California HMOs required to cover all 'medically necessary' drugs

New regulations proposed by the California state Department of Managed Health Care (DMHC) that are expected to be implemented by the end of this year would require HMOs in California to cover all medically necessary prescription drugs, even if they are excluded from a plan's formulary.

Under the proposed regulations, HMOs would not be required to pay for prescriptions if comparable OTC drugs could be purchased, but HMOs would be required to reimburse patients if the OTC drugs are ineffective.

Percentage copayments would be capped at 50% of the drug cost. Drugs that would not be covered include those used for cosmetic purposes, sexual performance, and weight loss.

DMHC's regulations, which were provided for public comment in January and are scheduled to undergo a second public comment period, were mandated by legislation passed in 2002.

According to Cindy Ehnes, director, DMHC: "California is now the only state in the nation to have clear, comprehensive standards for consumers to have access to medically necessary prescription drugs. There will be no doubt in a patient's mind as to which drugs are covered."

SOURCES California Department of Managed Healthcare website. Department of Managed Care announces new prescription drug protections for HMO consumers [press release]. Available at: http://www.hmohelp.ca.gov/. Accessed April 25, 2005.

American Medical Association website. California HMOs facing drug access rule [press release]. Available at: http://www.ama-assn.org/amednews/2005/01/24/bisb0124.htm . Accessed April 25, 2005.