Act 111 Implementation FAQ

State of Vermont

For consumer assistance:

Department of Financial Regulation

[Banking]

888-568-4547

89 Main Street

[Insurance]

800-964- 1784

Montpelier, VT 05620-3101

[Securities]

877-550-3907

www.dfr.vermont.gov

Insurance Bulletin No. 234

Act 111 of 2024 Implementation Frequently Asked Questions

December 19, 2024

The purpose of this bulletin is to clarify the application of Act 111 of 2024 to health insurers,

health care providers, and consumers.

Part 1: Prior Authorization (Effective January 1, 2025).

A:

What health plans does Act 111’s prior authorization provisions apply to?

Under 18 V.S.A. § 9418(a)(8), health plan is defined broadly as “a health insurer, disability

insurer, health maintenance organization, medical or hospital service corporation, and, to the

extent permitted under federal law, any administrator of an insured or self-insured plan.” The

term “health plan” also includes plans that require their medical groups, independent practice

associations, or other independent contractors to pay claims for health care services.

Act 111 also applies to non-ERISA health plans in accordance with federal law (29 U.S.C.

§ 1002). Those plan types include health plans established and funded by employees, state and

local government health plans, publicly financed hospitals and educational institution plans,

and church plans. Examples include the Vermont State Employees Health Plan and Vermont

Education Health Initiative.

Act 111 does not apply to self-funded health plans established and maintained by private

employers, over which state regulation is preempted under the federal Employee Retirement

Income Security Act of 1974 (ERISA). ERISA health plans may, however, choose to voluntarily

comply with Act 111.

Act 111 does not apply to Medicare or Vermont Medicaid.

B:

How is prior authorization defined under Vermont law?

Under 18 V.S.A

elf-funded health plans established and maintained by private

employers, over which state regulation is preempted under the federal Employee Retirement

Income Security Act of 1974 (ERISA). ERISA health plans may, however, choose to voluntarily

comply with Act 111.

Act 111 does not apply to Medicare or Vermont Medicaid.

B:

How is prior authorization defined under Vermont law?

Under 18 V.S.A. § 9418(a)(15), prior authorization is defined broadly as “the process used by a

health plan to determine the medical necessity, medical appropriateness, or both, of otherwise

covered drugs, medical procedures, medical tests, and health care services.” Prior authorization

also includes preadmission review, pretreatment review, and utilization review.

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C:

How does Act 111 affect health plan prior authorization practices?

Act 111 adds a new subsection to Vermont’s prior authorization statute (18 V.S.A. § 9418b),

prohibiting health plans from imposing “any prior authorization requirement for any

admission, item, service, treatment, or procedure ordered by a primary care provider.”

This prohibition does not apply to prior authorization requirements for prescription drugs or

for an admission, item, service, treatment, or procedure that is provided out-of-network.

D:

Who qualifies as a “primary care provider” for purposes of Act 111?

Act 111 provides that (18 V.S.A. § 9418b(c)(1)(B)(2)), “primary care provider” has the same

meaning as is used by the Vermont Blueprint for Health (Blueprint).

Under 18 V.S.A. § 706(c)(1), the Blueprint makes payments to “medical home practices” for

attributed patients and to contribute to shared costs of community health teams. Blueprint

payments are made in addition to normal fee-for-service reimbursement or other payments

§ 9418b(c)(1)(B)(2)), “primary care provider” has the same

meaning as is used by the Vermont Blueprint for Health (Blueprint).

Under 18 V.S.A. § 706(c)(1), the Blueprint makes payments to “medical home practices” for

attributed patients and to contribute to shared costs of community health teams. Blueprint

payments are made in addition to normal fee-for-service reimbursement or other payments.

Section 4.5.1 of the Blueprint Manual defines “Patient-Centered Medical Homes” which receive

Blueprint payments as “primary care practice[s] that [have] completed the program eligibility

requirements outlined in this document including achieving official recognition based on

National Committee for Quality Assurance – Patient-Centered Medical Home (NCQA PCMH)

standards.”1

Appendix 3 of the Blueprint Manual, which establishes the common attribution algorithm for

commercial insurers, Medicaid, and Medicare, identifies Blueprint medical home practices by

the National Provider Identifiers (NPIs) of the individual providers associated with them. The

Blueprint maintains a roster of individual Blueprint providers by NPI, which is updated

monthly and provided to payers for purposes of facilitating Blueprint payments.

To align with the Blueprint and provide certainty as to the scope of Act 111, the Department

interprets “primary care provider” to correspond with the individual provider NPIs on the

Blueprint roster.

The Department anticipates that the Legislature will amend Act 111 during the 2025 legislative

session and encourages health plans to begin working to extend Act 111’s prior authorization

exemptions to all providers who contract and enroll as a primary care provider with the plan.

E:

How will providers know if Act 111 applies to a patient’s health plan?

The Department expects health plans to advise providers whether a patient has a health plan to

which Act 111 applies through Eligibility Benefit Inquiry and Response (270/271) transactions,

or other means readily accessible to providers

s to all providers who contract and enroll as a primary care provider with the plan.

E:

How will providers know if Act 111 applies to a patient’s health plan?

The Department expects health plans to advise providers whether a patient has a health plan to

which Act 111 applies through Eligibility Benefit Inquiry and Response (270/271) transactions,

or other means readily accessible to providers.

The Department encourages health plans to begin providing an indicator on member

identification cards that signifies whether the plan requires compliance with Act 111, in

addition to other state laws and rules.

1 Available at:

https://blueprintforhealth.vermont.gov/sites/bfh/files/doc_library/Blueprint%20Manual%20July

%202022_Updated.pdf.

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F:

What does it mean to “order” an admission, item, service, treatment, or

procedure?

Act 111 does not define the term “order.” The Department interprets this term consistent with

Centers for Medicare and Medicare Services (CMS) guidance,2 limiting applicability to

admissions and non-physician, items, services, treatments, or procedures within the ordering

provider’s scope of practice and licensure under state law, such as Durable Medical Equipment,

Prosthetics, Orthotics, and Supplies (DMEPOS), Clinical Laboratory Services, Imaging Services,

and Home Health Services.

Providers who have questions about whether an admission, item, service, treatment, or

procedure qualifies for Act 111’s prior authorization exemption should contact the health plan’s

customer service or provider relations department

e law, such as Durable Medical Equipment,

Prosthetics, Orthotics, and Supplies (DMEPOS), Clinical Laboratory Services, Imaging Services,

and Home Health Services.

Providers who have questions about whether an admission, item, service, treatment, or

procedure qualifies for Act 111’s prior authorization exemption should contact the health plan’s

customer service or provider relations department.

G:

How should billing providers bill claims exempt from prior authorization under Act

111?

Billing providers should enter the ordering provider’s NPI on the following claim lines to

indicate to health plans that a claim is exempt from prior authorization under Act 111:



Electronic Facility Claims (CMS UB-04): Line 78-79, or 80.



Electronic Claims (ASC X12N 837 format): Fields corresponding to CMS UB-04 Lines 78-

79, or 80.



Professional Services Claims (CMS 1500): Line 17.



Professional Electronic Claims (ASC X12N 837 format): Fields corresponding to CMS

1500 Lines 17 and/or 17b. Please refer to health plan for specific details.

Please refer to health plan for specific details.

Part 2: Payment Policies and Manuals (Effective January 1, 2025).

A:

What is the health plan notice requirement to providers for existing payment

policies, manuals, or changes to existing payment policies and manuals under Act 111?

Act 111 adds new subparagraph 18 V.S.A. § 9418c(a)(5), which requires health plans to give

contracted providers notice at least 60 days in advance of any “new policy or manual, or any

change to an existing policy or manual” if the plan uses those polices or manuals to augment its

contract with a provider

ent

policies, manuals, or changes to existing payment policies and manuals under Act 111?

Act 111 adds new subparagraph 18 V.S.A. § 9418c(a)(5), which requires health plans to give

contracted providers notice at least 60 days in advance of any “new policy or manual, or any

change to an existing policy or manual” if the plan uses those polices or manuals to augment its

contract with a provider.

Act 111 requires the notice to be conspicuously titled “Notice of Policy Change” and it must

include the following provisions:



A summary of the new policy, manual, or change;



An explanation of the policy, manual, or change;



The effective date of the policy, manual, or change; and

2 Available at: https://www.cms.gov/medicare/enrollment-renewal/providers-suppliers/chainownership-system-pecos/ordering-certifying.

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

Notice of the right to object in writing to the policy, manual, or change, including:

o The timeframe for submitting objections; and

o Information on where and how to send the objection.

Providers have 60 days after receiving the notice to object in writing. If a provider objects,

health plans have 30 days to respond. In the event of a dispute, Act 111 requires health plans to

work with the provider to achieve a “reasonable resolution” to the objection.

If the provider is unsatisfied with the proposed resolution, Act 111 reserves to the provider any

remedy available under the provider’s health plan contract or applicable law.

B:

Are health plans required to give providers 60-days’ notice for coding updates

required by federal law?

Under the Health Insurance Portability and Accountability Act (HIPAA), 42 U.S.C. § 1320d–2(c),

and its supporting regulations (45 C.F.R

isfied with the proposed resolution, Act 111 reserves to the provider any

remedy available under the provider’s health plan contract or applicable law.

B:

Are health plans required to give providers 60-days’ notice for coding updates

required by federal law?

Under the Health Insurance Portability and Accountability Act (HIPAA), 42 U.S.C. § 1320d–2(c),

and its supporting regulations (45 C.F.R. § 162, Subpart J), CMS and the American Medical

Association (AMA) release quarterly updates for new, updated, or terminated Current

Procedural Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS)

billing codes. Federal law requires health plans to make these changes effective on the first

month of the next calendar year quarter. CMS and the AMA also release new International

Classification of Diseases (ICD-10) on an annual basis, which are included in this process.

To the extent that federal law requires health plans to make coding or payment updates, Act 111

does not require 60-day advance notice to providers. The Department encourages health plans

to notice providers about coding or payment updates as soon as practicable.

Part 3: Claims Editing (Effective January 1, 2026).

A:

What is claims editing? How does Act 111 impact health plan claims editing

practices?

In general, “claims editing” refers to the process that health plans use to review submitted

claims for consistency with CMS and AMA medical coding guidelines.

Under 18 V.S.A

o notice providers about coding or payment updates as soon as practicable.

Part 3: Claims Editing (Effective January 1, 2026).

A:

What is claims editing? How does Act 111 impact health plan claims editing

practices?

In general, “claims editing” refers to the process that health plans use to review submitted

claims for consistency with CMS and AMA medical coding guidelines.

Under 18 V.S.A. § 9418(a)(6), “editing” is defined as:

a practice or procedure pursuant to which one or more adjustments are made to

Current

Procedural

Terminology

(CPT)

codes,

American

Society

of

Anesthesiologists’ (ASA) current procedural terminology, the American Dental

Association’s (ADA) current dental terminology, or Healthcare Common

Procedure Coding System (HCPCS) Level II codes included in a claim that result

in:

(A) payment being made based on some, but not all, of the codes originally billed

by a participating health care provider;

(B) payment being made based on different codes from those originally billed by

a participating health care provider;

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(C) payment for one or more of the codes included in the claim originally billed by

a participating health care provider being reduced by application of payer’s

editing software, such as multiple procedure logic software;

(D) payment for one or more of the codes being denied;

(E) a reduced payment as a result of services provided to an insured that are

claimed under more than one procedure code on the same service date; or

(F) any combination of the [above].

Health plan payment policies and manuals do not constitute edits or claims editing under

Vermont law.

Act 111 (18 V.S.A. § 9418a(b)) requires health plans to limit claims editing to the following

standards, processes, and guidelines.



The CMS National Correct Coding Initiative (NCCI) as in effect for Medicare for claims

for outpatient and professional services

y combination of the [above].

Health plan payment policies and manuals do not constitute edits or claims editing under

Vermont law.

Act 111 (18 V.S.A. § 9418a(b)) requires health plans to limit claims editing to the following

standards, processes, and guidelines.



The CMS National Correct Coding Initiative (NCCI) as in effect for Medicare for claims

for outpatient and professional services.



The CMS Medicare Code Editor as in effect for Medicare for facility claims.



Appropriate nationally recognized edit standards, guidelines, or conventions for

pharmacy claims.



Other appropriate nationally recognized edit standards, guidelines, or conventions

approved by the Department for any other claim.

B:

What if Medicare changes an applicable edit standard, process, or guideline?

Health plans are required to apply the relevant edit standards, processes, and guidelines from

NCCI or Medicare Code Editor in effect on the date the claim is submitted.

However, if Medicare changes an applicable edit standard, process, or guideline within 90 days

prior to the date the claim is submitted, Act 111 (18 V.S.A. § 9418a(b)(2)) allows health plan to

use the prior version of the edit standard, process, or guideline if it has not yet updated its

claims processing system.

C:

Can health plans use other claims editing standards?

Act 111 (18 V.S.A. § 9418a(c)), allows health plans to use other claims editing standards in

certain situations:



When use of other claims editing standards is necessary to comply with State or federal

laws, rules, regulations, or coverage mandates.



When use of other claims editing standards is more favorable to providers than the

NCCI or Medicare Code Editor.



To address new codes that are not yet incorporated into a health plan’s claims

processing system.

In each case, the applicable edit standards must be:



Developed with input from the provider community.

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e mandates.



When use of other claims editing standards is more favorable to providers than the

NCCI or Medicare Code Editor.



To address new codes that are not yet incorporated into a health plan’s claims

processing system.

In each case, the applicable edit standards must be:



Developed with input from the provider community.

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

Clearly supported by nationally recognized standards, guidelines, or conventions

approved by the Department.



Made available to providers on the health plan’s website and electronic

communications.

D:

When can health plans release new edits?

Not more than quarterly, to take effect on January 1, April 1, July 1, or October 1.

New edits must be filed with the Department prior to implementation. Health plans must also

give providers at least 30 days’ advance notice prior to implementation.

If Medicare changes an edit standard, process, or guideline, health plans must incorporate those

modifications into their next quarterly release of edits.

E:

Can health plans review submitted claims for correct coding prior to adjudication?

Under Act 111 (18 V.S.A. § 9418a(e)), health plans may not require providers to submit medical

record documentation to adjudicate a claim as part of a prepayment coding validation edit

review, unless it is targeted to a specific provider or provider group for the purposes of:



Evaluating “high-dollar” claims (The Department interprets “high-dollar claims” to

mean payable claims over $100,000—corresponding to the upper limit of Medicare’s

claims processing system).



Verifying complex financial arrangements.



Investigating member questions.



Conducting post-audit monitoring.



Addressing a reasonable belief of fraud, waste, or abuse.



Other circumstances determined by the Department

aims (The Department interprets “high-dollar claims” to

mean payable claims over $100,000—corresponding to the upper limit of Medicare’s

claims processing system).



Verifying complex financial arrangements.



Investigating member questions.



Conducting post-audit monitoring.



Addressing a reasonable belief of fraud, waste, or abuse.



Other circumstances determined by the Department.

F:

Does Act 111 prohibit health plans from denying claims during adjudication?

Act 111 does not prohibit health plans from denying a claim during adjudication if the health

plan determines that a billed item, service, treatment, or procedure is not medically necessary,

experimental or investigational, or otherwise excluded from coverage under the terms of its

subscriber contract with its member.

G:

Does Act 111 prohibit health plans from auditing paid claims?

Act 111 does not prohibit health plans from auditing paid claims after adjudication.

H:

Do Act 111’s limitations on claims editing and provider notice requirements apply

to providers outside of Vermont?

Act 111’s limitations on claims editing and provider notice requirements apply to “health care

providers” or “providers,” defined under 18 V.S.A. § 9418(a)(9) as “a person, partnership, or

corporation licensed, certified, or otherwise authorized by law to provide professional health

care services in this State…”

Therefore, Act 111’s limitations do not apply to providers that are not licensed, certified, or

otherwise authorized by law to provide health care services in Vermont.

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§ 9418(a)(9) as “a person, partnership, or

corporation licensed, certified, or otherwise authorized by law to provide professional health

care services in this State…”

Therefore, Act 111’s limitations do not apply to providers that are not licensed, certified, or

otherwise authorized by law to provide health care services in Vermont.

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Part 4: Step Therapy (Effective January 1, 2025).

A:

What is step therapy? How does Act 111 impact health plan step therapy

practices?

Under 8 V.S.A. § 4089i(i)(5), step therapy is defined as “protocols that establish the specific

sequence in which prescription drugs for a specific medical condition are to be prescribed.”

These practices do not need to be labeled as step therapy to be considered step therapy under

the statute.

Act 111 (8 V.S.A. § 4089i(e)(1)(B)), requires health plans to grant an exception to step therapy

protocols upon request if any of the following conditions apply:



The prescription drug required under the step-therapy protocol is contraindicated or

will likely cause an adverse reaction or physical or mental harm to the insured.



The prescription drug required under the step-therapy protocol is expected to be

ineffective based on the insured’s known clinical history, condition, and prescription

drug regimen.



The insured has already tried the prescription drugs on the protocol, or other

prescription drugs in the same pharmacologic class or with the same mechanism of

action, which have been discontinued due to lack of efficacy or effectiveness, diminished

effect, or an adverse event, regardless of whether the insured was covered at the time by

a plan offered by the current insurer or its pharmacy benefit manager.



The insured is stable on a prescription drug selected by the insured’s treating health care

professional for the medical condition under consideration

which have been discontinued due to lack of efficacy or effectiveness, diminished

effect, or an adverse event, regardless of whether the insured was covered at the time by

a plan offered by the current insurer or its pharmacy benefit manager.



The insured is stable on a prescription drug selected by the insured’s treating health care

professional for the medical condition under consideration. Or



The step-therapy protocol or a prescription drug required under the protocol is not in

the patient’s best interests because it will:

o Pose a barrier to adherence.

o Likely worsen a comorbid condition.

o Likely decrease the insured’s ability to achieve or maintain reasonable functional

ability.

B:

Which health plans does Act 111’s step therapy protocol override provisions apply

to?

Under Act 111 (8 V.S.A. § 4089i), the step therapy protocol override provisions apply to health

insurers as that term is defined in 18 V.S.A. § 9402:

any health insurance company, nonprofit hospital and medical service

corporation, managed care organizations, and, to the extent permitted under

federal law, any administrator of an insured, self-insured, or publicly funded

health care benefit plan offered by public and private entities.

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C:

How should health plans process step therapy protocol override determination

requests for covered prescription drugs)?

Act 111 (8 V.S.A. § 4089i(e)(1)(B)) requires health plans to process step therapy protocol

override requests using the same procedure as prior authorization requests under 18 V.S.A.

§ 9418b.

D:

If a health plan determines the insured's diagnosis does not warrant treatment

with any prescription drug, do Act 111 step therapy protocol override requirements

apply?

No, instead, Rule H-2009-03’s utilization review requirements will apply

s health plans to process step therapy protocol

override requests using the same procedure as prior authorization requests under 18 V.S.A.

§ 9418b.

D:

If a health plan determines the insured's diagnosis does not warrant treatment

with any prescription drug, do Act 111 step therapy protocol override requirements

apply?

No, instead, Rule H-2009-03’s utilization review requirements will apply.

To the extent that a health plan determines that treatment with a prescription drug is

experimental or investigational, that determination may be externally appealed under 8 V.S.A.

§ 4089f.

E:

If the health plan only reviews a prescription drug for medical necessity, do Act

111’s step therapy protocol override requirements apply?

No, instead, Rule H-2009-03’s utilization review requirements will apply.

To the extent that a health plan determines that treatment with a prescription drug is not

medically necessary that determination may be externally appealed under 8 V.S.A. § 4089f.

F:

What is the timeframe for health plans to make a step therapy protocol override

determination under Act 111?

Act 111 (8 V.S.A. § 4089i(e)(1)(B)) requires health plans to make step therapy protocol override

determinations in the same timeframe as prior authorization determinations under 18 V.S.A.

§ 9418b(g)(4).

Under 18 V.S.A. § 9418b(g)(4), failure to render a determination with the required timeframe

will result in a deemed override.

G:

How should a health plan determine whether a request for a prescription drug is

urgent?

Under Rule H-2009-03, Section 3.2(B), the following requests are considered urgent:



Requests related to mental health and substance abuse conditions, unless the member or

treating provider informs the managed care organization that the request is not urgent.



Pharmacy benefit determinations, unless the member or treating provider informs the

managed care organization that the request is not urgent

e H-2009-03, Section 3.2(B), the following requests are considered urgent:



Requests related to mental health and substance abuse conditions, unless the member or

treating provider informs the managed care organization that the request is not urgent.



Pharmacy benefit determinations, unless the member or treating provider informs the

managed care organization that the request is not urgent.



Requests related to whether use of a prescription drug for the treatment of cancer is

medically necessary or is an experimental or investigational use.



Requests designated as urgent by a member's health care provider or by the member.

H:

What supporting rationale and documentation must a provider submit for a step

therapy protocol override determination?

To support a step therapy protocol override determination, providers should submit supporting

rationale and documentation, such as clinical notes or laboratory results, which demonstrates

one of the following:

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

The required prescription drug(s) is contraindicated or will likely cause an adverse

reaction or physical or mental harm to the insured.



The required prescription drug(s) is expected to be ineffective based on the insured's

known clinical history, condition, and prescription drug regimen.



The insured has tried the required prescription drug(s) under his or her current or

previous health insurance coverage, or another prescription drug in the same

pharmacologic class or with the same mechanism of action, and that prescription drug

was discontinued due to lack of efficacy or effectiveness, diminished effect, or an

adverse event.



The insured is stable on a prescription drug(s) selected by his or her health care

professional for his or her medical condition

r

previous health insurance coverage, or another prescription drug in the same

pharmacologic class or with the same mechanism of action, and that prescription drug

was discontinued due to lack of efficacy or effectiveness, diminished effect, or an

adverse event.



The insured is stable on a prescription drug(s) selected by his or her health care

professional for his or her medical condition. Or



The required prescription drug(s) is not in the insured's best interest because it will

likely cause a significant barrier to the insured's adherence to or compliance with the

insured’s plan of care, will likely worsen a comorbid condition, or will likely decrease

the insured’s ability to achieve or maintain reasonable functional ability in performing

daily activities.

I:

Can health plans request additional documentation to support a step therapy

protocol override request?

Health plans may request additional documentation to support a step therapy protocol override

within the timeframes provided under 18 V.S.A. § 9418b(g)(4).

J:

What do health plans need to provide when a step therapy protocol override

request is decided?

Health plans deciding a step therapy protocol override request should comply with the

requirements for a Notice of Benefit Determination under Rule H-2009-03, Section 3.2(G).

K:

Does Act 111 prohibit health plans from conducting medical necessity reviews if

a prescription drug is recommended or prescribed by a provider?

Act 111 does not prohibit medical necessity reviews for prescription drugs recommended or

prescribed by a provider

col override request should comply with the

requirements for a Notice of Benefit Determination under Rule H-2009-03, Section 3.2(G).

K:

Does Act 111 prohibit health plans from conducting medical necessity reviews if

a prescription drug is recommended or prescribed by a provider?

Act 111 does not prohibit medical necessity reviews for prescription drugs recommended or

prescribed by a provider.

L:

How does Act 111 define the “same pharmacologic class or with the same

mechanism of action”?

Act 111 does not define the term “same pharmacologic class or with the same mechanism of

action.” The Department interprets “same pharmacologic class” to refer to drug classes within

nationally recognized drug classification systems such as the United States Pharmacopeia Drug

Classification System (USP DC), American Hospital Formulary Service (AHFS) Pharmacologic-

Therapeutic Classification System, or Medi-Span Generic Product Identifier (GPI), and

“mechanism of action” according to the manufacturer FDA-approved labeling.

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M:

If the insured does not comply with the plan of care for taking a prescription drug,

is it considered a “lack of efficacy” under Act 111?

A lack of efficacy is when a drug is no longer able to achieve the desired clinical response or

goal despite proper drug administration. Failure to take the prescription drug as directed does

not constitute a lack of efficacy.

N:

What criteria should health plans use to determine if an insured is “stable on a

prescription drug selected by the insured’s treating health care professional for the

medical condition under consideration”?

The Department encourages health plans to develop reasonable and uniform written criteria

based on sound clinical judgment (and evidence-based practice protocols, if available) for use in

determining whether an insured is “stable” for purposes of Act 111

s “stable on a

prescription drug selected by the insured’s treating health care professional for the

medical condition under consideration”?

The Department encourages health plans to develop reasonable and uniform written criteria

based on sound clinical judgment (and evidence-based practice protocols, if available) for use in

determining whether an insured is “stable” for purposes of Act 111. Criteria for determining the

insured’s stability on a requested prescription drug should take into consideration the following

factors:



The medical profile of the insured (e.g., age, condition severity, the presence of any

comorbidities, any concurrent medications, any history of adverse reactions, any history

of use of alternative drugs known to be clinically effective in treating the condition etc.);



The state of the insured’s condition under consideration, while on the requested

prescription drug;



The prescriber’s rationale for deeming an insured stable on the requested prescription

drug (i.e., how, why, and on what basis did the prescriber conclude that the insured is

stable on the requested prescription drug) and how such rationale aligns with standard

medical practice and/or evidence-based practice protocols for the treatment of the

insured’s condition.

O:

What criteria should health plans use to determine if a prescription drug is likely

to cause a significant barrier to the insured’s adherence to or compliance with the plan

of care, will likely worsen a comorbid condition of the insured, or will likely decrease the

insured’s ability to achieve or maintain reasonable functional ability in performing daily

activities?

Health plans are encouraged to develop reasonable and uniform written criteria based on

sound clinical judgment (and evidence-based practice protocols, if available) for use in

determining whether a prescription drug is likely to cause a significant barrier to the insured's

adherence to or compliance with the plan of care, will likely worsen a comorbid condition of the

rming daily

activities?

Health plans are encouraged to develop reasonable and uniform written criteria based on

sound clinical judgment (and evidence-based practice protocols, if available) for use in

determining whether a prescription drug is likely to cause a significant barrier to the insured's

adherence to or compliance with the plan of care, will likely worsen a comorbid condition of the

insured, or will likely decrease the insured's ability to achieve or maintain reasonable functional

ability in performing daily activities as provided for in Act 111.

These criteria should consider the insured's physical condition, mental health condition, and

intellectual ability in determining whether a drug is likely to cause a significant barrier to the

insured's adherence to or compliance with the plan of care.

Docusign Envelope ID: EFA02837-FC77-49F7-9DEF-6E9A0B87F6FF

Revised December 15, 2024

Page 11 of 11

P:

Do Act 111’s step therapy requirements apply to a health plan’s pharmacy and

medical benefits?

Act 111’s step therapy requirements apply to prescription drugs covered by a health plan

regardless of whether the prescription drug is considered a pharmacy benefit or a medical

benefit in the health insurance policy.

Inquiries about this Bulletin should be directed to Sebastian Arduengo, Director of Health

Insurance Regulation (Sebastian.Arduengo@vermont.gov).

____________________________________

Kevin Gaffney, Commissioner

____________________________________

Date

Docusign Envelope ID: EFA02837-FC77-49F7-9DEF-6E9A0B87F6FF

12/20/2024