New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 22 - HEALTH BENEFIT PLANS
Subchapter 5 - MINIMUM STANDARDS FOR HEALTH BENEFIT PLANS, PRESCRIPTION DRUG PLANS AND DENTAL PLANS
Section 11:22-5.9 - Prescription drug benefits

Universal Citation: NJ Admin Code 11:22-5.9

Current through Register Vol. 56, No. 24, December 18, 2024

(a) Health benefit plans and stand-alone prescription drug plans that provide benefits for prescription drugs listed on a formulary may provide higher benefits for formulary drugs than for nonformulary drugs, provided:

1. The benefit for all tiers of formulary and nonformulary drug coverage shall result in a cost to the covered person of no more than 50 percent of the plan's contracted cost of the drug, after application of any deductibles, for prescription drugs provided by network providers. For prescription drugs provided by out-of-network providers, coinsurance shall not exceed 50 percent.

2. If a health benefit plan has a separate deductible for prescription drugs, or a stand-alone prescription drug plan has a deductible, such deductible shall not exceed $ 250.00 per calendar year for all tiers of formulary drugs and $ 250.00 per year for all tiers of nonformulary drugs; and

3. If a health benefit plan or a stand-alone prescription drug plan has a benefit maximum for prescription drugs, the maximum shall be the same for formulary and nonformulary drugs.

(b) Health benefit plans and stand-alone prescription drug plans that provide prescription drug benefits through use of a formulary, shall meet the following criteria:

1. The formulary shall be developed by a pharmacy and therapeutics committee composed of health care professionals with recognized knowledge and expertise in clinically appropriate prescribing, dispensing and monitoring of outpatient drugs or drug use review, evaluation and intervention. The membership of the committee shall consist of at least two-thirds licensed and actively practicing physicians and pharmacists, and shall consist of at least one pharmacist. If the carrier contracts with a third party to develop the formulary, the carrier shall be responsible for guaranteeing that the third party complies with all requirements relating to formularies as set forth in this subsection.

2. All drugs in a formulary shall be approved under the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301 et seq.

3. The most preferred tier of a formulary, that is, the tier with the lowest cost sharing, shall include more than one drug used to treat each covered disease state where more than one drug is available.

4. A drug may be excluded from the most preferred tier of a formulary only if, based on the compendia listed in (c)6 below, it does not have a significant, clinically meaningful therapeutic advantage in terms of safety, effectiveness or clinical outcome of treatment for the specific condition for which the drug is intended over other drugs included in the formulary, and there is a written explanation of the basis for the exclusion that is available to providers and covered persons upon request.

5. Each health benefit plan utilizing selective contracting arrangements that provides benefits for formulary drugs shall also provide benefits for nonformulary drugs. There shall be no difference in benefit level between formulary and nonformulary drugs obtained from out-of-network providers.

6. The carrier shall establish an approval process to enable health care providers and covered persons to obtain coverage of nonformulary drugs at the same level as formulary drugs where the prescribing health care provider certifies the medical necessity of the drug.
i. A nonformulary drug shall be considered medically necessary if:
(1) It is approved under the Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301 et seq.; or its use is recognized as being medically appropriate for the specific treatment for which the drug has been prescribed in one of the following established reference compendia: The American Hospital Formulary Service Drug Information or the United States Pharmacopoeia - Drug Information, or it is recommended by a clinical study or review article in a major peer-reviewed professional journal; and

(2) The prescribing health care provider states that all formulary drugs used to treat each disease state have been ineffective in the treatment of the covered person's disease or condition, or all such drugs have caused or are reasonably expected to cause adverse or harmful reactions in the covered person.

ii. The approval process for nonformulary drugs shall provide that the carrier respond to the prescribing health care provider by telephone or other telecommunication device within one business day of a request for prior authorization. Failure to respond within one business day shall be deemed an approval of the request. Initial denials shall also be provided to the prescribing health care provider and covered person in writing within five business days of receipt of the request for approval of a nonformulary drug, and shall include the clinical reason for the denial. Such denials are appealable to the Independent Health Care Appeals Program in the Department of Health and Senior Services pursuant to P.L. 1997, c. 192, §11.

7. The carrier shall publish and distribute, at least quarterly, either its current formulary or a list of nonformularies to network providers. Such list shall clearly indicate whether the drugs included are formulary or nonformulary. Alternatively, the carrier may annually distribute new formularies or a list of nonformularies, and quarterly updates, to network providers. The current formulary or list of nonformulary drugs shall be provided by the carrier to covered persons upon request.

8. The contract and evidence of coverage form shall disclose the existence of the drug formulary, describe the approval process to obtain coverage of nonformulary drugs as formulary drugs and describe the process to appeal a denial of a request for approval of a nonformulary drug, including the right to appeal to the Independent Health Care Appeals Program in the Department of Health and Senior Services pursuant to P.L. 1997, c. 192, §11. The contract and evidence of coverage form shall state that a copy of the formulary will be provided by the carrier to a covered person upon request.

(c) Health benefit plans and stand-alone prescription drug plans may provide higher benefits for generic drugs than for brand name drugs provided:

1. The benefit for both generic and brand name drugs must result in a cost to the covered person of no more than 50 percent of the plan's contracted cost of the medication for prescription drugs obtained from network providers. A deductible, as described in 2. below, does not need to be considered in calculating the covered person's cost. For prescription drugs provided by out-of-network providers, coinsurance shall not exceed 50 percent.

2. If a health benefit plan has a separate deductible for prescription drugs or a stand-alone prescription drug plan has a deductible, such deductible shall not exceed $ 250.00 per calendar year for generic drugs and $ 250.00 per calendar year for non-generic drugs.

3. If a health benefit plan or a stand-alone prescription drug plan has a benefit maximum for prescription drugs, the maximum shall be the same for generic and brand name drugs.

Disclaimer: These regulations may not be the most recent version. New Jersey may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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