§ 20-841.05 — Prescription drug formulary; definitions

Arizona § 20-841.05

• Jurisdiction: Arizona
• Title 20: Arizona Revised Statutes
• Ch. 4: PARTICULAR TYPES OF INSURERS
• Art. 3: Hospital, Medical, Dental and Optometric Service Corporations

Text

A. A corporation with a prescription drug benefit that uses a drug formulary as a component of the subscription contract shall provide to its subscribers notice in the contract and any disclosure form regarding the applicable drug formulary. The corporation shall write the notice so that the language and format are easy to understand. The notice shall include an explanation of what a drug formulary is, how the corporation determines which prescription drugs are included or excluded and how often the corporation reviews the contents of the drug formulary.

B. A corporation described in subsection A of this section shall:

1. Develop and maintain a process by which health care professionals may request authorization for a medically necessary formulary or nonformulary prescription drug during nonbusiness hours. If the corporation does not maintain that process, the corporation shall reimburse a subscriber for the subscriber's out-of-pocket expense minus any deductible or copayment for a prescription drug that was purchased by the subscriber without preauthorization but that was later approved by the corporation.

2. Develop and maintain a process by which health care professionals may request authorization for medically necessary nonformulary prescription drugs. The corporation shall approve an alternative prescription drug when either of the following conditions is met:

(a) The equivalent prescription drug on the formulary has been ineffective in the treatment of the subscriber's disease or condition.

(b) The equivalent prescription drug on the formulary has caused an adverse or harmful reaction in the subscriber.

C. If the subscriber's pharmacy benefit plan does not require authorization, subsection B, paragraph 2 of this section does not apply.

D. If the subscriber's treating health care professional makes a determination that the subscriber meets any of the conditions described in subsection B of this section, any denial to cover the nonformulary prescription drug by the corporation shall be made in writing by a licensed pharmacist or medical director. The written denial shall contain an explanation of the denial, including the medical or pharmacological reasons why the authorization was denied, and the licensed pharmacist or medical director who made the denial shall sign it. The corporation shall send a copy of the written denial to the subscriber's treating health care professional who requested the authorization. The corporation shall maintain copies of all written denials and shall make the copies available to the department for inspection during regular business hours.

E. Any subscription contract that is issued, amended or renewed by a corporation and that includes prescription drug benefits shall not limit or exclude coverage for at least sixty days after the corporation's notice or the pharmacy's notice pursuant to subsection F of this section to the subscriber, whichever occurs first, for a prescription drug for a subscriber to refill a previously prescribed drug if the prescription drug was previously approved for coverage under the drug formulary or pharmacy benefit plan for the subscriber's medical condition and the health care professional continues to prescribe the prescription drug for the same medical condition. The limitation or exclusion prohibited by this subsection applies if the prescription drug is appropriately prescribed and is considered safe and effective for treating the subscriber's medical condition. This subsection does not prohibit the health care professional from prescribing another prescription drug that is covered by the drug formulary and that is medically appropriate for the subscriber, including generic drug substitutions.

F. A corporation shall provide written notice of the removal of any prescription drug from the corporation's drug formulary to each pharmacy vendor with which the corporation has a contract. On notice from the corporation, the contracted pharmacy vendor at the point of dispensing a prescription drug that has been removed from the drug formulary shall notify the subscriber by means of a verbal consultation or other direct communication with a subscriber that the subscriber may be required to consult with a health care professional to obtain a new prescription for a replacement drug after the sixty day period prescribed in subsection E of this section. The notice prescribed in this subsection is not required if the pharmacy vendor is a pharmacy that is owned by the corporation or a corporate affiliate of that corporation.

G. This section does not:

1. Prohibit a corporation from applying deductibles, coinsurance or other cost containment or quality assurance measures.

2. Apply to a corporation that provides a multitiered benefit plan that allows access to prescription drugs without authorization by the corporation.

3. Apply to any corporation that holds a certificate of authority to operate either as a dental service corporation or an optometric service corporation.

H. For the purposes of this section:

1. "Health care professional" means a person who has an active nonrestricted license pursuant to title 32 and is authorized to write drug prescriptions to treat medical conditions.

2. "Prescription drug" means any prescription medication as defined in section 32-1901 that is prescribed by a health care professional to a subscriber to treat the subscriber's condition.