Texas Law Passed to Improve Patient Protections Against Step Therapy Practices

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Learn How These Changes Affect You

The state of Texas recognizes the importance of patient protections and leads the way in establishing and improving protections for its citizens through statute.

In 2017, Texan officials worked with key opinion leaders and insurance companies to pass a new law to provide patient protections around the use of step therapy (fail first) protocols. Texas legislators and collaborators hope that this law will maximize access to care and decrease long-term costs for patients.

The purpose of this page is to provide answers to frequently asked questions about this new law and the protections it establishes for patients.


Frequently asked questions:

Frequently Asked Questions About the New Law

1) What are step therapy (fail first) protocols?

Step therapy protocols, also known as “fail first” protocols, are insurance policies that force patients to try insurer-preferred medication(s) before a provider-prescribed medication will be covered. Although this makes sense in some cases, there are many cases where it would be more cost-effective and beneficial for the patient if they receive the initially prescribed drug as soon as possible.

2) What is the new step therapy reform law in Texas?

The new law is reflected in Chapter 1369 of the Texas insurance code. This new law protects patients from being harmed by these step therapy practices by ensuring that these step therapy policies are informed by non-biased clinical guidelines. It also outlines clear exceptions to step therapy policies and provides a transparent and expedited pathway through which to receive an exception from step therapy requirements.

Click here to view the full text of the new law

3) Which health insurance plans does the new law apply to?

The new law applies to commercial health insurance plans, like individual or family plans acquired through the insurance marketplace or directly from an insurance company. It does not apply to Medicare (federal) plans, Medicaid fee for service plans, labor benefit plans, or to self-insured employer plans (ERISA plans). Applicable insurance plans will be denoted by “TDI” or “DOI” printed on the insurance card.

4) What specifically does the law require of health insurance plans?

The new law:

  • Requires health insurers to utilize evidence-based and peer-reviewed clinical review criteria that also consider the needs of atypical patient populations when establishing step therapy protocols. This means step therapy protocols are informed by science, rather than budget concerns.
  • Allows for specific situations in which step therapy may be overridden, including if the medication is contraindicated, is expected to be ineffective, if the patient has already taken the drug without benefit, or if the patient is stable on another medication. This means you do not have to go through step therapy if it would cause you harm.
  • Provides a standardized appeal process that can be used by a patient’s physician or another prescriber to request a step therapy override, or exception, if they believe the drug(s) being required by the health insurer is not in the best interest of the patient. This means your doctor can advocate for you to get the care you were prescribed.
  • Requires health insurers to utilize recognized evidence-based and peer-reviewed clinical review criteria appropriate for the patient and their medical condition when reviewing a step therapy override request. This means insurers must consider what is best for your health, rather than benefits covered.

TDI’s informal rule proposals, proposed and adopted rules are posted here: http://www.tdi.texas.gov/rules/index.html.

5) How does the improved review process work under the new law?

The utilization review (appeal) process in the law states that a health insurer (utilization review agent) shall grant a step therapy protocol override upon receipt of information that includes supporting rationale and documentation from a health care provider which demonstrates that the drug(s) being required by the health insurer:*

  • Is contraindicated or is likely to cause an adverse reaction by physical or mental harm to the patient;
  • Is expected to be ineffective based on the known clinical history and conditions of the patient and his/her drug regimen;
  • Has been tried by the patient or another prescription drug(s) in the same pharmacologic class or with the same mechanism of action and such drug(s) was discontinued due to a lack of efficacy or effectiveness, diminished effect or an adverse event;
  • Should not be required because the patient is stable on a drug other than the drug being required by the insurer; or
  • Is not in the best interest of the patient because it will likely cause a significant barrier to a patient’s adherence with his/her plan of care, will likely worsen a comorbid condition of a the patient, or will likely decrease the patient’s ability to achieve or maintain reasonable functional ability in performing daily activities.

If your care provider can show proof that step therapy will harm you, an insurer must approve your request to bypass step therapy protocols.

*The standards included in the new law for the process listed above do not prevent a health insurer from requiring a patient to try an AB-rated generic equivalent drug before authorizing coverage for the equivalent brand-name prescription drug being ordered by a prescriber.

6) What are the timeframes included in the new law related to the utilization review (appeals) process?

  • Health insurers must respond to utilization review requests within 72 hours, or within 24 hours for emergencies.
  • An emergency is defined as a medical condition that places the health of the insured patient in serious jeopardy without the prescription drug or drugs prescribed by the patient’s health care provider.
  • Importantly, upon a determination that the step therapy protocol should be overridden, the health plan shall authorize immediate coverage for the medication prescribed by the patient’s healthcare provider.

7) What if health insurers do not respond to the utilization review request within the required timeframes detailed above?

If the insurer fails to respond within the required time frames, the appeal (override) of the required step therapy protocol will be granted in favor of the patient.

8) What if a patient’s utilization review request is denied?

If a patient (or a healthcare provider on his/her behalf) receives a denial to a step therapy protocol override request, he/she has the right to appeal the determination under Subchapters H and I, Chapter 4201 of the Insurance Code.

Click here to learn more about this process

9) What is the effective date of the new law?

The new law will take effect on September 1, 2018. It applies to health insurance plans delivered, issued for delivery, or renewed after that date.

10) Who implements the new law?

Under the new law, the Insurance Commissioner of Texas is authorized to promulgate any rules or regulations necessary for the timely implementation of the law.

Click here to e-mail the Insurance Commissioner’s office

11) Where can patients and providers go to learn more, or file complaints related to this new law?

To learn more, or file complaints, visit the Texas Department of Insurance Consumer Protections department website (see below link).

Be sure to carefully read directions for how to submit a complaint and submit any relevant documentation along with your complaint (e.g., adverse determination letter, forms for independent review requests, etc.)

12) Where can patients and providers go to file complaints related to health insurance companies not being compliant with state laws?

For Medicare: https://www.medicare.gov/

For Texans with disabilities: http://www.tdi.texas.gov/pubs/consumer/cb039.html

For managed care plans: http://www.tdi.texas.gov/pubs/consumer/cb069.html

To Stay Connected to TDI, sign up at: https://public.govdelivery.com/accounts/TXINSUR/subscriber/new?qsp=CODE_RED


For information about health insurance in Texas in general: http://www.texashealthoptions.com/index.html