ARTICLE 6.1. Medi-Cal Therapeutic Drug Utilization Review [14195. - 14196.]

Cal. Welfare and Institutions Code - WIC 6.1.

in effect

Cal. Welfare and Institutions Code - WIC § 14195. Section 14195.

It is the intent of the Legislature to provide medical assistance, including prescribed drugs, to the state’s eligible poor in a manner consistent with the provisions of the federal Medicaid Act, provided for under Title XIX of the Social Security Act (42 U.S.C. Sec. 1396 et seq.). It is the further intent of the Legislature to test the effectiveness of an open formulary drug therapy program. In order to help achieve this goal, the Legislature hereby establishes an open drug formulary under the Medi-Cal program wherein a beneficiary may receive the most appropriate, most effective, and most cost-efficient drug available for the treatment of his or her illness. It is also the intent of the Legislature in enacting this article to establish a drug utilization review system which will evaluate and enhance the therapeutic outcome of drugs prescribed for persons eligible for Medi-Cal pursuant to this chapter.

Cal. Welfare and Institutions Code - WIC § 14195.2. Section 14195.2.

The open drug formulary, as established pursuant to this article, shall be implemented in one pilot project site. The site shall be located in a northern California test area, comprised of Sacramento and Placer Counties which includes urban, suburban, and rural settings. This pilot project shall not be implemented until federal approval is secured and full federal financial participation is assured.

Cal. Welfare and Institutions Code - WIC § 14195.3. Section 14195.3.

(a) For purposes of the open drug formulary pilot project as established by this article, a provider may be reimbursed for any drug prescribed to a beneficiary if the drug is prescribed by a licensed provider within the scope of his or her practice, as defined by law, and if the drug is approved for use by the federal Food and Drug Administration. (b) Controlled substances shall be prescribed pursuant to the requirements of federal laws and regulations and the requirements set forth in Chapter 4 (commencing with Section 11150) of Division 10 of the Health and Safety Code. (c) For purposes of the open drug formulary pilot project as established by this article, there shall be no requirement that prior authorization be obtained by a provider before prescribing any drug to a beneficiary if the provider determines the drug to be a medical necessity in the treatment of the beneficiary. (d) For purposes of the open drug formulary pilot project as established by this article, a drug determined to be a medical necessity shall be one whose use in the treatment is reasonable and consistent with the objectives of the federal Medicaid Act as set forth in Title XIX of the Social Security Act (42 U.S.C. Sec. 1396 et seq.).

Cal. Welfare and Institutions Code - WIC § 14195.4. Section 14195.4.

A Medi-Cal Therapeutic Drug Utilization and Review Committee is hereby established. The committee shall be composed of 17 members who shall serve at the pleasure of the appointing powers as follows: (a) The Governor shall appoint two representatives from the State Department of Health Services, one representative from the Health and Welfare Agency, and two representatives from schools of pharmacy. (b) The Governor, the Speaker of the Assembly, and the Senate Rules Committee shall each appoint one representative from the following groups: (1) Licensed pharmacists. (2) Licensed physicians. (3) Drug manufacturers. (4) Medi-Cal beneficiaries.

Cal. Welfare and Institutions Code - WIC § 14195.5. Section 14195.5.

The Medi-Cal Therapeutic Drug Utilization and Review Committee shall set standards for evaluation of the therapeutic outcomes of prescribed drugs to be applied by an expert contractor to the department. The committee shall have the following responsibilities: (a) Developing policy for monitoring and controlling therapeutically inappropriate drug utilization. (b) Overseeing the establishment of a computer-based information system using the State Medicaid MMIS System, which shall provide timely information on drug prescription and consumption and shall be capable of tracking prescriptions by drug, by illness, by beneficiary, and by provider. The committee shall consult with expert contractors experienced in therapeutically oriented drug utilization review in the discharge of this responsibility. (c) Establishing standards, in consultation with an expert contractor experienced in the therapeutically oriented drug utilization review, for dosage, duration, and effectiveness of medications with respect to a particular diagnosis. (d) Setting standards to serve as guidelines on misprescribing, overprescribing, and contraindicated drug use, and protocols for informing prescribers of inappropriate prescribing.

Cal. Welfare and Institutions Code - WIC § 14195.6. Section 14195.6.

The department shall develop a request for a proposal, and may award a contract to an expert contractor to implement the standards and practices established by the Medi-Cal Therapeutic Drug Utilization Review System through use of a therapeutically oriented drug utilization review system by July 1, 1989. The contract shall include a requirement to analyze the therapeutic outcomes of the Medi-Cal Drug Program using the California MMIS for the period of July 1, 1987, through the date the standards established by this article are implemented. Thereafter, the contractor shall submit quarterly reports to the department and the Legislature analyzing therapeutic outcomes in a manner that will allow comparisons with the experience analyzed for the period of July 1, 1987, until implementation of the standards established by this article. The analysis shall include reports on at least the following items: (a) Compatibility of medication to diagnosis. (b) Overprescribing of drugs. (c) Prescription of contraindicated or incompatible drugs. (d) Number of days of drug-induced hospitalization and institutionalizati on in nursing facilities or all categories of intermediate care for the developmentally disabled occurring because of the factors specified in subdivisions (a) to (c), inclusive. (e) Number of days of drug-induced hospitalization and institutionalizati on in nursing facilities or any category of intermediate care facility for the developmentally disabled avoided due to changes in drug regimes which result from compliance by prescribers and beneficiaries with the standards established pursuant to this article. The department is authorized to require the contractor to phase in implementation of the prescriber notification, as established by protocols for informing prescribers of inappropriate prescribing.

Cal. Welfare and Institutions Code - WIC § 14195.7. Section 14195.7.

This article shall not apply to any service rendered by a provider in conjunction with any capitated rate or primary care case contract negotiated pursuant to this chapter or Chapter 8 (commencing with Section 14200) by either the department or the California Medical Assistance Commission unless both parties to the contract mutually agree that application of the standards established by this article would be beneficial to the Medi-Cal eligibles enrolled in plans operating pursuant to capitated rate contracts.

Cal. Welfare and Institutions Code - WIC § 14195.9. Section 14195.9.

In no case shall the director’s discretion under Section 14120 be exercised to reduce reimbursement to providers of pharmaceutical services because of increased costs in the drug component of the Medi-Cal program arising from the implementation of the open formulary concept.

Cal. Welfare and Institutions Code - WIC § 14196. Section 14196.

(a) The department shall adopt any regulations necessary to implement this article. These regulations shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and, for the purposes of the Administrative Procedure Act, shall be deemed an emergency, and necessary for the immediate preservation of the public peace, health and safety, or general welfare. (b) Any provision of this article which is in conflict with any federal statute or regulation shall be inapplicable to the extent of that conflict but the remainder of the provisions shall be in effect to the extent no conflict exists. The department shall seek all federal waivers necessary to implement this article. The provisions for which federal waivers cannot be obtained shall not be implemented, but provisions for which waivers are either obtained or found to be unnecessary shall be unaffected by the inability to obtain federal waivers for the other provisions. (c) The department shall seek maximum federal reimbursement for the MMIS-based Drug Establishment Review System established by this article.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026