Senate Considers Legislation To Allow DMHC To Regulate HMO Prescription Drug Benefits

A bill (SB 842) introduced this week by Sen. Jackie Speier (D-Hillsborough) would allow the Department of Managed Health Care to regulate the treatments covered by HMOs that offer prescription drug benefits, the San Francisco Chronicle reports. The DMHC has lost two court decisions this year over the issue -- in June, a court ruled that Kaiser Permanente did not have to pay for the sexual dysfunction treatment Viagra, and in January, a court ruled that Blue Shield of California did not have to cover the obesity treatment Xenical. The health plans argued that they should not have to cover "lifestyle drugs" or treatments "used for cosmetic or recreational purposes," the Chronicle reports. The bill would clarify current law and would ensure that "there are not arbitrary, capricious decisions being made by the HMO to deny medically necessary pharmaceutical drugs to an enrollee," Speier said. However, Walter Zelman, president of the California Association of Health Plans, said, "It's very difficult to determine where lifestyle becomes medically necessary." Although the bill would not require HMOs to provide a prescription drug benefit, Zelman said that the legislation could increase HMO premiums as health plans move to offset the cost of coverage for additional treatments (Colliver, San Francisco Chronicle, 8/8).