HEALTH ALLIANCE ORDERED TO STOP UNAPPROVED FORMULARY

Springfield, IL - Acting Director of Insurance Arnold Dutcher today ordered Health Alliance Medical Plans, Inc. to cease its use of an unapproved prescription drug formulary and cited the Urbana-based health maintenance organization for failure to file its new pharmaceutical administrative agreement with the Department of Insurance.

Health Alliance contracted with PCS Health Systems on August 1, 1998, to provide pharmaceutical services, but neglected to file the administrative agreement as required by Illinois insurance regulations. Further, the formulary used by PCS under the unapproved agreement has not been accepted by the Illinois Department of Public Health and appears to be in noncompliance with the Illinois Formulary and the Illinois Food, Drug and Cosmetic Act.

Dutcher said the outpatient drug formulary discrepancies pertain to generic drug substitutions which are not therapeutically equivalent and may not have the same clinical effect and safety profile as the prescribed product. "An unapproved formulary could be potentially harmful to Health Alliance enrollees," Dutcher said. "Health Alliance will be fined $1,000 per day per offense (unapproved formulary and unapproved administrative agreement) until such time as the violations have been remedied. We will also be requiring them to revert to an acceptable formulary until such time as the PCS formulary meets with Public Health's approval."