Senate Commerce Committee Statement to Senate, No. 3533 — State of New Jersey (October 10, 2024)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 3533, State of New Jersey, dated October 10, 2024, reporting the bill favorably. The bill requires health insurance carriers and utilization review organizations to base step therapy protocols on clinical practice guidelines meeting listed standards, and to offer a clear process to request a step therapy exception. An exception must be granted where the required drug is contraindicated, expected to be ineffective, previously tried and discontinued, not in the patient's best interest, or where the patient is stable on another drug. Requests and appeals must be decided within 72 hours, or 24 hours in exigent circumstances, or are deemed granted, and carriers must report exception data to the Commissioner of Banking and Insurance.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
3533

STATE
OF NEW JERSEY

DATED: OCTOBER
10, 2024

The Senate Commerce Committee reports favorably Senate
Bill No. 3533.

This
bill requires health insurance carriers and utilization review organizations to
meet certain guidelines in the administration and review of step therapy
protocols. The bill defines “step therapy protocol” as 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
patient, are covered by a health benefits plan.

The
bill provides that clinical review criteria used to establish a step therapy
protocol are to 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) 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
following certain procedures outlined in the bill;

(3) are
based on high quality studies, research, and medical practice;

(4) are
created by an explicit and transparent process that minimizes biases and
conflicts of interest, explains the relationship between treatment options and
outcomes, rates the quality of the evidence supporting recommendations, and
considers relevant patient subgroups and preferences; and

(5) are
continually updated through a review of new evidence, research, and newly
developed treatments.

In
addition, the bill provides guidelines for the review of step therapy
exceptions. Under the bill, “step therapy exception” means the overriding of a
step therapy protocol in favor of immediate coverage of the health care
provider’s selected prescription drug.

The
bill provides that when coverage of a prescription drug for the treatment of
any medical condition is restricted for use by a carrier or utilization review
organization through the use of a step therapy protocol, the carrier or
utilization review organization is to provide the covered person and
prescribing practitioner a clear, readily accessible, and convenient process to
request a step therapy exception. Under the bill, a carrier or utilization
review organization may use its existing medical exceptions process to satisfy
this requirement. An explanation of the process is to be made available on the
carrier or utilization review organization’s website.

A
step therapy exception is to be granted if:

(1) the
required prescription drug is contraindicated or is likely to cause an adverse
reaction or physical or mental harm to the patient;

(2) the
required prescription drug 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 required prescription drug while under their current or a
previous health insurance or health benefits plan, or another prescription drug
in the same pharmacologic class or with the same mechanism of action and the
prescription drug was discontinued due to lack of efficacy or effectiveness,
diminished effect, or an adverse event;

(4) the
required prescription drug is not in the best interest of the patient, based on
medical necessity; or

(5) the
patient 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 benefits plan.

Under
the bill, when a step therapy exception is granted, the carrier or utilization
review organization is to authorize coverage for the prescription drug
prescribed by the patient’s treating health care provider.

The
bill provides that any step therapy exception is to be eligible for appeal by a
covered person. The carrier or utilization review organization is to grant or
deny a step therapy exception request or an appeal of a step therapy exception
request within 72 hours of receipt of the request or appeal. In cases where
exigent circumstances exist, the carrier or utilization review organization is
to respond within 24 hours of receipt of the request or appeal. If a response
by a carrier or utilization review organization is not received within the time
allotted, the exception or appeal is to be deemed granted.

The
bill also provides that a carrier or utilization review organization is to
report to the Commissioner of Banking and Insurance certain information
concerning the number and nature of step therapy exceptions requested,
appealed, denied, and granted.

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