LDOI Issues Notice of Intent Regarding Regulation 100: Coverage of Prescription Drugs through a Drug Formulary

Proposed Regulation 100 drafted by the Louisiana Department of Insurance requires three different and distinct types of notice by health insurance plan issuers to enrollees with respect to coverage of prescription drugs through a drug formulary, and requires approval by the Department of certain modifications to prescription drug coverage.
The Louisiana Department of Insurance has released a Notice of Intent in the January edition of the Louisiana Register proposing Regulation 100 pertaining to the recently enacted Coverage of Prescription Drugs through a Drug Formulary Subpart of the Louisiana Insurance Code. Proposed Regulation 100 includes provisions intended to clarify and implement the Drug Formulary Subpart, which establishes certain restrictions and requirements for health insurance companies issuing health benefit plans that cover prescription drugs and that use one or more drug formularies to indicate the prescription drugs covered under such plans.[1]

Proposed Regulation 100 requires three different and distinct types of notice.
The Drug Formulary Subpart requires a notice in "plain language" to each enrollee of any affected health plan that the plan uses a drug formulary and certain other information. Proposed Regulation 100 uses this requirement as the basis for the first of "three different and distinct types of notice" that a health insurance plan issuer must provide to its enrollees.[2]

Under proposed Regulation 100, the first notice must include the following:
  • The fact that the health plan uses one or more drug formularies;
  • An explanation of how a drug formulary functions;
  • A description of how prescription drugs are designated for inclusion or exclusion in a drug formulary;
  • A statement of how often the drug formulary is reviewed;
  • A statement that an enrollee may contact the health insurer to determine whether a specific drug is included in a particular drug formulary;
  • A statement that the inclusion of a drug in a drug formulary does not guarantee that an enrollee's physician or other authorized prescriber will prescribe the drug in any particular instance.[3]
The form of this notice must be submitted to the Department for approval, and once it has been approved, the issuer may only use that form.

Plans must offer any drug previously covered under the plan at the same cost until the plan renewal date.
The Drug Formulary Subpart also requires that a health plan issuer offer any prescription drug approved or covered under the plan for a medical condition or illness, regardless of whether the drug is removed from the health plan drug formulary before the enrollee's plan renewal date, to each enrollee at the contracted benefit level until the plan renewal date.[4]

The second notice required by health plan issuers under proposed Regulation 100 provides enrollees with information regarding this provision of the Subpart. Plan issuers must maintain written records of enrollees who request confirmation of coverage, including the name of the enrollee, the specific drug, the date of the request and the date of the response by the plan issuer. Further, plan issuers must submit a copy of these written records to the Department with fifteen (15) days of a written request by the Department.[5]

Health plan issuers must notify all enrollees of any modification of drug benefit coverage.
The third notice promulgated under proposed Regulation 100 requires that health plan issuers inform enrollees, in both the individual and the small or large group markets, of the modification of benefit coverage or drug coverage of a particular product. This notice must be provided to all enrollees, including employers in the case of group coverage, at least sixty (60) days prior to the effective date of any such modification.[6]

Proposed Regulation 100 also defines what a "modification affecting drug coverage" means under the law:
  1. Removing a drug from a drug formulary;
  2. Adding a requirement that an enrollee receive prior authorization for a drug;
  3. Imposing or altering a quantity limit for a drug;
  4. Imposing a step-therapy restriction for a drug;
  5. Moving a drug to a higher cost-sharing tier, unless a generic alternative is available.[7]
Any such modification affecting drug coverage must be submitted to the Department for approval 120 days prior to the renewal date of the policy form for which it is intended. [8]

A health plan issuer may only modify its prescription drug coverage if the following conditions are met:
  1. The modification occurs at the time of coverage renewal;
  2. The modification is approved by the Department;
  3. The modification is consistent with state law;
  4. The modification is effective on a uniform basis; and
  5. The plan issuer notifies the enrollees (including the employer in the case of group coverage) at least sixty (60) days prior to the effective date of the modification.[9]
The Notice of Intent regarding Louisiana Department of Insurance Regulation 100 is available here.

1.  LSA-R.S. 22:1060.2.
2.  LSA-R.S. 22:1060.2; LAC 37:XIII.Chapter 141, §14109 A.
3.  LSA-R.S. 22:1060.3 A; LAC 37:XIII.Chapter 141, §14109 B.
4.  LSA-R.S. 22:1060.3 A.
5.  LAC 37:XIII.Chapter 141, §14109 C.
6.  LAC 37:XIII.Chapter 141, §14109 D; LSA-R.S. 22:1068 D; LSA-R.S. 22:1074 D.
7.  LAC 37:XIII.Chapter 141, §14111 A.
8.  LAC 37:XIII.Chapter 141, §14111 B.
9.  LAC 37:XIII.Chapter 141, §14115 A, §14117 A; LSA-R.S. 22:1068 D; LSA-R.S. 22:1074 D.

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