Sec. 1. (a) A health maintenance organization may apply a formulary to the prescription drug and devices benefits provided by the health maintenance organization if the formulary is developed, reviewed, and updated:

(1) in consultation with; and

(2) with the approval of;

a pharmacy and therapeutics committee, a majority of whose members are licensed physicians.

(b) If a health maintenance organization maintains one (1) or more drug and devices formularies, the health maintenance organization shall do the following:

(1) Disseminate to participating providers and pharmacists the complete drug and devices formulary or formularies maintained by the health maintenance organization, including a list of the devices and prescription drugs on the formulary by major therapeutic category that specifies whether a particular drug or device is preferred over other drugs or devices.

(2) Establish and maintain an expeditious process or procedure that allows an enrollee to obtain, without penalty or additional cost sharing beyond that provided for in the enrollee's covered benefits with the health maintenance organization, coverage for a specific, medically necessary and appropriate nonformulary drug or device without prior approval from the health maintenance organization.

(c) A health maintenance organization may not:

(1) void a contract; or

(2) refuse to renew a contract;

between the health maintenance organization and a prescribing provider because the prescribing provider has prescribed a medically necessary and appropriate nonformulary drug or device as provided in subsection (b)(2).

As added by P.L.69-1998, SEC.16.