With 2023 state legislative sessions underway, some early prevailing themes are emerging. Usually, these early themes can forecast issue areas where we will see the most wins in a legislative year. Such trends are typically good predictors, but they are not always accurate. In 2022, we expected a big year for copay accumulator legislation that did not materialize, although we did have some significant wins on that issue. Will 2023 be the year of mandatory white bagging bans or copay accumulator bans? Only time will tell, but here is a brief look at some of the early legislation and trends we are spotting in state houses across the U.S.
Utilization Management
An early trend in utilization management legislation is cleanup bills that adjust details in bills that have passed with less-than-ideal language, such as approval timelines that are longer than desired. For example, legislation introduced in Maryland (HB 305/SB 308) would change the approval timeline from business days to calendar days. Such changes may seem small, but they can make tremendous differences in wait times for patients and lead to more timely access to care.
Prior authorization gold card legislation, which establishes a continuous prior authorization exemption for physicians who earn a 90% approval rate on requests for a given service over a period of six months, continues to be discussed in various state capitols around the nation. Notably, Kentucky has reintroduced gold card legislation that it considered last year. We will continue to work with our partners at the Kentucky Medical Association and the Kentuckiana Rheumatology Alliance to support the legislation.
We expect similar legislation to be filed in other states, but momentum behind these efforts has stalled, in large part because of the complexity of the implementation process in Texas, which passed a gold card bill in 2021. Operational challenges have emerged during the regulatory process there, especially related to pharmaceuticals. The Texas bill was the first of its kind, and a smooth path to implementation rarely exists for novel policy innovations. The ACR remains committed to working with our partners to come up with solutions to the difficulties that arose in Texas and to work toward rolling out these policies across the nation.
Copay Accumulator Bans
Copay accumulator legislation will once again be a hot topic in 2023. At the end of 2022, the rheumatology community scored two big wins with the approval of copay accumulator bans in Delaware and New York. A total of 16 states and Puerto Rico have enacted accumulator bans. These bills, which prevent restrictions on the application of patient assistance funds toward patient cost-sharing requirements, are critical to patients’ ability to afford the medications they need.
At least six states are currently considering accumulator legislation this session, including Florida, Texas and Washington. At least two additional states are in the drafting process, and more accumulator bills will undoubtedly be added as the calendar moves forward. The ACR is actively supporting copay accumulator legislation across the country and is planning media campaigns in specific states to support bills that have yet to be introduced.
Mandatory White Bagging Bans
Mandatory white bagging continues to be an issue of growing concern, particularly for rheumatologists in private practice. These policies require physicians to acquire provider-administered drugs through a preferred specialty pharmacy designated by a payer or pharmacy benefit manager (PBM).
White bagging bills have been filed in several states. Most of these efforts are being led by state hospital associations. The ACR is working with our partners to ensure that private practice physicians are included in the language of the legislation. The nation’s first white bagging ban, in Louisiana, largely excluded private practice physicians. Despite the ban being celebrated in the rheumatology community, it actually had very little impact on those in private practice who are most vulnerable to mandatory white bagging. We hope to avoid the same outcome in future legislation.
Despite the early flurry of bills banning white bagging, it is difficult to predict the odds for success. There was a similar level of activity last session, but the year ended with no significant wins on the issue. Our primary focus this year will be continuing to work to ensure the language includes providers. This is particularly important for this issue because it will be much more difficult to go back and correct language in these bills than in some other legislation.
Pharmacy Benefit Manager Reform
A trend from previous years that is continuing so far in 2023 is PBM legislation. We are continuing to see states address PBMs on an issue-by-issue basis, rather than taking up larger PBM reform packages. One issue on which we have seen a flurry of early activity is rebate pass-through legislation.
Rebate pass-through legislation requires a certain percentage of rebates collected by PBMs to be passed back to the consumer or health plan. The current bills that we are tracking are consumer-focused and require the consumer’s cost-sharing to be reduced at the pharmacy counter. The current trend is for that reduction to be 80% of rebates that a PBM is expecting to receive. A few notable examples of early rebate pass-through legislation are HB 343 in Georgia and SB 1425 in Virginia.
One state poised to take up a larger PBM reform package is Florida. In 2022, Gov. Ron DeSantis issued an executive order regulating the actions of PBMs that do business with the state, and he has made PBM reform a legislative priority for 2023. His legislative proposal includes anti-steering provisions, bans on spread pricing and clawbacks, and other licensing regulations. It also includes reporting requirements for manufacturers to give advance notice of and justify annual price increases. This proposal also marks a shift in the drug pricing debate that we will have to monitor. PBMs have been a favorite punching bag for quite some time, but this could mark a pivot toward addressing other problematic areas of the supply chain.
Conclusion
2023 feels like an unusual year for state legislatures. With pandemic policies winding down and hyperpartisanship creeping deeper and deeper into state capitols, it seems like we are at a crossroads of sorts. Because of these dynamics, large health reforms could face more headwinds than usual. However, with the table being set for the next presidential campaign, states with governors seeking to launch presidential bids might be more motivated than others to push through policies that favor patients and providers.
I predict that 2023 is likely to be a year of many small wins. Although that may not be reassuring to hear, it is important to remember that change typically occurs incrementally. It may not be satisfying, but it is healthy and usually the result of something we don’t often hear about in politics these days: compromise.
Joseph Cantrell, JD, is the ACR director of state affairs and community relations.
