California Insurance CEO Ricardo Lara announced a major settlement with National Health Insurance Company (National Health).
The California Department of Insurance said that, since 2015, the company has repeatedly violated California law by failing to post a list of prescription drugs online (known as a formulary) and misclassifying certain drugs in expensive categories, denying consumers what they need. making critical and analytical decisions.
The company has agreed to pay the department $1.995 million in fines over drug charges the department argued were unfair and discriminatory.
“This settlement is a win for consumers, and a signal to other insurance companies that we will continue to comply with California law, protect consumers, and ensure that companies conduct business fairly and transparently,” said Commissioner Lara. “California law is clear. Insurance companies cannot make prescriptions that target consumers with serious medical conditions. Patients must have an accurate, up-to-date list of prescribed medications, and have the right to make informed medical decisions.”
The department’s ongoing audit found National Health violated California law multiple times in small and large group inspections. When National Health published its prescriptions online in 2019, it was not a list of prescription drugs, but an old list of drugs that were already covered.
The department said that this practice restricts the registration of people with certain diseases. These incorrect forms have resulted in reduced benefits for consumers with certain conditions, which may discourage policyholders from filing complaints or entice policy-seekers to seek coverage elsewhere.
Another example of National Health that appears to be reducing benefits for consumers with certain health conditions is when, on July 1, 2019, it placed nearly all immunosuppressive drugs in denial and all covered drugs that the department tested positive for multiple sclerosis, HIV, hepatitis. B, and hepatitis C are among the most cost-sharing groups, regardless of type or brand name. By putting all these drugs in one category, people with chronic diseases may be prevented from registering for treatment due to prohibitive costs, and this may also lead to reduced adherence to the treatment plan.
In addition, the department found that the National Health’s formulary requires prior authorization for all HIV drugs. Prior authorization allows the insurer to determine whether a drug is medically necessary before coverage, rather than leaving it up to the consumer’s doctor’s discretion. The need to obtain a prior authorization can cause delays and denials of prescriptions to a consumer whose physician has determined that the prescribed medication is medically necessary.
Finally, the department found that National Health has classified many preventive medications, contraceptives, and other pharmacy products that should be paid without cost into groups based on patient cost-sharing.
In California, health insurance companies cannot provide coverage that discriminates against people with chronic illnesses, and must provide coverage that ensures the feasibility of outpatient treatment. California law also requires that copayments, coinsurance, and patient cost-sharing for outpatient drugs be reasonable so that patients can access medically necessary drugs.