Section 2218.82 - Standard Prescription Drug Formulary Template(a) Structure and content. A formulary shall be maintained in a format that is text searchable and shall include all of the following sections in the order listed:(3) Informational section.(4) Categorical list of prescription drugs.(5) Alphabetical index of prescription drugs.(b) Title page. The title page of a formulary shall include all of the following contents: (2) The name of the health insurer that maintains the formulary.(3) The name of each health insurance product to which the formulary applies. Product names listed on a formulary shall correspond to product names used on corresponding coverage documents, summary of benefits and coverage documents (SBCs), network provider directories, and other communications with insureds including identification cards as required under the Uniform Provider Directory Standards developed by the commissioner pursuant to subdivision (k) of section 10133.15 of the Insurance Code.(4) The date the formulary was last updated.(5) Notice that the formulary is subject to change and all previous versions of the formulary are no longer in effect.(6) A direct website link (URL) for the location of the electronic version of the formulary posted on the health insurer's public website. The formulary shall be accessible to potential insureds, insureds, providers, and the general public. The formulary is accessible if it can be viewed on an insurer's website through a clearly identifiable link or tab without requiring an individual to create or access an account or enter a policy number, and if the health insurer offers more than one plan, when an individual can easily discern which formulary applies to which plan.(7) Instructions for contacting the health insurer's customer service department. A health insurer shall have customer service representatives on staff during normal business hours who are prepared to provide specific information concerning prescription drug benefits, including, but not limited to: information concerning drugs covered under the medical benefit of an insured's plan; the processes for submitting an exception request and requesting prior authorization and step therapy exceptions; and actual dollar amounts of cost sharing for drugs under an insured's plan, including drugs subject to coinsurance.(8) A direct website link (URL) for the location of, or specific instructions for locating, plan-specific coverage documents that include cost sharing applicable to prescription drugs for each plan to which the formulary applies, and that are posted on a health insurer's public website.(c) Informational section. The informational section of a formulary shall include all of the following contents: (1) Definitions for terms. The following terms are intended solely for informing consumers and shall be defined in a formulary as set forth below. A health insurer shall submit proposed omissions of terms, deviations from the required definitions, and substitution of alternative terms to the commissioner for review prior to implementation.
(A) "Brand name drug" means a drug that is marketed under a proprietary, trademark-protected name. A brand name drug is listed in this formulary in all CAPITAL letters.(B) "Coinsurance" means a percentage of the cost of a covered health care benefit that you pay after you have paid the deductible, if a deductible applies to the health care benefit.(C) "Copayment" means a fixed dollar amount that you pay for a covered health care benefit after you have paid the deductible, if a deductible applies to the health care benefit.(D) "Deductible" means the amount you pay for covered health care benefits that are subject to the deductible before your health insurer begins to pay. If your health insurance policy has a deductible, it may have either one deductible or separate deductibles for medical benefits and prescription drug benefits. After you pay your deductible, you usually pay only a copayment or coinsurance for covered health care benefits. Your insurance company pays the rest.(E) "Drug Tier" means a group of prescription drugs that correspond to a specified cost sharing tier in your health insurance policy. The drug tier in which a prescription drug is placed determines your portion of the cost for the drug.(F) "Exception request" means a request for coverage of a non-formulary drug. If you, your designee, or your prescribing health care provider submits a request for coverage of a non-formulary drug, your insurer must cover the non-formulary drug when it is medically necessary for you to take the drug.(G) "Exigent circumstances" means when you are suffering from a medical condition that may seriously jeopardize your life, health, or ability to regain maximum function, or when you are undergoing a current course of treatment using a non-formulary drug.(H) "Formulary" or "prescription drug list" means the list of drugs that is covered by your health insurance policy under the prescription drug benefit of the policy.(I) "Generic drug" means a drug that is the same as its brand name drug equivalent in dosage, strength, effect, how it is taken, quality, safety, and intended use. A generic drug is listed in this formulary in italicized lowercase letters.(J) "Medically Necessary" means health care benefits needed to diagnose, treat, or prevent a medical condition or its symptoms and that meet accepted standards of medicine. Health insurance usually does not cover health care benefits that are not medically necessary.(K) "Non-formulary drug" means a prescription drug that is not listed on this formulary.(L) "Out-of-pocket costs" means your expenses for health care benefits that aren't reimbursed by your health insurance. Out-of-pocket costs include deductibles, copayments, and coinsurance for covered health care benefits, plus all costs for health care benefits that are not covered.(M) "Prescribing provider" means a health care provider who can write a prescription for a drug to diagnose, treat, or prevent a medical condition.(N) "Prescription" means an oral, written, or electronic order from a prescribing provider authorizing a prescription drug to be provided to a specific individual.(O) "Prescription drug" means a drug that by law requires a prescription.(P) "Prior Authorization" means a decision by your health insurer that a health care benefit is medically necessary for you. If a prescription drug is subject to prior authorization in this formulary, your prescribing provider must request approval from your health insurer to cover the drug before you fill your prescription. Your health insurer must grant a prior authorization request when it is medically necessary for you to take the drug.(Q) "Step therapy" means a specific sequence in which prescription drugs for a particular medical condition must be tried. If a drug is subject to step therapy in this formulary, you may have to try one or more other drugs before your health insurance policy will cover that drug for your medical condition. If your prescribing provider submits a request for an exception to the step therapy requirement, your health insurer must grant the request when it is medically necessary for you to take the drug.(2) Definitions for any additional or different terms used in the formulary that are necessary for comprehending the formulary.(3) Instructions on how to locate a prescription drug in the categorical list of prescription drugs. The instructions shall explain that: (A) A prescription drug may be located by looking up the therapeutic category and class to which the drug belongs or the brand or generic name of the drug in the alphabetical index; and(B) If a generic equivalent for a brand name drug is not available on the market or is not covered, the drug will not be separately listed by its generic name.(4) A description of the manner in which drugs are listed in the categorical list of prescription drugs. (A) At a minimum, the description shall explain that:1. A drug is listed alphabetically by its brand and generic names in the therapeutic category and class to which it belongs;2. The generic name for a brand name drug is included after the brand name in parentheses and all lowercase italicized letters;3. If a generic equivalent for a brand name drug is both available and covered, the generic drug will be listed separately from the brand name drug in all lowercase italicized letters; and4. If a generic drug is marketed under a proprietary, trademark-protected brand name, the brand name will be listed after the generic name in parentheses and regular typeface with the first letter of each word capitalized.(B) The description shall include an example of a drug that is available both as a brand name drug and a generic equivalent to illustrate how such a drug is listed.(5) A description of the drug tiers in the formulary, if drugs are grouped into tiers. The description shall include tier numbers designating the tiers and a plain language definition for each tier that accurately describes the types of prescription drugs that are placed in each tier and that are used in the corresponding coverage documents. If the formulary is subject to subdivision (b) of section 10123.1932 of the Insurance Code, drugs shall be placed in tiers consistent with the drug tier definitions in that subdivision. The description shall explain how to determine the following:(A) Which prescription drugs on the formulary are preferred drugs; and(B) The cost sharing for each drug tier, including, for products subject to subdivision (a) of section 10123.1932 of the Insurance Code, the maximum dollar amount of cost sharing that may apply to a drug.(6) A description of all utilization management procedures that the health insurance product imposes on prescription drug coverage, including, but not limited to, prior authorization, step therapy, quantity limits, and network limitations on access including specialty pharmacy restrictions.(7) Information about the differences between drugs covered under the medical benefit of the product and drugs covered under the outpatient prescription drug benefit of the product, and instructions on how to obtain coverage information for drugs covered under the medical benefit.(8) Notice that the health insurer must update the formulary with changes on a monthly basis. The notice shall include a description of the types of changes a health insurer may make to the formulary during the plan or policy year, and the dates on which such changes are effective. The notice may also include a description of any prior notification a health insurer will provide an affected insured of a formulary change. At a minimum, the types of changes described in the notice shall include the following: (A) Removal of a drug or dosage form of a drug from the formulary;(B) Any change in tier placement of a drug that results in an increase in cost sharing; and(C) Adding or changing utilization management procedures applicable to a drug.(9) An explanation that the presence of a prescription drug on the formulary does not guarantee that an insured will be prescribed that prescription drug by the insured's prescribing provider for a particular medical condition.(10) Notice that the health insurer must cover a non-formulary drug when medically necessary and a detailed description of the process for submitting an exception request. The description shall state that:(A) A health insurer must notify the insured or the insured's designee and the insured's prescribing provider of its coverage determination no later than 72 hours following receipt of a non-urgent request and 24 hours following receipt of a request based on exigent circumstances;(B) A health insurer must provide coverage pursuant to a non-urgent request for the duration of the prescription, including refills;(C) A health insurer must provide coverage pursuant to a request based on exigent circumstances for the duration of the exigency; and(D) An insured may appeal the denial of an exception request and that the coverage documents provide more information on appeal rights and procedures.(11) Instructions on how to locate and fill a prescription through a network retail pharmacy, mail order pharmacy, and specialty pharmacy, as applicable.(12) A detailed description of the process for requesting prior authorization or a step therapy exception. The description shall state that if a health insurer fails to respond to a completed prior authorization or step therapy exception request within 72 hours of receiving a non-urgent request and 24 hours of receiving a request based on exigent circumstances, the request is deemed approved and the health insurer may not deny the request thereafter.(13) Notice of an insured's rights concerning step therapy as provided in subdivision (c) of section 10123.201 of the Insurance Code.(14) In a formulary applicable to a health insurance product to which section 10112.27 of the Insurance Code applies, notice that, pursuant to section 1367.22 of the Health and Safety Code, a health insurer may not limit or exclude coverage for a drug if the health insurer previously approved coverage of the drug for an insured's medical condition and the prescribing provider continues to prescribe the drug for the medical condition, provided that the drug is appropriately prescribed and safe and effective for treating the insured's medical condition.(15) A description of the coverage provided under the outpatient prescription drug benefit for drugs, devices, and FDA-approved products pursuant to sections 10112.2, 10123.196, and 10176.61 of the Insurance Code, including any over-the-counter drugs, devices, and FDA-approved products that must be covered pursuant to those sections. The description shall include a detailed description of the process required to acquire those drugs, devices, and FDA-approved products through the outpatient prescription drug benefit.(16) A description of the limit on cost sharing for orally administered anti-cancer drugs required by section 10123.206 of the Insurance Code.(17) If applicable to any drugs listed on the formulary, a detailed description of the process for requesting coverage and obtaining drugs that are subject to specialty pharmacy restrictions or other network limitations on coverage.(18) An annotated legend or key to all tier numbers, abbreviations, and designations used in the formulary.(d) Categorical list of prescription drugs. (1) Organization of categorical list. (A) The categorical list of prescription drugs shall be organized by drug category and class based on a current, commonly used, and widely accepted drug classification system such as the U.S. Pharmacopeial Convention (USP) Medicare Model Guidelines or the American Hospital Formulary Service (AHFS) Pharmacologic-Therapeutic Classification. A formulary shall identify the drug classification system that is used.(B) Category names shall appear alphabetically, and class names shall appear alphabetically within a category.(C) Prescription drugs shall be listed in drug classes consistent with the drug classification system. A prescription drug that belongs to multiple drug classes shall be listed in each applicable class.(D) Brand name and generic prescription drugs shall be alphabetically listed by respective brand or established name within a class. In addition to a category and class name provided by the drug classification system, the categorical list shall include, where possible, a plain language description of the category and class.(2) The categorical list shall include a complete list of all prescription drugs covered under the outpatient prescription drug benefit of the product, including both generic and brand name drugs. A formulary may include prescription drugs that are covered only under the medical benefit of the product, provided that each of those drugs is clearly identified as a drug that is covered only under the medical benefit. A formulary may include non-formulary prescription drugs, provided that each of those drugs is clearly identified as a non-formulary drug.(3) Columns in categorical list. (A) The categorical list shall include the following columns in the order listed from left to right: 1. "Prescription Drug Name";2. "Drug Tier" (except that if drugs are not grouped into tiers, this column may be omitted); and3. "Coverage Requirements and Limits".(B) The column headings shall appear on the top of each page of the categorical list.(4) In the "Prescription Drug Name" column, the proprietary name for a brand name drug shall appear in all CAPITAL letters. The established name for the brand name drug shall be placed in parentheses after the brand name in all lowercase italicized letters. The established name for a generic drug shall appear in all lowercase italicized letters. If a generic drug is sold under a brand name, the brand name shall be placed in parentheses after the established name in regular typeface with the first letter of each word capitalized.(5) The "Prescription Drug Name" column shall include all covered dosage forms and strengths for each prescription drug. If there are differences in tier placement, quantity limit, prior authorization, step therapy, or other utilization management procedures or benefit offerings for a prescription drug based on its differing dosage forms or strengths, the categorical list shall include separate rows for the dosage forms and/or strengths of the prescription drug to clearly identify the differences.(6) "Drug Tier" column. (A) The "Drug Tier" column shall identify the cost sharing tier in which a prescription drug is placed.(B) A health insurer shall assign a unique tier number, abbreviation, or designation, as appropriate, to the following: 1. Prescription drugs, devices, and FDA-approved products covered under the outpatient prescription drug benefit of the product pursuant to sections 10112.2 and 10123.196 of the Insurance Code;2. Orally administered anti-cancer drugs that are subject to the cost sharing limit in section 10123.206 of the Insurance Code;3. Non-formulary drugs, if included in the formulary; and4. Drugs covered only under the medical benefit of the product, if included in the formulary.(C) The tier numbers, abbreviations, and designations shall be explained in the annotated legend or key.(7) The "Coverage Requirements and Limits" column shall include abbreviations or designations for all utilization management procedures that the health insurer imposes on prescription drug coverage, including, but not limited to, prior authorization, step therapy, quantity limits, and network limitations on access including specialty pharmacy restrictions, in addition to any other relevant information applicable to the coverage provided for a prescription drug. For each prescription drug that is subject to one or more quantity limits, the applicable quantity limits shall be described with specificity. Each abbreviation and designation used in the "Coverage Requirements and Limits" column shall be explained in the annotated legend or key.(8) The annotated legend or key to all tier numbers, abbreviations, and designations used in the formulary shall appear on each page of the categorical list.(e) Example categorical list based on United States Pharmacopeial Convention (USP) Medicare Model Guidelines Version 6.0, for illustration purposes only. Drug names are not depicted as required by subdivision (d) of this section. Prescription Drug Name | Drug Tier | Coverage Requirements and Limits |
Analgesics - Drugs for Relief of Pain |
| Nonsteroidal Anti-inflammatory Drugs - [<Plain Language Description>] |
| | <Drug Name 1> | <Tier 1> | <Util. Mgmt.> |
| | <Drug Name 2, Dosage Form A, Strength A> | <Tier 1> | <Util. Mgmt.> |
| | <Drug Name 2, Dosage Form B, Strength A> | <Tier 2> | <Util. Mgmt.> |
| | <Drug Name 2, Dosage Form B, Strength B> | <Tier 3> | <Util. Mgmt.> |
| Opioid Analgesics, Long-acting - [<Plain Language Description>] |
| | <Drug Name 3> | <Tier 2> | <Util. Mgmt.> |
| | <Drug Name 4, Dosage Form A, Strength A> | <Tier 1> | <Util. Mgmt.> |
| | <Drug Name 4, Dosage Form A, Strength B> | <Tier 2> | <Util. Mgmt.> |
| Opioid Analgesics, Short-acting - [<Plain Language Description>] |
| | <Drug Name 4, Dosage Form B> | <Tier 3> | <Util. Mgmt.> |
| | <Drug Name 5> | <Tier 1> | <Util. Mgmt.> |
Anesthetics - Drugs for Blocking Pain |
| Local Anesthetics - [<Plain Language Description>] |
| | <Drug Name 6> | <Tier 1> | <Util. Mgmt.> |
| | <Drug Name 7> | <Tier 2> | <Util. Mgmt.> |
(f) Alphabetical index of prescription drugs. The index shall list each covered brand name and generic drug by respective brand name or established name in alphabetical order and include the page number for the location of the drug in the categorical list of prescription drugs.Cal. Code Regs. Tit. 10, § 2218.82
1. New section filed 8-31-2018; operative 10-1-2018 (Register 2018, No. 35).
2. Change without regulatory effect amending subsections (c)(9) and (c)(10)(A) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.
3. Change without regulatory effect amending subsections (c)(5) and (c)(5)(B) and amending NOTE filed 8-18-2023 pursuant to section 100, title 1, California Code of Regulations (Register 2023, No. 33). Note: Authority cited: Section 10123.192, Insurance Code. Reference: Sections 10112.2, 10112.27, 10123.191, 10123.192, 10123.193, 10123.1932, 10123.196, 10123.197, 10123.201, 10123.206, 10133.15 and 10176.61, Insurance Code; and Section 1367.22, Health and Safety Code.
1. New section filed 8-31-2018; operative 10/1/2018 (Register 2018, No. 35).
2. Change without regulatory effect amending subsections (c)(9) and (c)(10)(A) filed 7-14-2021 pursuant to section 100, title 1, California Code of Regulations (Register 2021, No. 29). Filing deadline specified in Government Code section 11349.3(a) extended 60 calendar days pursuant to Executive Order N-40-20.
3. Change without regulatory effect amending subsections (c)(5) and (c)(5)(B) and amending NOTE filed 8-18-2023 pursuant to section 100, title 1, California Code of Regulations (Register 2023, No. 33).