SENATE JUDICIARY COMMITTEE SUBSTITUTE FOR

SENATE BILL 536

50th legislature - STATE OF NEW MEXICO - first session, 2011

AN ACT

RELATING TO HEALTH INSURANCE; AMENDING SECTIONS OF THE NEW MEXICO INSURANCE CODE, THE HEALTH MAINTENANCE ORGANIZATION LAW AND THE NONPROFIT HEALTH CARE PLAN LAW TO PROVIDE NOTICE TO ENROLLEES BEFORE IMPOSING COST-SHARING OBLIGATIONS APPLICABLE TO A NEW FORMULARY CLASSIFICATION FOR PRESCRIPTION DRUGS; PROVIDING FOR CONTINGENT APPLICABILITY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of Chapter 59A, Article 22 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] PRESCRIPTION DRUG PRICE CONTROLS.--            A. An individual or group health insurance policy, health care plan or certificate of health insurance that is delivered, issued for delivery or renewed in this state that provides coverage for prescription drugs and for which cost-sharing, deductibles or co-insurance obligations are determined by the category or "tier" of the prescription drug shall not reclassify drugs that are on a tier 4 or 5 to a higher tier of the formulary during the term of the evidence of coverage. When a drug is reclassified to a higher category or tier, the administrator for the plan shall give the enrollee sixty days' advance notice of the impending change.

          B. The provisions of this section shall not apply in the event that federal law requires the state to make payments on behalf of enrollees to cover the costs of implementing this section."

     SECTION 2. A new section of Chapter 59A, Article 23 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] PRESCRIPTION DRUG PRICE CONTROLS.--

          A. A blanket or group health insurance policy or contract that is delivered, issued for delivery or renewed in this state that provides coverage for prescription drugs and for which cost-sharing, deductibles or co-insurance obligations are determined by the category or "tier" of the prescription drug shall not reclassify drugs that are on a tier 4 or 5 to a higher tier of the formulary during the term of the evidence of coverage. When a drug is reclassified to a higher category or tier, the administrator for the plan shall give the enrollee sixty days' advance notice of the impending change.

          B. The provisions of this section shall not apply in the event that federal law requires the state to make payments on behalf of enrollees to cover the costs of implementing this section."

     SECTION 3. A new section of the Health Maintenance Organization Law is enacted to read:

     "[NEW MATERIAL] PRESCRIPTION DRUG COST CONTROLS.--

          A. An individual or group health maintenance organization contract that is delivered, issued for delivery or renewed in this state that provides coverage for prescription drugs and for which cost-sharing, deductibles or co-insurance obligations are determined by the category or "tier" of the prescription drug shall not reclassify drugs that are on a tier 4 or 5 to a higher tier of the formulary during the term of the evidence of coverage. When a drug is reclassified to a higher category or tier, the administrator for the plan shall give the enrollee sixty days' advance notice of the impending change.

          B. The provisions of this section shall not apply in the event that federal law requires the state to make payments on behalf of enrollees to cover the costs of implementing this section."

     SECTION 4. A new section of the Nonprofit Health Care Plan Law is enacted to read:

     "[NEW MATERIAL] PRESCRIPTION DRUG PRICE CONTROLS.--

          A. An individual or group health insurance policy, health care plan or certificate of health insurance that is delivered, issued for delivery or renewed in this state that provides coverage for prescription drugs and for which cost-sharing, deductibles or co-insurance obligations are determined by the category or "tier" of the prescription drug shall not reclassify drugs that are on a tier 4 or 5 to a higher tier of the formulary during the term of the evidence of coverage. When a drug is reclassified to a higher category or tier, the administrator for the plan shall give the enrollee sixty days' advance notice of the impending change.

          B. The provisions of this section shall not apply in the event that federal law requires the state to make payments on behalf of enrollees to cover the costs of implementing this section."

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