Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


February 15, 2019


The Honorable Gene Suellentrop, Chairperson
Senate Committee on Public Health and Welfare
Statehouse, Room 441-E
Topeka, Kansas 66612
Dear Senator Suellentrop:
SUBJECT: Fiscal Note for SB 93 by Senate Committee on Public Health and Welfare
In accordance with KSA 75-3715a, the following fiscal note concerning SB 93 is
respectfully submitted to your committee.
SB 93 would require health insurance plans to consider available recognized evidence-
based and peer-reviewed clinical practice guidelines when establishing a step therapy protocol.
Step therapy protocol is defined as a protocol or program that establishes the specific sequence in
which prescription drugs for a specified medical condition, including self-administered and
physician-administered drugs, are medically appropriate for a particular patient and are covered
under a health insurance plan.
The bill would require a clear, readily accessible and convenient process to request a step
therapy exception and outlines when a health insurance plan would grant an override to the step
therapy protocol. The patient or prescriber could appeal the denial of a step therapy exception. A
health insurance plan could require a patient to try a generic equivalent drug prior to providing
coverage for equivalent branded prescription drugs. The bill would not mandate coverage for
prescription medication if the coverage is not already a covered benefit by the patient’s health
insurance plan.
The Insurance Department indicates that the provisions of SB 93 are not clear as to whether
step therapy denials qualify for external review. The bill would require carriers to provide an
affirmative notice to policyholders of a right to external review of adverse decisions as well as
declare those decisions to be “final adverse determinations” for the purpose of the external review
statute. The Department assumes there would be a modest increase in the number of external
reviews which it would need to conduct as a result of the bill. The Department’s cost for external
review of prescription drug denial ranges from $250 to $500 per review. As an example, if the
The Honorable Gene Suellentrop, Chairperson
Page 2—SB 93

Department receives four new review requests per month as a result of the bill, it would experience
a potential net cost increase of $500 to $1,000 per month. However, the cost is directly based on
the number of new review requests, and the Department has no method of determining that
number. Therefore, a precise fiscal effect cannot be determined. In addition, the Department
recoups approximately 61.0 percent of the cost of reviews from the insurance carrier when the
company’s denial is overturned through the external review process. SB 93 would not have a
fiscal effect on the Kansas Department of Health and Environment, Board of Pharmacy, the Kansas
Association of Counties or the League of Kansas Municipalities. Any fiscal effect associated with
SB 93 is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget