BILL NUMBER: S5314
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the insurance law and the public health law, in relation
to establishing patient safety and quality assurance measures regarding
the distribution of patient-specific medication from an insurer-desig-
nated pharmacy
 
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this legislation is to improve patient safety and quality
assurance associated with health plan policies requiring the use of a
designated pharmacy to dispense a specialty drug intended for adminis-
tration by a clinician. These policies are commonly referred to as
"white bagging" and "brown bagging."
 
SUMMARY OF SPECIFIC PROVISIONS:
This bill would amend §§ 3217-b and 4325 of the insurance law and 4406-c
of the public health law to ensure quality assurance and patient safety
regarding policies known as white and brown bagging of specialty drugs.
The bill would prohibit a health insurer from requiring the use of an
insurer-designated pharmacy to dispense a drug directly to a patient
with the intention that the patient will transport the medication to a
physician's office, hospital or clinic for administration. This type of
policy is also known "brown bagging."
It would authorize an insurer to offer coverage for, but not require,
the use of a home infusion pharmacy to dispense intravenous drugs that
have been ordered by a physician for administration to a patient at a
site other than the patient's provider site.
It would prohibit an insurer from requiring the distribution of
patient-specific medication from an insurer-designated pharmacy to a
physician's office, hospital or clinic (known as "white bagging") unless
the insurer has an agreement with the provider that is responsible for
receiving and administering the medication that includes specified
notice, quality assurance and patient safety provisions.
It would prohibit "white bagging" policies for medications requiring
sterile compounding by a provider or medications with a patient-specific
dosage requirement that is based on lab or test results on the day of
the patient's visit.
 
JUSTIFICATION:
Increasingly, health insurance plans have begun implementing policies
that prohibit a healthcare provider from procuring and managing the
handling of a drug used in patient care. Instead, the insurer requires
the use of an insurer-designated, third-party specialty pharmacy to
dispense a specialty drug for administration by a clinician. These poli-
cies are commonly referred to as "white bagging" and "brown bagging."
"Brown bagging" policies require a specialty drug to be dispensed by an
insurer-designated pharmacy directly to a Patient, who then delivers the
drug to a clinician for administration. This policy presents numerous
chain of custody and patient safety concerns, which were recognized as
problematic and, as such, prohibited by the NYS Medicaid program in its
August 2019 eMed guidance. The guidance states that this practice "caus-
es concern regarding proper storage or handling, which can affect drug
efficacy. Brown bagging is not acceptable under NYS Medicaid." This bill
would extend and apply this prohibition to all state-regulated insurance
plans and policies.
"White bagging" policies also require the use of a third-party,
insured-directed pharmacy to dispense a specialty drug. However, in this
case, the drug is delivered directly to a hospital pharmacy or physi-
cian's office, which then stores the drug until a clinician administers
the drug to the patient. Since the provider no longer controls or owns
the specialty drug, they cannot verify the source of the medications.
Also, since they are not responsible for coordinating the delivery and
receipt of the drug, they are unable to ensure that the drug was stored
at the proper temperature prior to arrival at the hospital or clinic, or
that the hospital or clinic is ready and able to receive and store
products. Unexpected or surprise deliveries create significant, avoid-
able challenges related to supply chain and storage capacity that could
result in a violation of the individual hospital supply acquisition
guidelines.
The NYS Medicaid program also recognizes this "white bagging" policy and
deems it acceptable only under specific guidelines addressing concerns
related to responsibility and timeliness of delivery of these drugs to
the administering clinician. This bill would extend and expand these
guidelines to all state-regulated insurance plans and policies to ensure
that comprehensive patient protections and quality assurance measures
are in place for all insureds, regardless of their health insurance
plan. The bill would also include additional "white bagging" protections
to address patient care implications related to certain drug therapy
treatments, such as oncology. It would prohibit "white bagging" for
drugs that require a provider to make real-time medication adjustments
based on necessary, same day lab and test results. This important
patient protection would prevent unnecessary delays in treatment, which
could increase patient risk and adversely affect the patient's treat-
ment.
 
PRIOR LEGISLATIVE HISTORY:
2023-24: S7413 - Referred to Insurance
2022: S7252 - Referred to Insurance
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S5314: 3217-b insurance law, 4325 insurance law, 4406-c public health law