2023 California Code › Health and Safety Code - HSC › DIVISION 2 - LICENSING PROVISIONS › CHAPTER 2.2 - Health Care Service Plans › ARTICLE 5 - Standards › Section 1367.241.

1367.241. (a) Notwithstanding any other law, on and after January 1, 2013, a health care service plan that provides coverage for prescription drugs shall accept only the prior authorization form developed pursuant to subdivision (c), or an electronic prior authorization process described in subdivision (e), when requiring prior authorization for prescription drugs. This section does not apply in the event that a physician or physician group has been delegated the financial risk for prescription drugs by a health care service plan and does not use a prior authorization process. This section does not apply to a health care service plan, or to its affiliated providers, if the health care service plan owns and operates its pharmacies and does not use a prior authorization process for prescription drugs.
(b) (1) (A) If a health care service plan, contracted physician group, or utilization review organization fails to notify a prescribing provider of its coverage determination within 72 hours for nonurgent requests, or within 24 hours if exigent circumstances exist, upon receipt of a completed prior authorization or step therapy exception request, the prior authorization or step therapy exception request shall be deemed approved for the duration of the prescription, including refills. The requirements of this subdivision shall not apply to contracts entered into pursuant to Chapter 7 (commencing with Section 14000), Chapter 8 (commencing with Section 14200), or Chapter 8.75 (commencing with Section 14591) of Part 3 of Division 9 of the Welfare and Institutions Code. Medi-Cal managed care health care service plans that contract under those chapters shall not be required to maintain an external exception request review as provided in Section 156.122 of Title 45 of the Code of Federal Regulations.
(B)  The external exception request review process shall apply to a denial of a prior authorization or step therapy exception request. An independent review organization’s reversal of a health care service plan’s denial of a request for an exception, prior authorization, or a step therapy exception shall be binding on the health care service plan and shall apply for the duration of the prescription, including refills. A health care service plan shall notify the enrollee and prescribing provider of the independent review organization’s coverage determination, or request for additional or clinically relevant material information necessary to make a coverage determination, within the time limits required by paragraph (2). This subparagraph shall not affect or limit an enrollee’s eligibility for independent medical review under Section 1374.30 or to file an internal appeal with the health care service plan.
(2) If a request for prior authorization or a step therapy exception is incomplete or clinically relevant material information necessary to make a coverage determination is not included, the health care service plan, contracted physician group, or utilization review organization shall notify the prescribing provider within 72 hours of receipt, or within 24 hours of receipt if exigent circumstances exist, what additional or clinically relevant material information is needed to approve or deny the prior authorization or step therapy exception request, or to appeal the denial thereof. Once the requested information is received, the applicable time period to approve or deny a prior authorization or step therapy exception request, or to appeal, shall begin to elapse. If a coverage determination or request for additional or clinically relevant material information by a health care service plan, contracted physician group, or utilization review organization is not received by the prescribing provider within the time allotted, the prior authorization or step therapy exception request, or appeal of a denial thereof, shall be deemed approved for the duration of the prescription, including refills. In the event of a denial, the health care service plan, contracted physician group, or utilization review organization shall inform the prescribing provider and enrollee of the external appeal process under subparagraph (B) of paragraph (1), which shall also apply to a denial of a prior authorization or step therapy exception request.
(3) A health care service plan, contracted physician group, utilization review organization, or external independent review organization shall approve a step therapy exception request, or internal or external appeal of a denial thereof, if any of the criteria in subdivision (b) of Section 1367.206 are satisfied.
(c)  On or before January 1, 2017, the department and the Department of Insurance shall jointly develop a uniform prior authorization form. Notwithstanding any other law, on and after July 1, 2017, or six months after the form is completed pursuant to this section, whichever is later, every prescribing provider shall use that uniform prior authorization form, or an electronic prior authorization process described in subdivision (e), to request prior authorization for coverage of prescription drugs and every health care service plan shall accept that form or electronic process as sufficient to request prior authorization for prescription drugs.
(d)  The prior authorization form developed pursuant to subdivision (c) shall meet the following criteria:
(1) The form shall not exceed two pages.
(2) The form shall be made electronically available by the department and the health care service plan.
(3) The completed form may also be electronically submitted from the prescribing provider to the health care service plan.
(4) The department and the Department of Insurance shall develop the form with input from interested parties from at least one public meeting.
(5) The department and the Department of Insurance, in development of the standardized form, shall take into consideration the following:
(A) Existing prior authorization forms established by the federal Centers for Medicare and Medicaid Services and the State Department of Health Care Services.
(B) National standards pertaining to electronic prior authorization.
(e) A prescribing provider may use an electronic prior authorization system utilizing the standardized form described in subdivision (c) or an electronic process developed specifically for transmitting prior authorization information that meets the National Council for Prescription Drug Programs’ SCRIPT standard for electronic prior authorization transactions.
(f)  Subdivision (a) does not apply if any of the following occurs:
(1) A contracted physician group is delegated the financial risk for prescription drugs by a health care service plan.
(2) A contracted physician group uses its own internal prior authorization process rather than the health care service plan’s prior authorization process for plan enrollees.
(3) A contracted physician group is delegated a utilization management function by the health care service plan concerning any prescription drug, regardless of the delegation of financial risk.
(g)  For prescription drugs, prior authorization requirements described in subdivisions (c) and (e) apply regardless of how that benefit is classified under the terms of the health plan’s group or individual contract.
(h) For purposes of this section:
(1) “Prescribing provider” shall include a provider authorized to write a prescription, pursuant to subdivision (a) of Section 4040 of the Business and Professions Code, to treat a medical condition of an enrollee.
(2) “Exigent circumstances” exist when an enrollee is suffering from a health condition that may seriously jeopardize the enrollee’s life, health, or ability to regain maximum function or when an enrollee is undergoing a current course of treatment using a nonformulary drug.
(3) “Completed prior authorization request” means a completed uniform prior authorization form developed pursuant to subdivision (c), or a completed request submitted using an electronic prior authorization system described in subdivision (e), or, for contracted physician groups described in subdivision (f), the process used by the contracted physician group.
(4) “Step therapy exception” means a decision to override a generally applicable step therapy protocol in favor of coverage of the prescription drug prescribed by a health care provider for an individual enrollee.
(Amended by Stats. 2021, Ch. 742, Sec. 2. (AB 347) Effective January 1, 2022.)