Sacramento Superior Court Upholds State’s Authority To Regulate Prescription Drug Coverage as of January 2003
A Sacramento Superior Court on Friday ruled that the Department of Managed Health Care "overstepped its authority" when it ordered Blue Shield of California to purchase the weight-loss drug Xenical for a patient whose insurance policy excluded such drugs, the Sacramento Bee reports (Rapaport, Sacramento Bee, 2/9). In May 2003, Sacramento Superior Court Judge Emily Vasquez upheld a state law that allows regulators to tell health plans which drugs they must cover. Blue Shield initially brought the legal challenge after state regulators said it should pay for a plan member's use of the weight-loss drug Xenical. Vasquez in 2002 issued an injunction barring the state from reviewing denials of care resulting from coverage exclusions, but after the ruling the state enacted a law requiring HMOs to have state permission to exclude drugs or medical treatments from coverage, which led Vasquez to change her mind. However, in a separate ruling, Vasquez said that because Blue Shield brought the case before Jan. 2, 2003 -- the date the law went into effect -- the state could not mandate coverage for Xenical in that particular case (California Healthline, 5/28/03). In last week's decision, county Superior Court Judge Shelleyanne Chang issued a tentative order that said DMHC does not have the authority to force a health plan to pay for an excluded drug prior to Jan. 2, 2003. Lewis Chartrand, DMHC's general counsel, said the ruling indicated that the department can require HMOs to provide coverage for some prescription drugs after Jan. 2, 2003. Chartrand said the judge's ruling represented the "end of the line" for the lawsuit (Colliver, San Francisco Chronicle, 2/7). Jamie Court, executive director of the Foundation for Consumer and Taxpayer Rights, said that "without enforcement of new HMO regulations [from the administration of Gov. Arnold Schwarzenegger (R)], patients are essentially in the same place they were before this case went to court. They are basically without clear protection when HMOs decide to sell insurance that doesn't cover medically necessary benefits" (Sacramento Bee, 2/9).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.