The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: SB 730
INTRODUCER: Senators Harrell and Polsky
SUBJECT: Step-therapy Protocols
DATE: February 21, 2022 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Johnson Knudson BI Favorable
2. Brown Brown HP Favorable
3. Johnson Phelps RC Favorable
I. Summary:
SB 730 establishes standards for processing step-therapy protocol exemptions. A step-therapy
protocol is a written protocol used by a health insurer (insurer) or a health maintenance
organization (HMO) that specifies the order in which certain medical procedures, treatments, or
prescription drugs must be used to treat a condition. A protocol exemption is a determination by
an insurer or HMO to authorize the use of an alternate procedure, treatment, or prescription drug
to treat a condition of an insured or subscriber rather than the procedure, treatment, or drug
indicated by the step-therapy protocol.
SB 730 provides that an insurer or HMO must prescribe the manner, form, and timeframe in
which an insured or subscriber may request a protocol exemption. Further, SB 730 requires the
insurer or HMO to authorize or deny a protocol exemption in a reasonable amount of time. If the
insurer or HMO denies the protocol exemption, the insurer or HMO must provide the insured or
subscriber with a written response and the procedure for appealing a denial. The bill provides
insurers and HMOs with wide discretion in meeting these requirements.
The bill provides an effective date of July 1, 2022.
II. Present Situation:
Insurers use many cost containment and utilization review strategies to manage medical and drug
spending and patient safety. For example, health plans may place utilization management
requirements on the use of certain medical treatments or drugs. Under a prior authorization
requirement, for example, an insured’s or subscriber’s coverage may require that a health care
provider must seek authorization from the insurer or HMO before the insurer or HMO becomes
obligated to pay for a specified diagnostic or therapeutic treatment or specified prescription
BILL: SB 730 Page 2
drugs under the patient’s coverage.1 In some cases, health plans may require an insured or
subscriber to use a step-therapy protocol for drugs or a medical treatment, which requires the
insured or subscriber to try one drug or medical procedure for treatment first to treat the medical
condition before the insurer or HMO will authorize coverage for a different drug, procedure, or
treatment for that condition.2
Regulation of Insurers and Health Maintenance Organizations
The Office of Insurance Regulation (OIR) licenses and regulates the activities of insurers,
HMOs, and other risk-bearing entities.3 The Florida Insurance Code (code) requires insurers and
HMOs to provide cost containment measures. Section 627.4234, F.S., requires a health insurance
policy or health care services plan, which provides medical, hospital, or surgical expense
coverage delivered or issued for delivery in this state, to include one or more specified
procedures or provisions to contain costs or cost increases.
Prior Authorization
Any “health insurer” (health insurer, HMO, Medicaid managed care plan), or pharmacy benefit
manager on behalf of the health insurer, that does not use an online prior authorization form must
use a standardized form adopted by the Financial Services Commission (FSC) to obtain a prior
authorization for a medical procedure, course of treatment, or prescription drug benefit.4 The
form must include all clinical documentation necessary for the health insurer to make a decision.
Step-Therapy Protocols
The code5 prohibits insurers or HMOs issuing comprehensive major medical health coverage
from requiring an insured or subscriber to complete a step-therapy protocol for a certain
prescription drug if the following conditions are met:
 The insured or subscriber has previously been approved to receive the drug through a step-
therapy protocol imposed by a insurer that issued major medical coverage to the insured; and,
 The insured or subscriber provides documentation that an insurer or HMO made payment for
the drug on the insured’s behalf within the past 90 days.
However, this provision does not require an insurer or an HMO to add a drug to its drug
formulary or cover a drug not currently covered in order to comply with the step-therapy
restriction.6
1
JAMA Health Forum. 2021;2(5):e210859.doi.
2
HEALTH AFFAIRS 40, No. 11 (2021) 1749-1757.
3
Section 20.121(3), F.S. the Office of Insurance Regulation is an office within the FSC. The FSC is composed of the
Governor, the Attorney General, the Chief Financial Officer, and the Commissioner of Agriculture. The FSC members serve
as the agency head for purposes of rulemaking.
4
Section 627.42392, F.S.
5
Sections 627.4293 and 641.31(46), F.S.
6
Id.
BILL: SB 730 Page 3
Federal Patient Protection and Affordable Care Act
The federal Patient Protection and Affordable Care Act (PPACA)7 requires insurers and HMOs
to make coverage available to all individuals and employers, without exclusions for preexisting
conditions and without basing premiums on any health-related factors. The PPACA also
mandates essential health benefits8 and other provisions.
The PPACA requires insurers and HMOs that offer qualified health plans (plans) to provide 10
categories of essential health benefits (EHB), which includes prescription drugs.9 For purposes of
complying with the federal EHB requirements for prescription drugs, plans must include in their
formulary drug list the greater of one drug for each U.S. Pharmacopeia (USP) category and class;
or the same number of drugs in each USP category and class as the state’s EHB benchmark
plan.10
State and Federal Transparency Provisions Relating to Benefits, Coverage Exceptions, and
Appeals for Insureds and Subscribers
Benefits
Insurers and HMOs are required to provide an outline of coverage or other information
describing the benefits, coverages, exclusions, and limitations of a policy or contract. 11 Further,
each contract, certificate, or member handbook of an HMO must delineate the services for which
a subscriber is entitled and any limitations under the contract.12
Access to Formulary Drug List and any Restrictions
A plan is required to publish on its website a current and complete list of all covered drugs on its
formulary drug list, including any tiered structure and any restrictions on the way a drug can be
obtained, in a manner that is easily accessible to insureds or subscribers, prospective insureds or
subscribers, the state, and the public.13
Request for Prescription Drug Exception14
Federal rules establish a uniform exceptions process for insurers and HMOs (plans) that allows
an insured or subscriber, or their prescribing physician, to request and gain access to clinically
7
The Patient Protection and Affordable Care Act (Pub. L. No. 111–148) was enacted on March 23, 2010. The Health Care
and Education Reconciliation Act of 2010 (Pub. L. No. 111–152), which amended and revised several provisions of the
Patient Protection and Affordable Care Act, was enacted on March 30, 2010.
8
42 U.S.C. s.18022.
9
See Center for Consumer Information & Insurance Oversight, Information on Essential Health Benefits (EHB) Benchmark
Plans https://www.cms.gov/cciio/resources/data-resources/ehb.html (last viewed Jan. 28, 2022) for Florida’s benchmark
plan.
10
45 C.F.R. 156.122(a)
11
Section 627.642, F.S.
12
Section 641.31(4), F.S.
13
45 C.F.R. s. 156.122(d).
14
45 C.F.R. s. 156.122(c).
BILL: SB 730 Page 4
appropriate drugs not otherwise covered by the insurer or HMO (request for exception).15 If a
plan denies a request for a standard exception or an expedited exception request, the plan must
have a process for the insured or subscriber to request the original exception request and
subsequent denial of such request be reviewed by an independent review organization.
Standard exception request. A plan must have a process for an insured or subscriber or his or
her prescribing physician to request a standard review of a decision that a drug is not covered by
the plan. A plan must make its determination on a standard exception and notify the insured or
subscriber and the prescribing physician of the coverage determination no later than 72 hours
following receipt of the request. A plan that grants a standard exception request must provide
coverage of the non-formulary drug for the duration of the prescription, including refills.
Expedited exception request. A plan must have a process for an insured or subscriber or his or
her prescribing physician to request an expedited review based on exigent circumstances.
Exigent circumstances exist when an enrollee is suffering from a health condition that may
seriously jeopardize the enrollee’s life, health, or ability to regain maximum function or when an
enrollee is undergoing a current course of treatment using a non-formulary drug. A plan must
make its coverage determination on an expedited review request based on exigent circumstances
and notify the enrollee or the prescribing physician of its coverage determination no later than 24
hours following receipt of the request. A plan that grants an exception based on exigent
circumstances must provide coverage of the non-formulary drug for the duration of the exigency.
Internal Claim Appeals and External Review Program16
Plans must implement an internal appeals and independent external review process for claims
that are denied. Generally, an insured or subscriber may file an internal appeal with the plan
within 180 days of receipt of the notice of a denied claim. 17 If an insured or subscriber requests
an internal appeal of a denied claim, the plan must provide a written determination of the
decision within the following time:
 Within 30 days, if it is a request for prior authorization.
 Within 60 days, if the services have already been received.
 Within 72 hours or less for urgent care cases.18
An insured or subscriber must file a written request for an external review within four months
after the date of receipt of the notice or final determination from the plan.19
15
The exception process applies to drugs that are not included on the formulary drug list of the plan. The internal and
external appeals process prescribed in 45 C.F.R. s. 147.136 applies if an enrollee receives an adverse benefit determination
for a drug that is included on the plan’s formulary drug list.
16
45 C.F.R. s. 147.136. The rules apply to non-grandfathered plans, which include health insurance policies that were first
sold or significantly modified in certain ways after March 23, 2010.
17
See Healthcare.gov, Appealing a health plan decision-Internal appeals, available at https://www.healthcare.gov/appeal-
insurance-company-decision/internal-appeals/ (last visited Jan. 29, 2022). A claim is a request for coverage.
18
Id.
19
See Healthcare.gov, Appealing a health plan decision-External Review, available at https://www.healthcare.gov/appeal-
insurance-company-decision/external-review/ (last visited Jan. 28, 2022).
BILL: SB 730 Page 5
A 2021 report analyzed claims denials and appeals in PPACA marketplace plans.20 Of all denials
with reasons reported for 2019, about 18 percent were denied because the claim was for an
excluded service; about nine percent were denied due to prior authorization or lack of referral;
and less than one percent were denied based on medical necessity. The remaining plan-reported
denials (72 percent) were denied for other reasons.21
Florida State Group Insurance Program
Under the authority of s. 110.123, F.S., the Department of Management Services (DMS), through
the Division of State Group Insurance, administers the state group insurance program by
providing employee benefits such as health, life, dental, and vision insurance products under a
cafeteria plan consistent with s. 125, Internal Revenue Code. To administer the state group health
insurance program, the DMS contracts with third party administrators, HMOs, and a PBM for
the state employees’ prescription drug program pursuant to s. 110.12315, F.S. As a group plan,
the program must comply with federal regulations of internal appeal and external review
programs for drug exceptions and benefit disputes.
III. Effect of Proposed Changes:
Sections 1 and 2 amend ss. 627.42393 and 641.31, F.S., respectively. The bill defines in those
sections of statute the terms “protocol exemption” and “step-therapy protocol.”
The bill requires an insurer or HMO to publish on its website and provide to an insured or
subscriber (or his or her health care provider) written procedures for requesting a protocol
exemption or an appeal of an insurer or HMO’s denial of a protocol exemption request. At a
minimum, the procedure must include:
 The manner in which the insured or subscriber may request a protocol exemption, including a
form for making the request.
 The manner and timeframe in which the insurer or HMO must authorize or deny a protocol
exemption request, including the requirement that such response must occur within a
“reasonable time.”
 The manner and the timeframe in which an insured or subscriber may appeal a denial of an
insurer or HMO protocol exemption request.
An authorization of a protocol exemption request must specify the approved drug, procedure, or
course of treatment. A denial must include a written explanation of the reason for the denial and
the procedure for appealing the denial. An insurer or HMO may request relevant medical records
in support of a protocol exemption request.
Section 3 provides an effective date of July 1, 2022.
20
Kaiser Family Foundation, Claims Denials and Appeals in ACA Marketplace Plans (Jan. 20, 2021) available at
https://www.kff.org/private-insurance/issue-brief/claims-denials-and-appeals-in-aca-marketplace-plans/ (last visited Jan. 28,
2022). The federal government requires HealthCare.gov plans or marketplace plans to report reasons for claims denials at the
plan level.
21
Id.
BILL: SB 730 Page 6
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
Currently, insurers and HMOs must comply with federal regulations that prescribe
uniform time, notice, and protocol to process drug exceptions and benefit denials and
appeals for insureds and subscribers. The provisions of the bill are not consistent with the
provisions of the federal rules. That inconsistency may cause confusion for treating
physicians, insureds, and subscribers.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
The bill requires insurers and HMOs to publish and provide a protocol exemption procedure to
insureds and subscribers. The bill provides wide discretion for an insurer or HMO in establishing
timeframes and the manner to review, deny, and appeal step-therapy exceptions for a procedure,
treatments, or prescription drugs. For instance, the bill does not specify:
 The manner in which an insurer must allow the protocol exemption requests to be made, only
that the insurer or HMO provide a form for making the request.
 The content of the form used to request a protocol exemption.
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 What is “reasonable” in terms of the timeframe in which the insurer must authorize or deny a
protocol exemption r