New York DFS Issues Final Reg Requiring Insurers to Include Formulary Exception

The New York Department of Financial Services (DFS) is taking new actions to address the opioid crisis in New York State.

DFS issued a final regulation requiring insurers to include a formulary exception process for detoxification or maintenance treatment medication for a substance use disorder. It also issued guidance to insurers regarding access to less addictive opioid and non-opioid pain medication.

The measures include a final DFS regulation that requires insurers to include in their policies a process for insureds and their designees or prescribers to request a review of a decision that a medication for detoxification or maintenance treatment of a substance use disorder drug is not covered by the policy.

DFS Superintendent Maria T. Vullo said in a DFS press release that DFS will monitor compliance with all substance abuse disorder treatment coverage requirements, including during market conduct exams, and take appropriate action against an issuer for any failure to adhere to all statutory and regulatory requirements.

Under the final regulation, every insurer that provides hospital, surgical or medical expense coverage and provides coverage for medication for the detoxification or maintenance treatment of a substance use disorder must include in the policy processes that allow an insured, the insured’s designee or the insured’s prescribing physician to request a formulary exception and gain access to clinically appropriate medication not otherwise covered by the policy.

Insurers must make determinations on standard exception requests and notify the insured, or the insured’s designee and the insured’s prescriber, no later than 72 hours after the request, according to the release.

Insurers must also have a process for expedited formulary exception requests based on exigent circumstances and make a determination and notification no later than 24 hours after the requests.

DFS has also issued guidance to inform insurers of their responsibilities surrounding the placement of opioid and non-opioid drugs prescribed for pain management in drug formulary tiers. This comes after DFS said it has received information that some insurers may be placing less-addictive types of opioids, such as buprenorphine, and non-opioid pain medications on their prescription drug formulary tiers based solely on the cost of the drug, reducing insureds’ access to these alternative pain medications.

Formularies – lists of covered prescription generic and brand name drugs – can have a single tier in which all drugs have the same cost to the insured or up to three tiers with varying costs.

With this in mind, DFS issued guidance notifying insurers that tier placement of prescription drugs on a prescription drug formulary that includes varying levels of copayments or coinsurance for which a consumer is responsible may not be based on cost alone. When reviewing the safety of either an opioid or non-opioid prescription drug used for pain management, the insurer should consider the addictive or non-addictive qualities of the prescription drug under review, DFS said in the release.

The DFS guidance also instructs insurers that if they require preauthorization for substance use disorder treatment – other than in-network OASAS certified facilities, for which no preauthorization is permitted – more frequently than the insurer does for medical and surgical benefits in the same benefit classification, then the insurer must be prepared to demonstrate to DFS how it is in compliance with the Federal Mental Health Parity and Addiction Equity Act.

DFS also reminded insurers that every policy or contract that provides medical, major medical or similar comprehensive-type coverage and provides coverage for prescription drugs for the treatment of a substance use disorder must include immediate access, without preauthorization, to a five-day emergency supply of prescribed medications otherwise covered under the policy or contract for the treatment of a substance use disorder where an emergency condition exists. This includes a prescribed drug or medication associated with the management of opioid withdrawal or stabilization, except where otherwise prohibited by law. Coverage of an emergency supply includes medication for opioid overdose reversal otherwise covered under the policy or contract when prescribed to an individual covered under the policy or contract.

DFS encouraged insurers to refrain from performing preauthorization review on outpatient substance use disorder treatment, including prescription drugs, so individuals have access to outpatient treatment that is vital to their recovery.