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HF 1269

as introduced - 90th Legislature (2017 - 2018) Posted on 02/15/2017 11:45am

KEY: stricken = removed, old language.
underscored = added, new language.
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A bill for an act
relating to human services; requiring the commissioner of human services to
develop a process to identify and report 340B drugs; establishing an alternative
payment methodology for federally qualified health centers and rural health clinics;
clarifying allowable costs for change of scope of services; permitting federally
qualified health centers to submit claims for payment directly to the commissioner
of human services; amending Minnesota Statutes 2016, section 256B.0625,
subdivisions 13, 30.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2016, section 256B.0625, subdivision 13, is amended to
read:


Subd. 13.

Drugs.

(a) Medical assistance covers drugs, except for fertility drugs when
specifically used to enhance fertility, if prescribed by a licensed practitioner and dispensed
by a licensed pharmacist, by a physician enrolled in the medical assistance program as a
dispensing physician, or by a physician, physician assistant, or a nurse practitioner employed
by or under contract with a community health board as defined in section 145A.02,
subdivision 5
, for the purposes of communicable disease control.

(b) The dispensed quantity of a prescription drug must not exceed a 34-day supply,
unless authorized by the commissioner.

(c) For the purpose of this subdivision and subdivision 13d, an "active pharmaceutical
ingredient" is defined as a substance that is represented for use in a drug and when used in
the manufacturing, processing, or packaging of a drug becomes an active ingredient of the
drug product. An "excipient" is defined as an inert substance used as a diluent or vehicle
for a drug. The commissioner shall establish a list of active pharmaceutical ingredients and
excipients which are included in the medical assistance formulary. Medical assistance covers
selected active pharmaceutical ingredients and excipients used in compounded prescriptions
when the compounded combination is specifically approved by the commissioner or when
a commercially available product:

(1) is not a therapeutic option for the patient;

(2) does not exist in the same combination of active ingredients in the same strengths
as the compounded prescription; and

(3) cannot be used in place of the active pharmaceutical ingredient in the compounded
prescription.

(d) Medical assistance covers the following over-the-counter drugs when prescribed by
a licensed practitioner or by a licensed pharmacist who meets standards established by the
commissioner, in consultation with the board of pharmacy: antacids, acetaminophen, family
planning products, aspirin, insulin, products for the treatment of lice, vitamins for adults
with documented vitamin deficiencies, vitamins for children under the age of seven and
pregnant or nursing women, and any other over-the-counter drug identified by the
commissioner, in consultation with the formulary committee, as necessary, appropriate, and
cost-effective for the treatment of certain specified chronic diseases, conditions, or disorders,
and this determination shall not be subject to the requirements of chapter 14. A pharmacist
may prescribe over-the-counter medications as provided under this paragraph for purposes
of receiving reimbursement under Medicaid. When prescribing over-the-counter drugs under
this paragraph, licensed pharmacists must consult with the recipient to determine necessity,
provide drug counseling, review drug therapy for potential adverse interactions, and make
referrals as needed to other health care professionals. Over-the-counter medications must
be dispensed in a quantity that is the lowest of: (1) the number of dosage units contained in
the manufacturer's original package; (2) the number of dosage units required to complete
the patient's course of therapy; or (3) if applicable, the number of dosage units dispensed
from a system using retrospective billing, as provided under subdivision 13e, paragraph
(b).

(e) Effective January 1, 2006, medical assistance shall not cover drugs that are coverable
under Medicare Part D as defined in the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, Public Law 108-173, section 1860D-2(e), for individuals eligible
for drug coverage as defined in the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, Public Law 108-173, section 1860D-1(a)(3)(A). For these
individuals, medical assistance may cover drugs from the drug classes listed in United States
Code, title 42, section 1396r-8(d)(2), subject to this subdivision and subdivisions 13a to
13g, except that drugs listed in United States Code, title 42, section 1396r-8(d)(2)(E), shall
not be covered.

(f) Medical assistance covers drugs acquired through the federal 340B Drug Pricing
Program and dispensed by 340B covered entities and ambulatory pharmacies under common
ownership of the 340B covered entity. Medical assistance does not cover drugs acquired
through the federal 340B Drug Pricing Program and dispensed by 340B contract pharmacies.

new text begin (g) Notwithstanding paragraph (f), effective January 1, 2018, medical assistance shall
cover drugs acquired through the federal 340B Drug Pricing Program and dispensed by a
340B contract pharmacy to a patient of a federally qualified health center as defined in
section 145.9269, subdivision 1.
new text end

Sec. 2.

Minnesota Statutes 2016, section 256B.0625, subdivision 30, is amended to read:


Subd. 30.

Other clinic services.

(a) Medical assistance covers rural health clinic services,
federally qualified health center services, nonprofit community health clinic services, and
public health clinic services. Rural health clinic services and federally qualified health center
services mean services defined in United States Code, title 42, section 1396d(a)(2)(B) and
(C). Payment for rural health clinic and federally qualified health center services shall be
made according to applicable federal law and regulation.

(b) A federally qualified health center new text begin(FQHC) new text endthat is beginning initial operation shall
submit an estimate of budgeted costs and visits for the initial reporting period in the form
and detail required by the commissioner. deleted text beginA federally qualified health centerdeleted text endnew text begin An FQHCnew text end that
is already in operation shall submit an initial report using actual costs and visits for the
initial reporting period. Within 90 days of the end of its reporting period, deleted text begina federally qualified
health center
deleted text endnew text begin an FQHCnew text end shall submit, in the form and detail required by the commissioner,
a report of its operations, including allowable costs actually incurred for the period and the
actual number of visits for services furnished during the period, and other information
required by the commissioner. deleted text beginFederally qualified health centersdeleted text endnew text begin FQHCsnew text end that file Medicare
cost reports shall provide the commissioner with a copy of the most recent Medicare cost
report filed with the Medicare program intermediary for the reporting year which support
the costs claimed on their cost report to the state.

(c) In order to continue cost-based payment under the medical assistance program
according to paragraphs (a) and (b), deleted text begina federally qualified health centerdeleted text endnew text begin an FQHCnew text end or rural
health clinic must apply for designation as an essential community provider within six
months of final adoption of rules by the Department of Health according to section 62Q.19,
subdivision 7
. For those deleted text beginfederally qualified health centersdeleted text endnew text begin FQHCsnew text end and rural health clinics
that have applied for essential community provider status within the six-month time
prescribed, medical assistance payments will continue to be made according to paragraphs
(a) and (b) for the first three years after application. For deleted text beginfederally qualified health centersdeleted text endnew text begin
FQHCs
new text end and rural health clinics that either do not apply within the time specified above or
who have had essential community provider status for three years, medical assistance
payments for health services provided by these entities shall be according to the same rates
and conditions applicable to the same service provided by health care providers that are not
deleted text begin federally qualified health centersdeleted text endnew text begin FQHCsnew text end or rural health clinics.

(d) Effective July 1, 1999, the provisions of paragraph (c) requiring deleted text begina federally qualified
health center
deleted text endnew text begin an FQHCnew text end or a rural health clinic to make application for an essential community
provider designation in order to have cost-based payments made according to paragraphs
(a) and (b) no longer apply.

(e) Effective January 1, 2000, payments made according to paragraphs (a) and (b) shall
be limited to the cost phase-out schedule of the Balanced Budget Act of 1997.

(f) Effective January 1, 2001, new text beginthrough December 31, 2018, new text endeach deleted text beginfederally qualified
health center
deleted text endnew text begin FQHCnew text end and rural health clinic may elect to be paid either under the prospective
payment system established in United States Code, title 42, section 1396a(aa), or under an
alternative payment methodology consistent with the requirements of United States Code,
title 42, section 1396a(aa), and approved by the Centers for Medicare and Medicaid Services.
The alternative payment methodology shall be 100 percent of cost as determined according
to Medicare cost principles.

new text begin (g) Effective January 1, 2019, each FQHC and rural health clinic shall elect to be paid
for the next fiscal year, beginning July 1, 2019, under the prospective payment system
described in paragraph (f), the alternative payment methodology described in paragraph (f),
or the alternative payment methodology described under paragraph (l).
new text end

deleted text begin (g)deleted text endnew text begin (h)new text end For purposes of this section, "nonprofit community clinic" is a clinic that:

(1) has nonprofit status as specified in chapter 317A;

(2) has tax exempt status as provided in Internal Revenue Code, section 501(c)(3);

(3) is established to provide health services to low-income population groups, uninsured,
high-risk and special needs populations, underserved and other special needs populations;

(4) employs professional staff at least one-half of which are familiar with the cultural
background of their clients;

(5) charges for services on a sliding fee scale designed to provide assistance to
low-income clients based on current poverty income guidelines and family size; and

(6) does not restrict access or services because of a client's financial limitations or public
assistance status and provides no-cost care as needed.

deleted text begin (h)deleted text endnew text begin (i)new text end Effective for services provided on or after January 1, 2015, all claims for payment
of clinic services provided by deleted text beginfederally qualified health centersdeleted text endnew text begin FQHCsnew text end and rural health
clinics shall be paid by the commissioner. new text beginEffective for services provided on or after January
1, 2015, through July 1, 2017,
new text endthe commissioner shall determine the most feasible method
for paying claims from the following options:

(1) deleted text beginfederally qualified health centersdeleted text endnew text begin FQHCsnew text end and rural health clinics submit claims
directly to the commissioner for payment, and the commissioner provides claims information
for recipients enrolled in a managed care or county-based purchasing plan to the plan, on
a regular basis; or

(2) deleted text beginfederally qualified health centersdeleted text endnew text begin FQHCsnew text end and rural health clinics submit claims for
recipients enrolled in a managed care or county-based purchasing plan to the plan, and those
claims are submitted by the plan to the commissioner for payment to the clinic.

new text begin Effective for services provided on or after July 1, 2017, FQHCs and rural health clinics
shall submit claims directly to the commissioner for payment and the commissioner shall
provide claims information for recipients enrolled in a managed care plan or county-based
purchasing plan to the plan on a regular basis to be determined by the commissioner.
new text end

deleted text begin (i)deleted text endnew text begin (j)new text end For clinic services provided prior to January 1, 2015, the commissioner shall
calculate and pay monthly the proposed managed care supplemental payments to clinics,
and clinics shall conduct a timely review of the payment calculation data in order to finalize
all supplemental payments in accordance with federal law. Any issues arising from a clinic's
review must be reported to the commissioner by January 1, 2017. Upon final agreement
between the commissioner and a clinic on issues identified under this subdivision, and in
accordance with United States Code, title 42, section 1396a(bb), no supplemental payments
for managed care plan or county-based purchasing plan claims for services provided prior
to January 1, 2015, shall be made after June 30, 2017. If the commissioner and clinics are
unable to resolve issues under this subdivision, the parties shall submit the dispute to the
arbitration process under section 14.57.

deleted text begin (j)deleted text endnew text begin (k)new text end The commissioner shall seek a federal waiver, authorized under section 1115 of
the Social Security Act, to obtain federal financial participation at the 100 percent federal
matching percentage available to facilities of the Indian Health Service or tribal organization
in accordance with section 1905(b) of the Social Security Act for expenditures made to
organizations dually certified under Title V of the Indian Health Care Improvement Act,
Public Law 94-437, and as a federally qualified health center under paragraph (a) that
provides services to American Indian and Alaskan Native individuals eligible for services
under this subdivision.

new text begin (l) All claims for payment of clinic services provided by FQHCs and rural health clinics
shall be paid by the commissioner according to the following requirements:
new text end

new text begin (1) each FQHC and rural health clinic must receive a single medical and a single dental
organization rate;
new text end

new text begin (2) the commissioner shall reimburse FQHCs and rural health clinics their allowable
costs, including direct patient care costs and patient-related support services. These costs
include but are not limited to the costs of:
new text end

new text begin (i) acquisition, implementation, and maintenance of electronic health records and patient
management systems;
new text end

new text begin (ii) community health workers who need acute and chronic care management;
new text end

new text begin (iii) care coordination;
new text end

new text begin (iv) the new FQHC or rural health clinic service that is not incorporated in the baseline
prospective payment system rate, or a deletion of an FQHC or rural health clinic service
that is incorporated in the baseline rate;
new text end

new text begin (v) a change in service due to amended regulatory requirements or rules;
new text end

new text begin (vi) a change in service resulting from relocating or remodeling an FQHC or rural health
clinic;
new text end

new text begin (vii) a change in types of services due to a change in applicable technology and medical
practice utilized by the center or clinic;
new text end

new text begin (viii) an increase in service intensity attributable to changes in the types of patients
served, including but not limited to populations with HIV or AIDS, mental health or chemical
dependency conditions, or other chronic diseases, or homeless, elderly, migrant, or other
special populations;
new text end

new text begin (ix) a change in the services described in United States Code, title 42, section
1396d(a)(2)(B) and (C), or in the provider mix of an FQHC or rural health clinic or one of
its sites;
new text end

new text begin (x) a change in operating costs attributable to capital expenditures associated with a
modification of the scope of the services described in United States Code, title 42, section
1396d(a)(2)(B) and (C), including new or expanded service facilities, regulatory compliance,
or changes in technology or medical practices at the center or clinic;
new text end

new text begin (xi) indirect medical education adjustments and a direct graduate medical education
payment that reflects the costs of providing teaching services to interns and residents; and
new text end

new text begin (xii) a change in the scope of a project approved by the federal Health Resources and
Service Administration;
new text end

new text begin (3) the base year payment rates for FQHCs and rural health clinics:
new text end

new text begin (i) must be determined using each FQHC's and rural health clinic's Medicare cost reports
from 2015 and 2016;
new text end

new text begin (ii) must be according to current Medicare cost principles as applicable to FQHCs and
rural health clinics without the application of productivity screens and upper payment limits
or the Medicare prospective payment system FQHC aggregate mean upper payment limit;
and
new text end

new text begin (iii) provide for a 90-day appeals process under section 14.57;
new text end

new text begin (4) the commissioner shall annually inflate the payment rates for FQHCs and rural health
clinics from the base year payment rate to the effective date by using the Bureau of Economic
Analysis' Personal Consumption Expenditures medical care inflator;
new text end

new text begin (5) FQHCs' and rural health clinics' payment rates shall be rebased by the commissioner
every two years and adjusted biannually by the Medicare Economic Index;
new text end

new text begin (6) the commissioner shall seek approval from the Centers for Medicare and Medicaid
Services to modify payments to FQHCs and rural health clinics according to subdivision
63;
new text end

new text begin (7) the commissioner shall reimburse FQHCs and rural health clinics an additional two
percent of their medical and dental rates established under this subdivision, only if the
payment of the two percent provider tax is required to be paid according to section 295.52;
new text end

new text begin (8) for FQHCs and rural health clinics seeking a change of scope of services:
new text end

new text begin (i) FQHCs and rural health clinics shall submit requests with the commissioner if the
change of scope would result in a 2-1/2 percent increase or decrease in the medical or dental
rate currently received by the FQHC or rural health clinic;
new text end

new text begin (ii) FQHCs and rural health clinics shall submit the request to the commissioner within
seven business days of submission of the scope change to the federal Health Resources
Services Administration;
new text end

new text begin (iii) the effective date of the payment change is the date the Health Resources Services
Administration approved the FQHC's or rural health clinic's change of scope request;
new text end

new text begin (iv) for change of scope requests that do not require Health Resources Services
Administration approval, the FQHC and rural health clinic shall submit the request to the
commissioner before implementing the change, and the effective date of the change is the
date the commissioner received the FQHC's or rural health clinic's request; and
new text end

new text begin (v) the commissioner shall provide a response to the FQHC's or rural health clinic's
request within 45 days of submission and provide a final approval within 120 days of
submission. This timeline may be waived at the mutual agreement of the commissioner and
the FQHC or rural health clinic if more information is needed to evaluate the request; and
new text end

new text begin (9) the commissioner shall establish a rate setting process for new FQHCs and rural
health clinics considering a comparison of patient caseload of FQHCs and rural health
clinics in a 60-mile radius for organizations established outside of the seven-county
metropolitan area and in a five-mile radius for organizations in the seven-county metropolitan
area. If a comparison is not feasible, the commissioner may use Medicare cost reports or
audited financial statements to establish base rate.
new text end

Sec. 3. new text beginENCOUNTER REPORTING OF 340B ELIGIBLE DRUGS.
new text end

new text begin (a) By January 1, 2018, the commissioner of human services, in consultation with
federally qualified health centers, managed care organizations, and contract pharmacies
shall develop a process to identify and report at point of sale the 340B drugs that are
dispensed to enrollees of managed care organizations who are patients of a federally qualified
health center to exclude these claims from the Medicaid drug rebate program. In developing
this process, the commissioner shall ensure that federally qualified health centers are allowed
to utilize the 340B Drug Pricing Program drug discounts if a federally qualified health center
utilizes a contract pharmacy for a patient enrolled in the prepaid medical assistance program
and ensure that duplicate discounts for drugs does not occur.
new text end

new text begin (b) By January 1, 2018, the commissioner shall notify the chairs and ranking minority
members of the house of representatives and senate committees with jurisdiction over
medical assistance when the process described in paragraph (a) was developed or, in the
alternative, report the reasons why the process was not developed.
new text end