California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 2 - Policy Forms and Other Documents
Article 1.4 - Standard Prescription Drug Formulary Template
Section 2218.82 - Standard Prescription Drug Formulary Template
Universal Citation: 10 CA Code of Regs 2218.82
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Structure and content. A formulary shall be maintained in a format that is text searchable and shall include all of the following sections in the order listed:
(1) Title
page.
(2) Table of contents.
(3) Informational section.
(4) Categorical list of prescription
drugs.
(5) Alphabetical index of
prescription drugs.
(b) Title page. The title page of a formulary shall include all of the following contents:
(1) A title.
(2) The name of the health insurer that maintains
the formulary.
(3) The name of each
health insurance product to which the formulary applies. Product names listed on a
formulary shall correspond to product names used on corresponding coverage
documents, summary of benefits and coverage documents (SBCs), network provider
directories, and other communications with insureds including identification cards
as required under the Uniform Provider Directory Standards developed by the
commissioner pursuant to subdivision (k) of section
10133.15 of the
Insurance Code.
(4) The date the
formulary was last updated.
(5) Notice
that the formulary is subject to change and all previous versions of the formulary
are no longer in effect.
(6) A direct
website link (URL) for the location of the electronic version of the formulary
posted on the health insurer's public website. The formulary shall be accessible to
potential insureds, insureds, providers, and the general public. The formulary is
accessible if it can be viewed on an insurer's website through a clearly
identifiable link or tab without requiring an individual to create or access an
account or enter a policy number, and if the health insurer offers more than one
plan, when an individual can easily discern which formulary applies to which
plan.
(7) Instructions for contacting
the health insurer's customer service department. A health insurer shall have
customer service representatives on staff during normal business hours who are
prepared to provide specific information concerning prescription drug benefits,
including, but not limited to: information concerning drugs covered under the
medical benefit of an insured's plan; the processes for submitting an exception
request and requesting prior authorization and step therapy exceptions; and actual
dollar amounts of cost sharing for drugs under an insured's plan, including drugs
subject to coinsurance.
(8) A direct
website link (URL) for the location of, or specific instructions for locating,
plan-specific coverage documents that include cost sharing applicable to
prescription drugs for each plan to which the formulary applies, and that are posted
on a health insurer's public website.
(c) Informational section. The informational section of a formulary shall include all of the following contents:
(1) Definitions for terms. The following terms are
intended solely for informing consumers and shall be defined in a formulary as set
forth below.
A health insurer shall submit proposed omissions of terms, deviations from the required definitions, and substitution of alternative terms to the commissioner for review prior to implementation.
(A) "Brand name drug" means a drug that is
marketed under a proprietary, trademark-protected name. A brand name drug is listed
in this formulary in all CAPITAL letters.
(B) "Coinsurance" means a percentage of the cost
of a covered health care benefit that you pay after you have paid the deductible, if
a deductible applies to the health care benefit.
(C) "Copayment" means a fixed dollar amount that
you pay for a covered health care benefit after you have paid the deductible, if a
deductible applies to the health care benefit.
(D) "Deductible" means the amount you pay for
covered health care benefits that are subject to the deductible before your health
insurer begins to pay. If your health insurance policy has a deductible, it may have
either one deductible or separate deductibles for medical benefits and prescription
drug benefits. After you pay your deductible, you usually pay only a copayment or
coinsurance for covered health care benefits. Your insurance company pays the
rest.
(E) "Drug Tier" means a group of
prescription drugs that correspond to a specified cost sharing tier in your health
insurance policy. The drug tier in which a prescription drug is placed determines
your portion of the cost for the drug.
(F) "Exception request" means a request for
coverage of a non-formulary drug. If you, your designee, or your prescribing health
care provider submits a request for coverage of a non-formulary drug, your insurer
must cover the non-formulary drug when it is medically necessary for you to take the
drug.
(G) "Exigent circumstances" means
when you are suffering from a medical condition that may seriously jeopardize your
life, health, or ability to regain maximum function, or when you are undergoing a
current course of treatment using a non-formulary drug.
(H) "Formulary" or "prescription drug list" means
the list of drugs that is covered by your health insurance policy under the
prescription drug benefit of the policy.
(I) "Generic drug" means a drug that is the same
as its brand name drug equivalent in dosage, strength, effect, how it is taken,
quality, safety, and intended use. A generic drug is listed in this formulary in
italicized lowercase letters.
(J) "Medically Necessary" means health care
benefits needed to diagnose, treat, or prevent a medical condition or its symptoms
and that meet accepted standards of medicine. Health insurance usually does not
cover health care benefits that are not medically necessary.
(K) "Non-formulary drug" means a prescription drug
that is not listed on this formulary.
(L) "Out-of-pocket costs" means your expenses for
health care benefits that aren't reimbursed by your health insurance. Out-of-pocket
costs include deductibles, copayments, and coinsurance for covered health care
benefits, plus all costs for health care benefits that are not covered.
(M) "Prescribing provider" means a health care
provider who can write a prescription for a drug to diagnose, treat, or prevent a
medical condition.
(N) "Prescription"
means an oral, written, or electronic order from a prescribing provider authorizing
a prescription drug to be provided to a specific individual.
(O) "Prescription drug" means a drug that by law
requires a prescription.
(P) "Prior
Authorization" means a decision by your health insurer that a health care benefit is
medically necessary for you. If a prescription drug is subject to prior
authorization in this formulary, your prescribing provider must request approval
from your health insurer to cover the drug before you fill your prescription. Your
health insurer must grant a prior authorization request when it is medically
necessary for you to take the drug.
(Q)
"Step therapy" means a specific sequence in which prescription drugs for a
particular medical condition must be tried. If a drug is subject to step therapy in
this formulary, you may have to try one or more other drugs before your health
insurance policy will cover that drug for your medical condition. If your
prescribing provider submits a request for an exception to the step therapy
requirement, your health insurer must grant the request when it is medically
necessary for you to take the drug.
(2) Definitions for any additional or different
terms used in the formulary that are necessary for comprehending the
formulary.
(3) Instructions on how to
locate a prescription drug in the categorical list of prescription drugs. The
instructions shall explain that:
(A) A
prescription drug may be located by looking up the therapeutic category and class to
which the drug belongs or the brand or generic name of the drug in the alphabetical
index; and
(B) If a generic equivalent
for a brand name drug is not available on the market or is not covered, the drug
will not be separately listed by its generic name.
(4) A description of the manner in which drugs are
listed in the categorical list of prescription drugs.
(A) At a minimum, the description shall explain
that:
1. A drug is listed alphabetically by its
brand and generic names in the therapeutic category and class to which it
belongs;
2. The generic name for a brand
name drug is included after the brand name in parentheses and all lowercase
italicized letters;
3. If a
generic equivalent for a brand name drug is both available and covered, the generic
drug will be listed separately from the brand name drug in all lowercase
italicized letters; and
4. If a
generic drug is marketed under a proprietary, trademark-protected brand name, the
brand name will be listed after the generic name in parentheses and regular typeface
with the first letter of each word capitalized.
(B) The description shall include an example of a
drug that is available both as a brand name drug and a generic equivalent to
illustrate how such a drug is listed.
(5) A description of the drug tiers in the
formulary, if drugs are grouped into tiers. The description shall include tier
numbers designating the tiers and a plain language definition for each tier that
accurately describes the types of prescription drugs that are placed in each tier
and that are used in the corresponding coverage documents. If the formulary is
subject to subdivision (b) of section
10123.1932 of
the Insurance Code, drugs shall be placed in tiers consistent with the drug tier
definitions in that subdivision. The description shall explain how to determine the
following:
(A) Which prescription drugs on the
formulary are preferred drugs; and
(B)
The cost sharing for each drug tier, including, for products subject to subdivision
(a) of section
10123.1932 of
the Insurance Code, the maximum dollar amount of cost sharing that may apply to a
drug.
(6) A description of all
utilization management procedures that the health insurance product imposes on
prescription drug coverage, including, but not limited to, prior authorization, step
therapy, quantity limits, and network limitations on access including specialty
pharmacy restrictions.
(7) Information
about the differences between drugs covered under the medical benefit of the product
and drugs covered under the outpatient prescription drug benefit of the product, and
instructions on how to obtain coverage information for drugs covered under the
medical benefit.
(8) Notice that the
health insurer must update the formulary with changes on a monthly basis. The notice
shall include a description of the types of changes a health insurer may make to the
formulary during the plan or policy year, and the dates on which such changes are
effective. The notice may also include a description of any prior notification a
health insurer will provide an affected insured of a formulary change. At a minimum,
the types of changes described in the notice shall include the following:
(A) Removal of a drug or dosage form of a drug
from the formulary;
(B) Any change in
tier placement of a drug that results in an increase in cost sharing; and
(C) Adding or changing utilization management
procedures applicable to a drug.
(9) An explanation that the presence of a
prescription drug on the formulary does not guarantee that an insured will be
prescribed that prescription drug by the insured's prescribing provider for a
particular medical condition.
(10)
Notice that the health insurer must cover a non-formulary drug when medically
necessary and a detailed description of the process for submitting an exception
request. The description shall state that:
(A) A
health insurer must notify the insured or the insured's designee and the insured's
prescribing provider of its coverage determination no later than 72 hours following
receipt of a non-urgent request and 24 hours following receipt of a request based on
exigent circumstances;
(B) A health
insurer must provide coverage pursuant to a non-urgent request for the duration of
the prescription, including refills;
(C)
A health insurer must provide coverage pursuant to a request based on exigent
circumstances for the duration of the exigency; and
(D) An insured may appeal the denial of an
exception request and that the coverage documents provide more information on appeal
rights and procedures.
(11)
Instructions on how to locate and fill a prescription through a network retail
pharmacy, mail order pharmacy, and specialty pharmacy, as applicable.
(12) A detailed description of the process for
requesting prior authorization or a step therapy exception. The description shall
state that if a health insurer fails to respond to a completed prior authorization
or step therapy exception request within 72 hours of receiving a non-urgent request
and 24 hours of receiving a request based on exigent circumstances, the request is
deemed approved and the health insurer may not deny the request
thereafter.
(13) Notice of an insured's
rights concerning step therapy as provided in subdivision (c) of section
10123.201 of the
Insurance Code.
(14) In a formulary
applicable to a health insurance product to which section
10112.27 of the
Insurance Code applies, notice that, pursuant to section
1367.22
of the Health and Safety Code, a health insurer may not limit or exclude coverage
for a drug if the health insurer previously approved coverage of the drug for an
insured's medical condition and the prescribing provider continues to prescribe the
drug for the medical condition, provided that the drug is appropriately prescribed
and safe and effective for treating the insured's medical condition.
(15) A description of the coverage provided under
the outpatient prescription drug benefit for drugs, devices, and FDA-approved
products pursuant to sections
10112.2,
10123.196, and
10176.61 of the
Insurance Code, including any over-the-counter drugs, devices, and FDA-approved
products that must be covered pursuant to those sections. The description shall
include a detailed description of the process required to acquire those drugs,
devices, and FDA-approved products through the outpatient prescription drug
benefit.
(16) A description of the limit
on cost sharing for orally administered anti-cancer drugs required by section
10123.206 of the
Insurance Code.
(17) If applicable to
any drugs listed on the formulary, a detailed description of the process for
requesting coverage and obtaining drugs that are subject to specialty pharmacy
restrictions or other network limitations on coverage.
(18) An annotated legend or key to all tier
numbers, abbreviations, and designations used in the formulary.
(d) Categorical list of prescription drugs.
(1) Organization of categorical list.
(A) The categorical list of prescription drugs
shall be organized by drug category and class based on a current, commonly used, and
widely accepted drug classification system such as the U.S. Pharmacopeial Convention
(USP) Medicare Model Guidelines or the American Hospital Formulary Service (AHFS)
Pharmacologic-Therapeutic Classification. A formulary shall identify the drug
classification system that is used.
(B)
Category names shall appear alphabetically, and class names shall appear
alphabetically within a category.
(C)
Prescription drugs shall be listed in drug classes consistent with the drug
classification system. A prescription drug that belongs to multiple drug classes
shall be listed in each applicable class.
(D) Brand name and generic prescription drugs
shall be alphabetically listed by respective brand or established name within a
class. In addition to a category and class name provided by the drug classification
system, the categorical list shall include, where possible, a plain language
description of the category and class.
(2) The categorical list shall include a complete
list of all prescription drugs covered under the outpatient prescription drug
benefit of the product, including both generic and brand name drugs. A formulary may
include prescription drugs that are covered only under the medical benefit of the
product, provided that each of those drugs is clearly identified as a drug that is
covered only under the medical benefit. A formulary may include non-formulary
prescription drugs, provided that each of those drugs is clearly identified as a
non-formulary drug.
(3) Columns in
categorical list.
(A) The categorical list shall
include the following columns in the order listed from left to right:
1. "Prescription Drug Name";
2. "Drug Tier" (except that if drugs are not
grouped into tiers, this column may be omitted); and
3. "Coverage Requirements and
Limits".
(B) The column
headings shall appear on the top of each page of the categorical
list.
(4) In the "Prescription
Drug Name" column, the proprietary name for a brand name drug shall appear in all
CAPITAL letters. The established name for the brand name drug shall be placed in
parentheses after the brand name in all lowercase italicized
letters. The established name for a generic drug shall appear in all
lowercase italicized letters. If a generic drug is sold under a
brand name, the brand name shall be placed in parentheses after the established name
in regular typeface with the first letter of each word capitalized.
(5) The "Prescription Drug Name" column shall
include all covered dosage forms and strengths for each prescription drug. If there
are differences in tier placement, quantity limit, prior authorization, step
therapy, or other utilization management procedures or benefit offerings for a
prescription drug based on its differing dosage forms or strengths, the categorical
list shall include separate rows for the dosage forms and/or strengths of the
prescription drug to clearly identify the differences.
(6) "Drug Tier" column.
(A) The "Drug Tier" column shall identify the cost
sharing tier in which a prescription drug is placed.
(B) A health insurer shall assign a unique tier
number, abbreviation, or designation, as appropriate, to the following:
1. Prescription drugs, devices, and FDA-approved
products covered under the outpatient prescription drug benefit of the product
pursuant to sections
10112.2 and
10123.196 of the
Insurance Code;
2. Orally administered
anti-cancer drugs that are subject to the cost sharing limit in section
10123.206 of the
Insurance Code;
3. Non-formulary drugs,
if included in the formulary; and
4.
Drugs covered only under the medical benefit of the product, if included in the
formulary.
(C) The tier
numbers, abbreviations, and designations shall be explained in the annotated legend
or key.
(7) The "Coverage
Requirements and Limits" column shall include abbreviations or designations for all
utilization management procedures that the health insurer imposes on prescription
drug coverage, including, but not limited to, prior authorization, step therapy,
quantity limits, and network limitations on access including specialty pharmacy
restrictions, in addition to any other relevant information applicable to the
coverage provided for a prescription drug. For each prescription drug that is
subject to one or more quantity limits, the applicable quantity limits shall be
described with specificity. Each abbreviation and designation used in the "Coverage
Requirements and Limits" column shall be explained in the annotated legend or
key.
(8) The annotated legend or key to
all tier numbers, abbreviations, and designations used in the formulary shall appear
on each page of the categorical list.
(e) Example categorical list based on United States Pharmacopeial Convention (USP) Medicare Model Guidelines Version 6.0, for illustration purposes only. Drug names are not depicted as required by subdivision (d) of this section.
|
Prescription Drug Name |
Drug Tier |
Coverage Requirements and Limits |
||
|
Analgesics - Drugs for Relief of Pain |
||||
|
Nonsteroidal Anti-inflammatory Drugs - [<Plain Language Description>] |
||||
|
<Drug Name 1> |
<Tier 1> |
<Util. Mgmt.> |
||
|
<Drug Name 2, Dosage Form A, Strength A> |
<Tier 1> |
<Util. Mgmt.> |
||
|
<Drug Name 2, Dosage Form B, Strength A> |
<Tier 2> |
<Util. Mgmt.> |
||
|
<Drug Name 2, Dosage Form B, Strength B> |
<Tier 3> |
<Util. Mgmt.> |
||
|
Opioid Analgesics, Long-acting - [<Plain Language Description>] |
||||
|
<Drug Name 3> |
<Tier 2> |
<Util. Mgmt.> |
||
|
<Drug Name 4, Dosage Form A, Strength A> |
<Tier 1> |
<Util. Mgmt.> |
||
|
<Drug Name 4, Dosage Form A, Strength B> |
<Tier 2> |
<Util. Mgmt.> |
||
|
Opioid Analgesics, Short-acting - [<Plain Language Description>] |
||||
|
<Drug Name 4, Dosage Form B> |
<Tier 3> |
<Util. Mgmt.> |
||
|
<Drug Name 5> |
<Tier 1> |
<Util. Mgmt.> |
||
|
Anesthetics - Drugs for Blocking Pain |
||||
|
Local Anesthetics - [<Plain Language Description>] |
||||
|
<Drug Name 6> |
<Tier 1> |
<Util. Mgmt.> |
||
|
<Drug Name 7> |
<Tier 2> |
<Util. Mgmt.> |
||
(f) Alphabetical index of prescription drugs. The index shall list each covered brand name and generic drug by respective brand name or established name in alphabetical order and include the page number for the location of the drug in the categorical list of prescription drugs.
1. New section
filed 8-31-2018; operative 10-1-2018 (Register 2018, No. 35).
2. Change
without regulatory effect amending subsections (c)(9) and (c)(10)(A) filed 7-14-2021
pursuant to section
100, title 1, California Code of
Regulations (Register 2021, No. 29). Filing deadline specified in Government Code
section
11349.3(a)
extended 60 calendar days pursuant to Executive Order N-40-20.
3. Change
without regulatory effect amending subsections (c)(5) and (c)(5)(B) and amending
NOTE filed 8-18-2023 pursuant to section
100, title 1, California Code of
Regulations (Register 2023, No. 33).
Note: Authority cited: Section 10123.192, Insurance Code. Reference: Sections 10112.2, 10112.27, 10123.191, 10123.192, 10123.193, 10123.1932, 10123.196, 10123.197, 10123.201, 10123.206, 10133.15 and 10176.61, Insurance Code; and Section 1367.22, Health and Safety Code.
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