

(B) The required prescription drug is expected to be ineffective based on the known clinical characteristics of the insured and the known characteristics of the prescription drug regimen;

(C) The insured or prescribing clinician has provided documentation to the a carrier or a utilization review organization establishing that the insured has previously tried the required prescription drug, or another prescription drug in the same pharmacologic class or with the same mechanism of action and such prescription drug was discontinued due to lack of efficacy or effectiveness, diminished effect, or an adverse event;

(D) The required prescription drug is not in the best interest of the insured, based on medical necessity.

(E) The insured or prescribing clinician has provided documentation to a carrier or a utilization review organization establishing that the insured is stable on a prescription drug selected by their health care provider for the medical condition under consideration while on a current or previous health insurance or health benefit plan. In such instances, a carrier or a utilization review organization shall have a continuity of care policy in place to ensure that the insured does not experience any delay in accessing the drug while the exception request is being reviewed.

(3) Upon the granting of a step therapy exception, a carrier or a utilization review organization shall authorize coverage for the prescription drug prescribed by the insured’s treating health care provider.

(4) A carrier or a utilization review organization shall grant or deny a step therapy exception request or an appeal within 72 hours following the receipt of all necessary information to establish the medical necessity of the prescribed treatment. If additional delay would result in significant risk to the insured’s health or well-being, a carrier or a utilization review organization shall respond within 24 hours of receipt of all necessary information to establish the medical necessity of the required treatment. Should a response by a carrier or a utilization review organization not be received within the time allotted, the exception or appeal shall be deemed granted.

(5) This section shall apply to carriers that provide coverage of a prescription drug pursuant to a policy that meets the definition of a medication step therapy protocol, regardless of whether the policy is described as a step therapy protocol.

(d) Any step therapy exception shall be eligible for appeal by an insured.

(e) Notwithstanding any law to the contrary, the division shall promulgate any regulations necessary to enforce this section.

(f) This section shall apply only to a health benefit plans delivered, issued for delivery, or renewed or after January 1, 2021.

(g) A carrier or a utilization review organization shall report to the division annually, in a format prescribed by the division, the following information: (i) the number of step therapy exception requests received; (ii) the type of health care providers or the medical specialties of the health care providers submitting requests; (iii) the number of requests by exception that were initially denied and the reasons for the denials; (iv) the number of requests by exception that were initially approved; and (v) the number of denials by exception that were reversed by internal appeals or an external reviews.

Section 12B. There shall be a commission on step therapy protocols within the division. The commission shall consist of: the commissioner of insurance or the commissioner’s designee, who shall chair the commission; executive director of the health policy commission or the director’s designee; the assistant secretary for MassHealth or the assistant secretary’s designee; the executive director of the Center of Health Information and Analysis or the director’s designee; a member representing the Massachusetts Public Health Association; and 6 members to be selected by the Governor including: a member representing Blue Cross Blue Shield of Massachusetts, a member representing the Massachusetts Association of Health Plans, two members representing patient advocacy organizations, a member representing an employer organization, a member currently practicing as a licensed physician in Massachusetts, and a member currently practicing as a licensed clinician other than a physician who has prescribing authority under the scope of licensure.

The commission on step therapy protocol shall study and assess the implementation of step therapy process reforms enacted pursuant to section 12A and section 10M of chapter 118E. The study shall analyze the impact of step therapy protocols on total medical expenses, health care quality outcomes, premium cost, and out-of-pocket costs to the consumer, and the health care cost benchmark. The study shall also examine any available empirical data on the impact of step therapy protocols on health disparities as relates to outcomes, access and medication adherence in the Commonwealth.

The commission shall convene no later than ninety days of the effective date of this act and meet as needed to meet the reporting requirements of this section.

The commission on step therapy protocols shall submit to the secretary of health and human services and the joint committee on health care financing, nine months after the effective date of this act and biennially thereafter, a report that includes findings from the commission’s review along with recommendations and any suggested legislation to implement those recommendations.