Section 1342.7.
Cal. Health and Safety Code - HSC § 1342.7.
in effect(a)
The Legislature finds that in enacting Sections 1367.215, 1367.25, 1367.45, 1367.51, and 1374.72, it did not intend to limit the department’s authority to regulate the provision of medically necessary prescription drug benefits by a health care service plan to the extent that the plan provides coverage for those benefits.
(b)
(1)
Nothing in this chapter shall preclude a plan from filing relevant information with the department pursuant to Section 1352 to seek the approval of a copayment, deductible, limitation, or exclusion to a plan’s prescription drug benefits. If the department approves an exclusion to a plan’s prescription drug benefits, the exclusion
shall not be subject to review through the independent medical review process pursuant to Section 1374.30 on the grounds of medical necessity. The department shall retain its role in assessing whether issues are related to coverage or medical necessity pursuant to paragraph (2) of subdivision (d) of Section 1374.30.
(2)
A plan seeking approval of a copayment or deductible may file an amendment pursuant to Section 1352.1. A plan seeking approval of a limitation or exclusion shall file a material modification pursuant to subdivision (b) of Section 1352.
(c)
Nothing in this chapter shall prohibit a plan from charging a subscriber or enrollee a copayment or deductible for a prescription drug benefit or from setting forth by contract, a limitation or an exclusion from, coverage of prescription drug benefits, if the copayment, deductible, limitation, or exclusion is reported to, and
found unobjectionable by, the director and disclosed to the subscriber or enrollee pursuant to the provisions of Section 1363.
(d)
The department in developing standards for the approval of a copayment, deductible, limitation, or exclusion to a plan’s prescription drug benefits, shall consider alternative benefit designs, including, but not limited to, the following:
(1)
Different out-of-pocket costs for consumers, including copayments and deductibles.
(2)
Different limitations, including caps on benefits.
(3)
Use of exclusions from coverage of prescription drugs to treat various conditions, including the effect of the exclusions on the plan’s ability to provide basic health care services, the amount of subscriber or enrollee premiums, and the amount of
out-of-pocket costs for an enrollee.
(4)
Different packages negotiated between purchasers and plans.
(5)
Different tiered pharmacy benefits, including the use of generic prescription drugs.
(6)
Current and past practices.
(e)
The department shall develop a regulation outlining the standards to be used in reviewing a plan’s request for approval of its proposed copayment, deductible, limitation, or exclusion on its prescription drug benefits.
(f)
Nothing in subdivision (b) or (c) shall permit a plan to limit prescription drug benefits provided in a manner that is inconsistent with Sections 1367.215, 1367.25, 1367.45, 1367.51, and 1374.72.
(g)
Nothing in this section shall be construed to require or authorize a plan that contracts with the State Department of Health Services to provide services to Medi-Cal beneficiaries or with the Managed Risk Medical Insurance Board to provide services to enrollees of the Healthy Families Program to provide coverage for prescription drugs that are not required pursuant to those programs or contracts, or to limit or exclude any prescription drugs that are required by those programs or contracts.
(h)
Nothing in this section shall be construed as prohibiting or otherwise affecting a plan contract that does not cover outpatient prescription drugs except for coverage for limited classes of prescription drugs because they are integral to treatments covered as basic health care services, including, but not limited to, immunosuppressives, in order to allow for transplants of bodily organs.
(i)
The department shall periodically review its regulations developed pursuant to this section.
(j)
This section shall become operative on January 2, 2003, and shall only apply to contracts issued, amended, or renewed on or after that date.
References
referencesCal. Health and Safety Code - HSC § 1367.215.
referencesCal. Health and Safety Code - HSC § 1352.
referencesCal. Health and Safety Code - HSC § 1374.30.
referencesCal. Health and Safety Code - HSC § 1352.1.
referencesCal. Health and Safety Code - HSC § 1363.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026