House File 375
HOUSE FILE
BY OSTERHAUS
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to the establishment of a senior pharmaceutical
2 assistance program and making an appropriation.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
4 TLSB 1694YH 80
5 pf/pj/5
PAG LIN
1 1 Section 1. NEW SECTION. 155B.1 IOWA SENIOR
1 2 PHARMACEUTICAL CARE PROGRAM ESTABLISHED.
1 3 The Iowa senior pharmaceutical care program is established
1 4 to provide a comprehensive pharmacy benefits plan for Iowa's
1 5 Medicare=eligible population.
1 6 Sec. 2. NEW SECTION. 155B.2 DEFINITIONS.
1 7 As used in this chapter, unless the context otherwise
1 8 indicates:
1 9 1. "Brand name" means brand name as defined in section
1 10 155A.3.
1 11 2. "Department" means the Iowa department of public
1 12 health.
1 13 3. "Federal poverty level" means the federal poverty level
1 14 as defined by the most recently revised poverty income
1 15 guidelines published by the United States department of health
1 16 and human services.
1 17 4. "Generic name" means generic name as defined in section
1 18 155A.3.
1 19 5. "Iowa senior pharmaceutical care program" or "program"
1 20 means the Iowa senior pharmaceutical care program created in
1 21 section 155B.1.
1 22 6. "Medical assistance" means medical assistance as
1 23 defined in section 249A.2
1 24 7. "Medicare" means the federal Medicare program
1 25 established by Title XVIII of the federal Social Security Act.
1 26 8. "Prescription drug" means a prescription drug as
1 27 defined in section 155A.3 that is included in coverage under
1 28 the medical assistance program and that is manufactured by a
1 29 drug manufacturer that enters into a rebate agreement under
1 30 this chapter.
1 31 9. "Prescription drug manufacturer" means a producer of a
1 32 prescription drug product that is made available for
1 33 distribution to consumers through licensed pharmacies in the
1 34 state.
1 35 10. "Prescription drug order" means prescription drug
2 1 order as defined in section 155A.3.
2 2 11. "Program payment rate" means the maximum rate of
2 3 payment allowed to participating pharmacies under the program,
2 4 established as the lower of either the pharmacy's usual and
2 5 customary charge or the average wholesale price minus ten
2 6 percent plus a dispensing fee which dispensing fee represents
2 7 the seventy=fifth percentile of dispensing fee charges by Iowa
2 8 pharmacists to private=paying patients.
2 9 Sec. 3. NEW SECTION. 155B.3 PROGRAM ELIGIBILITY ==
2 10 BENEFIT LEVELS == APPLICATION.
2 11 1. An individual may participate in the Iowa senior
2 12 pharmaceutical care program if the individual meets all of the
2 13 following criteria:
2 14 a. Is a resident of this state.
2 15 b. Is at least sixty=five years of age.
2 16 c. Is not a recipient of medical assistance or, as a
2 17 recipient, does not receive prescription drug coverage.
2 18 d. Does not have third=party coverage of prescription
2 19 drugs.
2 20 e. Pays the program enrollment fee, deductible, and
2 21 copayment amount specified in this section, as applicable.
2 22 2. Program participants shall pay all of the following:
2 23 a. For each twelve=month benefit period, a program
2 24 enrollment fee of twenty dollars.
2 25 b. (1) For an individual whose income is below one
2 26 hundred sixty percent of the federal poverty level, a
2 27 copayment of twenty dollars for each brand name prescription
2 28 drug and a copayment of five dollars for each generic name
2 29 prescription drug.
2 30 (2) For an individual whose income is between one hundred
2 31 sixty percent and two hundred forty percent of the federal
2 32 poverty level, a deductible for prescription drugs of five
2 33 hundred dollars for each twelve=month benefit period, and
2 34 following payment of the deductible amount, a copayment of
2 35 twenty dollars for each brand name prescription drug and a
3 1 copayment of five dollars for each generic name prescription
3 2 drug.
3 3 (3) For an individual whose income is above two hundred
3 4 forty percent of the federal poverty level, a deductible for
3 5 prescription drugs of one thousand dollars for each twelve=
3 6 month benefit period, and following payment of the deductible
3 7 amount, a copayment of twenty dollars for each brand name
3 8 prescription drug and a copayment of five dollars for each
3 9 generic prescription drug.
3 10 3. The department shall develop and distribute a form for
3 11 application for the program, shall determine eligibility of
3 12 applicants for each twelve=month period, and shall issue to
3 13 program participants a prescription drug card for use in
3 14 purchasing prescription drugs.
3 15 Sec. 4. NEW SECTION. 155B.4 CALCULATION OF CHARGES TO
3 16 PROGRAM PARTICIPANTS == PAYMENTS TO PHARMACISTS == REBATES ==
3 17 PROGRAM ADMINISTRATION.
3 18 1. Beginning October 1, 2003, as a condition of
3 19 participation by a pharmacy or pharmacist in the medical
3 20 assistance program, the pharmacy or pharmacist shall not
3 21 charge an individual who presents a valid prescription drug
3 22 order and an Iowa senior pharmaceutical care program card in
3 23 excess of the following, as applicable:
3 24 a. For an individual whose income is below one hundred
3 25 sixty percent of the federal poverty level, the applicable
3 26 copayment.
3 27 b. For an individual whose income is between one hundred
3 28 sixty percent and two hundred forty percent of the federal
3 29 poverty level, payment of the program payment rate prior to
3 30 reaching the five hundred dollar deductible amount. Once the
3 31 five hundred dollar deductible amount is reached, such an
3 32 individual shall not be charged in excess of the applicable
3 33 copayment.
3 34 c. For an individual whose income is above two hundred
3 35 forty percent of the federal poverty level, payment of the
4 1 retail price prior to reaching the one thousand dollar
4 2 deductible amount. Once the one thousand dollar deductible
4 3 amount is reached, such an individual shall not be charged in
4 4 excess of the applicable copayment.
4 5 2. The department shall calculate and transmit to
4 6 pharmacies and pharmacists that are certified providers of
4 7 medical assistance the amounts that may be used in calculating
4 8 charges under subsection 1. The department shall periodically
4 9 update this information and transmit the updated amounts to
4 10 pharmacies and pharmacists.
4 11 3. The department shall, under a schedule that is
4 12 identical to that used by the department for payment of
4 13 pharmacy provider claims under the medical assistance program,
4 14 provide to pharmacies and pharmacists payments for
4 15 prescription drugs sold by the pharmacies or pharmacists to
4 16 participants in the program. The department shall develop and
4 17 distribute a claim form for use by pharmacies and pharmacists
4 18 under this subsection and may limit payment under this
4 19 subsection to those prescription drugs for which payment
4 20 claims are submitted by pharmacists or pharmacies directly to
4 21 the department.
4 22 4. Pharmacists shall be reimbursed for each prescription
4 23 drug sold to a program participant at the program payment
4 24 rate, minus any copayment paid by the individual. In order to
4 25 determine the dispensing fee paid under the program payment
4 26 rate, the university of Iowa college of pharmacy, department
4 27 of pharmaceutical socioeconomics, shall conduct a survey to
4 28 determine the seventy=fifth percentile level of dispensing fee
4 29 charges by Iowa pharmacists to private=paying patients on an
4 30 annual basis.
4 31 5. To ensure appropriate use of pharmaceuticals, the
4 32 program shall reimburse pharmacists for medication therapy
4 33 management services. The reimbursement system shall include
4 34 coverage for both pharmaceutical case management services and
4 35 event=based services as defined by rule of the department.
5 1 The department may adopt rules for the program that are the
5 2 same as the utilization and cost control procedures that apply
5 3 under the medical assistance program.
5 4 6. The department shall provide to a prescription drug
5 5 manufacturer that sells prescription drugs for use in this
5 6 state documents designed for use by the prescription drug
5 7 manufacturer in entering into a rebate agreement with the
5 8 department that is modeled on the rebate agreement specified
5 9 under 42 U.S.C. } 1396r=8. A rebate agreement under this
5 10 subsection shall include all of the following:
5 11 a. The prescription drug manufacturer shall make rebate
5 12 payments for each prescription drug of the manufacturer that
5 13 is prescribed for and purchased by individuals who meet
5 14 program criteria.
5 15 b. The rebate amount shall be determined by a method
5 16 specified in 42 U.S.C. } 1396r=8.
5 17 7. The department shall establish an advisory council to
5 18 provide advice regarding program policies and directions. The
5 19 director shall appoint to the advisory council three
5 20 practicing pharmacists, three practicing physicians, one
5 21 representative of the university of Iowa college of public
5 22 health, one representative of the university of Iowa college
5 23 of medicine, one representative of the university of Iowa
5 24 college of pharmacy, and three members of the public who are
5 25 representative of individuals sixty=five years of age or
5 26 older.
5 27 8. The department, in consultation with the department of
5 28 human services, shall include in the contract for the Medicaid
5 29 drug utilization review commission a directive that the
5 30 commission develop and implement utilization and cost control
5 31 strategies. Cost=containment and quality assurance services
5 32 shall include but are not limited to formulary development,
5 33 utilization review and management, and provider and patient
5 34 education. Additionally, the commission shall manage the
5 35 rebate negotiation and collection processes under this
6 1 chapter.
6 2 10. The department shall monitor compliance by pharmacies
6 3 and pharmacists that are certified providers of medical
6 4 assistance with the requirements of this section and shall
6 5 annually submit a report to the general assembly and the
6 6 governor regarding compliance. The report shall include
6 7 information on any pharmacies or pharmacists that discontinue
6 8 participation as certified providers of medical assistance and
6 9 the reasons provided for the discontinuance.
6 10 11. The department shall adopt rules to implement and
6 11 administer this chapter. The department may contract with
6 12 outside entities to administer the program including but not
6 13 limited to contracting for rebate negotiation and collection
6 14 processes, and pharmacy claims administration to provide for
6 15 electronic, point=of=service claims adjudication.
6 16 Sec. 5. NEW SECTION. 155B.5 IOWA SENIOR PHARMACEUTICAL
6 17 CARE PROGRAM FUND.
6 18 There is created in the state treasury an Iowa senior
6 19 pharmaceutical care program fund under the authority of the
6 20 Iowa department of public health. Program enrollment fees and
6 21 any other moneys appropriated to or collected by the program
6 22 shall be deposited in the fund and are appropriated to the
6 23 department to carry out the purposes and requirements of this
6 24 chapter. Amounts deposited in the fund shall not be
6 25 transferred, used, obligated, appropriated, or otherwise
6 26 encumbered except as provided in this chapter.
6 27 Notwithstanding section 8.33, any unexpended balance in the
6 28 fund at the end of the fiscal year shall be retained in the
6 29 fund. Notwithstanding section 12C.7, subsection 2, interest
6 30 or earnings on moneys deposited into the fund shall be
6 31 credited to the fund. Amounts deposited in the fund that
6 32 remain unexpended or unencumbered at the close of the fiscal
6 33 year shall remain in the fund for utilization as provided in
6 34 this section for the following fiscal year.
6 35 EXPLANATION
7 1 This bill establishes an Iowa senior pharmaceutical care
7 2 program to provide coverage for prescription drugs for
7 3 individuals 65 years of age or older who meet certain other
7 4 program criteria. The prescription drugs for which coverage
7 5 is provided under the program are prescription drugs covered
7 6 under the medical assistance program for which a prescription
7 7 drug manufacturer has entered a rebate agreement with the Iowa
7 8 department of public health. The bill provides that as a
7 9 condition of participation in the medical assistance program,
7 10 a pharmacy or pharmacist must participate in the Iowa senior
7 11 pharmaceutical care program.
7 12 Under the program, eligible individuals would pay an annual
7 13 program enrollment fee of $20, a copayment, and for those
7 14 individuals with incomes of 160 percent of the federal poverty
7 15 level and above, an annual deductible amount based on income.
7 16 The bill directs the Iowa department of public health to
7 17 develop and distribute a form for application for the program,
7 18 determine eligibility of applicants, and issue prescription
7 19 drug cards for use in purchasing prescription drugs under the
7 20 program.
7 21 The bill provides for the calculation of charges to program
7 22 participants by participating pharmacies and pharmacists and
7 23 directs the department to calculate and transmit to pharmacies
7 24 and pharmacists the amounts to be used in calculating the
7 25 charges. The bill provides for payment of participating
7 26 pharmacies and pharmacists based on a program payment rate,
7 27 minus any copayment paid by the participant. The program also
7 28 provides for reimbursement to pharmacists for medication
7 29 therapy management services. The bill also authorizes the
7 30 department to adopt rules for the program that are the same as
7 31 the utilization and cost control procedures that apply under
7 32 the medical assistance program.
7 33 The bill directs the department to provide to a
7 34 prescription drug manufacturer that sells prescription drugs
7 35 for use in this state documents designed for use by the
8 1 manufacturer in entering into a rebate agreement with the
8 2 department that is modeled on the rebate agreement specified
8 3 under federal law. The rebate agreement is to include that
8 4 the manufacturer make rebate payments for each prescription
8 5 drug of the manufacturer that is prescribed for and purchased
8 6 by individuals who meet program criteria and that the rebate
8 7 amount shall be determined by a method specified in federal
8 8 law.
8 9 The bill directs the department to establish an advisory
8 10 council to provide advice regarding program policies and
8 11 directions. The bill also directs the department to include
8 12 in the contract for the Medicaid drug utilization review
8 13 commission a directive that the commission develop and
8 14 implement utilization and cost control strategies. Cost=
8 15 containment and quality assurance services are to include
8 16 formulary development, utilization review and management, and
8 17 provider and patient education.
8 18 The bill directs the department to monitor compliance by
8 19 pharmacies and pharmacists with the requirements of the bill
8 20 and to submit an annual report to the general assembly and the
8 21 governor regarding compliance. The bill directs the
8 22 department to adopt rules to implement and administer the
8 23 bill.
8 24 The bill creates in the state treasury an Iowa senior
8 25 pharmaceutical care program fund under the authority of the
8 26 department. Program enrollment fees and any other moneys
8 27 appropriated to or collected by the program are to be
8 28 deposited in the fund and are appropriated to the department
8 29 to carry out the purposes and requirements of the bill.
8 30 LSB 1694YH 80
8 31 pf/pj/5.1