(a)    (1)    In this section the following words have the meanings indicated.

(2)    “Authorized prescriber” has the meaning stated in § 12–101 of the Health Occupations Article.

(3)    “Formulary” means a list of prescription drugs or devices that are covered by an entity subject to this section.

(4)    (i)    “Member” means an individual entitled to health care benefits for prescription drugs or devices under a policy issued or delivered in the State by an entity subject to this section.

(ii)    “Member” includes a subscriber.

(b)    (1)    This section applies to:

(i)    insurers and nonprofit health service plans that provide coverage for prescription drugs and devices under individual, group, or blanket health insurance policies or contracts that are issued or delivered in the State; and

(ii)    health maintenance organizations that provide coverage for prescription drugs and devices under individual or group contracts that are issued or delivered in the State.

(2)    An insurer, nonprofit health service plan, or health maintenance organization that provides coverage for prescription drugs and devices through a pharmacy benefit manager is subject to the requirements of this section.

(3)    This section does not apply to a managed care organization as defined in § 15–101 of the Health – General Article.

(c)    Each entity subject to this section that limits its coverage of prescription drugs or devices to those in a formulary shall establish and implement a procedure by which a member may:

(1)    receive a prescription drug or device that is not in the entity’s formulary or has been removed from the entity’s formulary in accordance with this section; or

(2)    continue the same cost sharing requirements if the entity has moved the prescription drug or device to a higher deductible, copayment, or coinsurance tier.

(d)    The procedure shall provide for coverage for a prescription drug or device in accordance with subsection (c) of this section if, in the judgment of the authorized prescriber:

(1)    there is no equivalent prescription drug or device in the entity’s formulary in a lower tier;

(2)    an equivalent prescription drug or device in the entity’s formulary in a lower tier:

(i)    has been ineffective in treating the disease or condition of the member; or

(ii)    has caused or is likely to cause an adverse reaction or other harm to the member; or

(3)    for a contraceptive prescription drug or device, the prescription drug or device that is not on the formulary is medically necessary for the member to adhere to the appropriate use of the prescription drug or device.

(e)    A decision by an entity subject to this section not to provide access to or coverage of a prescription drug or device in accordance with this section constitutes an adverse decision as defined under Subtitle 10A of this title if the decision is based on a finding that the proposed drug or device is not medically necessary, appropriate, or efficient.

(f)    An entity subject to this section that removes a drug from its formulary or moves a prescription drug or device to a benefit tier that requires a member to pay a higher deductible, copayment, or coinsurance amount for the prescription drug or device shall provide a member who is currently on the prescription drug or device and the member’s health care provider with:

(1)    notice of the change at least 30 days before the change is implemented; and

(2)    in the notice required under item (1) of this subsection, the process for requesting an exemption through the procedure adopted in accordance with this section.