(a)  Any nonprofit hospital-service corporation that utilizes a formulary of medications for which coverage is provided under an individual or group plan master contract shall require any physician or other person authorized by the department of health to prescribe medication to prescribe from the formulary. A physician or other person authorized by the department of health to prescribe medication shall be allowed to prescribe medications previously on, or not on, the nonprofit hospital-service corporation’s formulary if he or she believes that the prescription of the non-formulary medication is medically necessary. A nonprofit hospital-service corporation shall be required to provide coverage for a non-formulary medication only when the non-formulary medication meets the nonprofit hospital-service corporation’s medical-exception criteria for the coverage of that medication.

(b)  A nonprofit hospital-service corporation’s medical-exception criteria for the coverage of non-formulary medications shall be developed in accordance with § 23-17.13-3(c)(3) [repealed].

(c)  Any subscriber who is aggrieved by a denial of benefits to be provided under this section may appeal the denial in accordance with the rules and regulations promulgated by the department of health pursuant to chapter 17.12 of Title 23 [repealed].

(d)  Prior to removing a prescription drug from its plan’s formulary or making any change in the preferred or tiered cost-sharing status of a covered prescription drug, a nonprofit hospital-service corporation must provide at least thirty (30) days’ notice to authorized prescribers by established communication methods of policy and program updates and by updating available references on web-based publications. All adversely affected members must be provided at least thirty (30) days’ notice prior to the date such change becomes effective by a direct notification:

(i)  The written or electronic notice must contain the following information:

(A)  The name of the affected prescription drug;

(B)  Whether the plan is removing the prescription drug from the formulary, or changing its preferred or tiered, cost-sharing status; and

(C)  The means by which subscribers may obtain a coverage determination or medical exception, in the case of drugs that will require prior authorization or are formulary exclusions respectively.

(ii)  A nonprofit hospital-service corporation may immediately remove from its plan formularies covered prescription drugs deemed unsafe by the nonprofit hospital-service corporation or the Food and Drug Administration, or removed from the market by their manufacturer, without meeting the requirements of this section.