DRUG FORMULARIES: CAHP Challenges DOC Over Reinstatement
The California Association of Health Plans has challenged the authority of the state Department of Corporations to regulate HMOs' drug formularies. CAHP CEO Walter Zelman penned a strongly-worded letter to Maria Contreras-Sweet, head of the Business, Transportation and Housing Agency, which oversees the DOC, saying, "We are deeply troubled by the precedent that this action has set and the way that this investigation has been handled. ... [Insurers] were subjected to highly premature charges of wrongdoing when it continued to appear that no health plan has committed a violation." The Sacramento Bee reports that Zelman charged that "nowhere in the Knox Keene Act, the law the DOC uses to regulate HMOs, does it give the state final say on which drugs shall be included on a drug formulary."
Responding to the letter, Contreras-Sweet invited HMO executives to meet, but agency personnel declined all comment until after the groups had discussed the issue. Behind the negotiations is the looming July 1 start date for a state law that requires HMOs to cover any drug a doctor deems medically necessary. Zelman said the DOC's recent action requiring the reinstatement of certain drugs puts that law into effect before its time (Griffith, 5/8).