SF 535

1st Engrossment - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to human services; creating the prescription 
  1.3             drug rebate program; appropriating money; amending 
  1.4             Minnesota Statutes 2002, sections 8.31, subdivision 1; 
  1.5             256.01, subdivision 2; proposing coding for new law in 
  1.6             Minnesota Statutes, chapter 256.  
  1.7   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.8      Section 1.  Minnesota Statutes 2002, section 8.31, 
  1.9   subdivision 1, is amended to read: 
  1.10     Subdivision 1.  [INVESTIGATE OFFENSES AGAINST THE 
  1.11  PROVISIONS OF CERTAIN DESIGNATED SECTIONS; ASSIST IN 
  1.12  ENFORCEMENT.] The attorney general shall investigate violations 
  1.13  of the law of this state respecting unfair, discriminatory, and 
  1.14  other unlawful practices in business, commerce, or trade, and 
  1.15  specifically, but not exclusively, the Fair Drug Pricing Act 
  1.16  (section 256.954), the Nonprofit Corporation Act (sections 
  1.17  317A.001 to 317A.909), the Act Against Unfair Discrimination and 
  1.18  Competition (sections 325D.01 to 325D.07), the Unlawful Trade 
  1.19  Practices Act (sections 325D.09 to 325D.16), the Antitrust Act 
  1.20  (sections 325D.49 to 325D.66), section 325F.67 and other laws 
  1.21  against false or fraudulent advertising, the antidiscrimination 
  1.22  acts contained in section 325D.67, the act against 
  1.23  monopolization of food products (section 325D.68), the act 
  1.24  regulating telephone advertising services (section 325E.39), the 
  1.25  Prevention of Consumer Fraud Act (sections 325F.68 to 325F.70), 
  1.26  and chapter 53A regulating currency exchanges and assist in the 
  2.1   enforcement of those laws as in this section provided. 
  2.2      Sec. 2.  Minnesota Statutes 2002, section 256.01, 
  2.3   subdivision 2, is amended to read: 
  2.4      Subd. 2.  [SPECIFIC POWERS.] Subject to the provisions of 
  2.5   section 241.021, subdivision 2, the commissioner of human 
  2.6   services shall: 
  2.7      (1) Administer and supervise all forms of public assistance 
  2.8   provided for by state law and other welfare activities or 
  2.9   services as are vested in the commissioner.  Administration and 
  2.10  supervision of human services activities or services includes, 
  2.11  but is not limited to, assuring timely and accurate distribution 
  2.12  of benefits, completeness of service, and quality program 
  2.13  management.  In addition to administering and supervising human 
  2.14  services activities vested by law in the department, the 
  2.15  commissioner shall have the authority to: 
  2.16     (a) require county agency participation in training and 
  2.17  technical assistance programs to promote compliance with 
  2.18  statutes, rules, federal laws, regulations, and policies 
  2.19  governing human services; 
  2.20     (b) monitor, on an ongoing basis, the performance of county 
  2.21  agencies in the operation and administration of human services, 
  2.22  enforce compliance with statutes, rules, federal laws, 
  2.23  regulations, and policies governing welfare services and promote 
  2.24  excellence of administration and program operation; 
  2.25     (c) develop a quality control program or other monitoring 
  2.26  program to review county performance and accuracy of benefit 
  2.27  determinations; 
  2.28     (d) require county agencies to make an adjustment to the 
  2.29  public assistance benefits issued to any individual consistent 
  2.30  with federal law and regulation and state law and rule and to 
  2.31  issue or recover benefits as appropriate; 
  2.32     (e) delay or deny payment of all or part of the state and 
  2.33  federal share of benefits and administrative reimbursement 
  2.34  according to the procedures set forth in section 256.017; 
  2.35     (f) make contracts with and grants to public and private 
  2.36  agencies and organizations, both profit and nonprofit, and 
  3.1   individuals, using appropriated funds; and 
  3.2      (g) enter into contractual agreements with federally 
  3.3   recognized Indian tribes with a reservation in Minnesota to the 
  3.4   extent necessary for the tribe to operate a federally approved 
  3.5   family assistance program or any other program under the 
  3.6   supervision of the commissioner.  The commissioner shall consult 
  3.7   with the affected county or counties in the contractual 
  3.8   agreement negotiations, if the county or counties wish to be 
  3.9   included, in order to avoid the duplication of county and tribal 
  3.10  assistance program services.  The commissioner may establish 
  3.11  necessary accounts for the purposes of receiving and disbursing 
  3.12  funds as necessary for the operation of the programs. 
  3.13     (2) Inform county agencies, on a timely basis, of changes 
  3.14  in statute, rule, federal law, regulation, and policy necessary 
  3.15  to county agency administration of the programs. 
  3.16     (3) Administer and supervise all child welfare activities; 
  3.17  promote the enforcement of laws protecting handicapped, 
  3.18  dependent, neglected and delinquent children, and children born 
  3.19  to mothers who were not married to the children's fathers at the 
  3.20  times of the conception nor at the births of the children; 
  3.21  license and supervise child-caring and child-placing agencies 
  3.22  and institutions; supervise the care of children in boarding and 
  3.23  foster homes or in private institutions; and generally perform 
  3.24  all functions relating to the field of child welfare now vested 
  3.25  in the state board of control. 
  3.26     (4) Administer and supervise all noninstitutional service 
  3.27  to handicapped persons, including those who are visually 
  3.28  impaired, hearing impaired, or physically impaired or otherwise 
  3.29  handicapped.  The commissioner may provide and contract for the 
  3.30  care and treatment of qualified indigent children in facilities 
  3.31  other than those located and available at state hospitals when 
  3.32  it is not feasible to provide the service in state hospitals. 
  3.33     (5) Assist and actively cooperate with other departments, 
  3.34  agencies and institutions, local, state, and federal, by 
  3.35  performing services in conformity with the purposes of Laws 
  3.36  1939, chapter 431. 
  4.1      (6) Act as the agent of and cooperate with the federal 
  4.2   government in matters of mutual concern relative to and in 
  4.3   conformity with the provisions of Laws 1939, chapter 431, 
  4.4   including the administration of any federal funds granted to the 
  4.5   state to aid in the performance of any functions of the 
  4.6   commissioner as specified in Laws 1939, chapter 431, and 
  4.7   including the promulgation of rules making uniformly available 
  4.8   medical care benefits to all recipients of public assistance, at 
  4.9   such times as the federal government increases its participation 
  4.10  in assistance expenditures for medical care to recipients of 
  4.11  public assistance, the cost thereof to be borne in the same 
  4.12  proportion as are grants of aid to said recipients. 
  4.13     (7) Establish and maintain any administrative units 
  4.14  reasonably necessary for the performance of administrative 
  4.15  functions common to all divisions of the department. 
  4.16     (8) Act as designated guardian of both the estate and the 
  4.17  person of all the wards of the state of Minnesota, whether by 
  4.18  operation of law or by an order of court, without any further 
  4.19  act or proceeding whatever, except as to persons committed as 
  4.20  mentally retarded.  For children under the guardianship of the 
  4.21  commissioner whose interests would be best served by adoptive 
  4.22  placement, the commissioner may contract with a licensed 
  4.23  child-placing agency or a Minnesota tribal social services 
  4.24  agency to provide adoption services.  A contract with a licensed 
  4.25  child-placing agency must be designed to supplement existing 
  4.26  county efforts and may not replace existing county programs, 
  4.27  unless the replacement is agreed to by the county board and the 
  4.28  appropriate exclusive bargaining representative or the 
  4.29  commissioner has evidence that child placements of the county 
  4.30  continue to be substantially below that of other counties.  
  4.31  Funds encumbered and obligated under an agreement for a specific 
  4.32  child shall remain available until the terms of the agreement 
  4.33  are fulfilled or the agreement is terminated. 
  4.34     (9) Act as coordinating referral and informational center 
  4.35  on requests for service for newly arrived immigrants coming to 
  4.36  Minnesota. 
  5.1      (10) The specific enumeration of powers and duties as 
  5.2   hereinabove set forth shall in no way be construed to be a 
  5.3   limitation upon the general transfer of powers herein contained. 
  5.4      (11) Establish county, regional, or statewide schedules of 
  5.5   maximum fees and charges which may be paid by county agencies 
  5.6   for medical, dental, surgical, hospital, nursing and nursing 
  5.7   home care and medicine and medical supplies under all programs 
  5.8   of medical care provided by the state and for congregate living 
  5.9   care under the income maintenance programs. 
  5.10     (12) Have the authority to conduct and administer 
  5.11  experimental projects to test methods and procedures of 
  5.12  administering assistance and services to recipients or potential 
  5.13  recipients of public welfare.  To carry out such experimental 
  5.14  projects, it is further provided that the commissioner of human 
  5.15  services is authorized to waive the enforcement of existing 
  5.16  specific statutory program requirements, rules, and standards in 
  5.17  one or more counties.  The order establishing the waiver shall 
  5.18  provide alternative methods and procedures of administration, 
  5.19  shall not be in conflict with the basic purposes, coverage, or 
  5.20  benefits provided by law, and in no event shall the duration of 
  5.21  a project exceed four years.  It is further provided that no 
  5.22  order establishing an experimental project as authorized by the 
  5.23  provisions of this section shall become effective until the 
  5.24  following conditions have been met: 
  5.25     (a) The secretary of health and human services of the 
  5.26  United States has agreed, for the same project, to waive state 
  5.27  plan requirements relative to statewide uniformity. 
  5.28     (b) A comprehensive plan, including estimated project 
  5.29  costs, shall be approved by the legislative advisory commission 
  5.30  and filed with the commissioner of administration.  
  5.31     (13) According to federal requirements, establish 
  5.32  procedures to be followed by local welfare boards in creating 
  5.33  citizen advisory committees, including procedures for selection 
  5.34  of committee members. 
  5.35     (14) Allocate federal fiscal disallowances or sanctions 
  5.36  which are based on quality control error rates for the aid to 
  6.1   families with dependent children program formerly codified in 
  6.2   sections 256.72 to 256.87, medical assistance, or food stamp 
  6.3   program in the following manner:  
  6.4      (a) One-half of the total amount of the disallowance shall 
  6.5   be borne by the county boards responsible for administering the 
  6.6   programs.  For the medical assistance and the AFDC program 
  6.7   formerly codified in sections 256.72 to 256.87, disallowances 
  6.8   shall be shared by each county board in the same proportion as 
  6.9   that county's expenditures for the sanctioned program are to the 
  6.10  total of all counties' expenditures for the AFDC program 
  6.11  formerly codified in sections 256.72 to 256.87, and medical 
  6.12  assistance programs.  For the food stamp program, sanctions 
  6.13  shall be shared by each county board, with 50 percent of the 
  6.14  sanction being distributed to each county in the same proportion 
  6.15  as that county's administrative costs for food stamps are to the 
  6.16  total of all food stamp administrative costs for all counties, 
  6.17  and 50 percent of the sanctions being distributed to each county 
  6.18  in the same proportion as that county's value of food stamp 
  6.19  benefits issued are to the total of all benefits issued for all 
  6.20  counties.  Each county shall pay its share of the disallowance 
  6.21  to the state of Minnesota.  When a county fails to pay the 
  6.22  amount due hereunder, the commissioner may deduct the amount 
  6.23  from reimbursement otherwise due the county, or the attorney 
  6.24  general, upon the request of the commissioner, may institute 
  6.25  civil action to recover the amount due. 
  6.26     (b) Notwithstanding the provisions of paragraph (a), if the 
  6.27  disallowance results from knowing noncompliance by one or more 
  6.28  counties with a specific program instruction, and that knowing 
  6.29  noncompliance is a matter of official county board record, the 
  6.30  commissioner may require payment or recover from the county or 
  6.31  counties, in the manner prescribed in paragraph (a), an amount 
  6.32  equal to the portion of the total disallowance which resulted 
  6.33  from the noncompliance, and may distribute the balance of the 
  6.34  disallowance according to paragraph (a).  
  6.35     (15) Develop and implement special projects that maximize 
  6.36  reimbursements and result in the recovery of money to the 
  7.1   state.  For the purpose of recovering state money, the 
  7.2   commissioner may enter into contracts with third parties.  Any 
  7.3   recoveries that result from projects or contracts entered into 
  7.4   under this paragraph shall be deposited in the state treasury 
  7.5   and credited to a special account until the balance in the 
  7.6   account reaches $1,000,000.  When the balance in the account 
  7.7   exceeds $1,000,000, the excess shall be transferred and credited 
  7.8   to the general fund.  All money in the account is appropriated 
  7.9   to the commissioner for the purposes of this paragraph. 
  7.10     (16) Have the authority to make direct payments to 
  7.11  facilities providing shelter to women and their children 
  7.12  according to section 256D.05, subdivision 3.  Upon the written 
  7.13  request of a shelter facility that has been denied payments 
  7.14  under section 256D.05, subdivision 3, the commissioner shall 
  7.15  review all relevant evidence and make a determination within 30 
  7.16  days of the request for review regarding issuance of direct 
  7.17  payments to the shelter facility.  Failure to act within 30 days 
  7.18  shall be considered a determination not to issue direct payments.
  7.19     (17) Have the authority to establish and enforce the 
  7.20  following county reporting requirements:  
  7.21     (a) The commissioner shall establish fiscal and statistical 
  7.22  reporting requirements necessary to account for the expenditure 
  7.23  of funds allocated to counties for human services programs.  
  7.24  When establishing financial and statistical reporting 
  7.25  requirements, the commissioner shall evaluate all reports, in 
  7.26  consultation with the counties, to determine if the reports can 
  7.27  be simplified or the number of reports can be reduced. 
  7.28     (b) The county board shall submit monthly or quarterly 
  7.29  reports to the department as required by the commissioner.  
  7.30  Monthly reports are due no later than 15 working days after the 
  7.31  end of the month.  Quarterly reports are due no later than 30 
  7.32  calendar days after the end of the quarter, unless the 
  7.33  commissioner determines that the deadline must be shortened to 
  7.34  20 calendar days to avoid jeopardizing compliance with federal 
  7.35  deadlines or risking a loss of federal funding.  Only reports 
  7.36  that are complete, legible, and in the required format shall be 
  8.1   accepted by the commissioner.  
  8.2      (c) If the required reports are not received by the 
  8.3   deadlines established in clause (b), the commissioner may delay 
  8.4   payments and withhold funds from the county board until the next 
  8.5   reporting period.  When the report is needed to account for the 
  8.6   use of federal funds and the late report results in a reduction 
  8.7   in federal funding, the commissioner shall withhold from the 
  8.8   county boards with late reports an amount equal to the reduction 
  8.9   in federal funding until full federal funding is received.  
  8.10     (d) A county board that submits reports that are late, 
  8.11  illegible, incomplete, or not in the required format for two out 
  8.12  of three consecutive reporting periods is considered 
  8.13  noncompliant.  When a county board is found to be noncompliant, 
  8.14  the commissioner shall notify the county board of the reason the 
  8.15  county board is considered noncompliant and request that the 
  8.16  county board develop a corrective action plan stating how the 
  8.17  county board plans to correct the problem.  The corrective 
  8.18  action plan must be submitted to the commissioner within 45 days 
  8.19  after the date the county board received notice of noncompliance.
  8.20     (e) The final deadline for fiscal reports or amendments to 
  8.21  fiscal reports is one year after the date the report was 
  8.22  originally due.  If the commissioner does not receive a report 
  8.23  by the final deadline, the county board forfeits the funding 
  8.24  associated with the report for that reporting period and the 
  8.25  county board must repay any funds associated with the report 
  8.26  received for that reporting period. 
  8.27     (f) The commissioner may not delay payments, withhold 
  8.28  funds, or require repayment under paragraph (c) or (e) if the 
  8.29  county demonstrates that the commissioner failed to provide 
  8.30  appropriate forms, guidelines, and technical assistance to 
  8.31  enable the county to comply with the requirements.  If the 
  8.32  county board disagrees with an action taken by the commissioner 
  8.33  under paragraph (c) or (e), the county board may appeal the 
  8.34  action according to sections 14.57 to 14.69. 
  8.35     (g) Counties subject to withholding of funds under 
  8.36  paragraph (c) or forfeiture or repayment of funds under 
  9.1   paragraph (e) shall not reduce or withhold benefits or services 
  9.2   to clients to cover costs incurred due to actions taken by the 
  9.3   commissioner under paragraph (c) or (e). 
  9.4      (18) Allocate federal fiscal disallowances or sanctions for 
  9.5   audit exceptions when federal fiscal disallowances or sanctions 
  9.6   are based on a statewide random sample for the foster care 
  9.7   program under title IV-E of the Social Security Act, United 
  9.8   States Code, title 42, in direct proportion to each county's 
  9.9   title IV-E foster care maintenance claim for that period. 
  9.10     (19) Be responsible for ensuring the detection, prevention, 
  9.11  investigation, and resolution of fraudulent activities or 
  9.12  behavior by applicants, recipients, and other participants in 
  9.13  the human services programs administered by the department. 
  9.14     (20) Require county agencies to identify overpayments, 
  9.15  establish claims, and utilize all available and cost-beneficial 
  9.16  methodologies to collect and recover these overpayments in the 
  9.17  human services programs administered by the department. 
  9.18     (21) Have the authority to administer a drug rebate program 
  9.19  for drugs purchased pursuant to the prescription drug program 
  9.20  established under section 256.955 after the beneficiary's 
  9.21  satisfaction of any deductible established in the program.  The 
  9.22  commissioner shall require a rebate agreement from all 
  9.23  manufacturers of covered drugs as defined in section 256B.0625, 
  9.24  subdivision 13.  Rebate agreements for prescription drugs 
  9.25  delivered on or after July 1, 2002, must include rebates for 
  9.26  individuals covered under the prescription drug program who are 
  9.27  under 65 years of age.  For each drug, the amount of the rebate 
  9.28  shall be equal to the basic rebate as defined for purposes of 
  9.29  the federal rebate program in United States Code, title 42, 
  9.30  section 1396r-8(c)(1).  This basic rebate shall be applied to 
  9.31  single-source and multiple-source drugs.  The manufacturers must 
  9.32  provide full payment within 30 days of receipt of the state 
  9.33  invoice for the rebate within the terms and conditions used for 
  9.34  the federal rebate program established pursuant to section 1927 
  9.35  of title XIX of the Social Security Act.  The manufacturers must 
  9.36  provide the commissioner with any information necessary to 
 10.1   verify the rebate determined per drug.  The rebate program shall 
 10.2   utilize the terms and conditions used for the federal rebate 
 10.3   program established pursuant to section 1927 of title XIX of the 
 10.4   Social Security Act. 
 10.5      (22) Have the authority to administer the federal drug 
 10.6   rebate program for drugs purchased under the medical assistance 
 10.7   program as allowed by section 1927 of title XIX of the Social 
 10.8   Security Act and according to the terms and conditions of 
 10.9   section 1927.  Rebates shall be collected for all drugs that 
 10.10  have been dispensed or administered in an outpatient setting and 
 10.11  that are from manufacturers who have signed a rebate agreement 
 10.12  with the United States Department of Health and Human Services. 
 10.13     (23) Have the authority to administer a supplemental drug 
 10.14  rebate program for drugs purchased under the medical assistance 
 10.15  program.  The commissioner may enter into supplemental rebate 
 10.16  contracts with pharmaceutical manufacturers and may require 
 10.17  prior authorization for drugs that are from manufacturers that 
 10.18  have not signed a supplemental rebate contract.  Prior 
 10.19  authorization of drugs shall be subject to the provisions of 
 10.20  section 256B.0625, subdivision 13. 
 10.21     (24) Operate the department's communication systems account 
 10.22  established in Laws 1993, First Special Session chapter 1, 
 10.23  article 1, section 2, subdivision 2, to manage shared 
 10.24  communication costs necessary for the operation of the programs 
 10.25  the commissioner supervises.  A communications account may also 
 10.26  be established for each regional treatment center which operates 
 10.27  communications systems.  Each account must be used to manage 
 10.28  shared communication costs necessary for the operations of the 
 10.29  programs the commissioner supervises.  The commissioner may 
 10.30  distribute the costs of operating and maintaining communication 
 10.31  systems to participants in a manner that reflects actual usage. 
 10.32  Costs may include acquisition, licensing, insurance, 
 10.33  maintenance, repair, staff time and other costs as determined by 
 10.34  the commissioner.  Nonprofit organizations and state, county, 
 10.35  and local government agencies involved in the operation of 
 10.36  programs the commissioner supervises may participate in the use 
 11.1   of the department's communications technology and share in the 
 11.2   cost of operation.  The commissioner may accept on behalf of the 
 11.3   state any gift, bequest, devise or personal property of any 
 11.4   kind, or money tendered to the state for any lawful purpose 
 11.5   pertaining to the communication activities of the department.  
 11.6   Any money received for this purpose must be deposited in the 
 11.7   department's communication systems accounts.  Money collected by 
 11.8   the commissioner for the use of communication systems must be 
 11.9   deposited in the state communication systems account and is 
 11.10  appropriated to the commissioner for purposes of this section. 
 11.11     (25) Receive any federal matching money that is made 
 11.12  available through the medical assistance program for the 
 11.13  consumer satisfaction survey.  Any federal money received for 
 11.14  the survey is appropriated to the commissioner for this 
 11.15  purpose.  The commissioner may expend the federal money received 
 11.16  for the consumer satisfaction survey in either year of the 
 11.17  biennium. 
 11.18     (26) Incorporate cost reimbursement claims from First Call 
 11.19  Minnesota and Greater Twin Cities United Way into the federal 
 11.20  cost reimbursement claiming processes of the department 
 11.21  according to federal law, rule, and regulations.  Any 
 11.22  reimbursement received is appropriated to the commissioner and 
 11.23  shall be disbursed to First Call Minnesota and Greater Twin 
 11.24  Cities United Way according to normal department payment 
 11.25  schedules. 
 11.26     (27) Develop recommended standards for foster care homes 
 11.27  that address the components of specialized therapeutic services 
 11.28  to be provided by foster care homes with those services.  
 11.29     (28) Have the authority to administer a drug rebate program 
 11.30  for drugs purchased according to the fair drug pricing program 
 11.31  established under section 256.954.  The commissioner shall 
 11.32  require a rebate agreement from all manufacturers of covered 
 11.33  drugs as defined in section 256B.0625, subdivision 13.  For each 
 11.34  drug, the amount of the rebate shall be equal to the rebate as 
 11.35  defined for purposes of the federal rebate program in United 
 11.36  States Code, title 42, section 1396r-8.  The rebate program 
 12.1   shall utilize the terms and conditions used for the federal 
 12.2   rebate program established according to section 1927 of title 
 12.3   XIX of the federal Social Security Act.  
 12.4      Sec. 3.  [256.954] [FAIR DRUG PRICING PROGRAM.] 
 12.5      Subdivision 1.  [PURPOSE.] This act may be cited as the 
 12.6   Fair Drug Pricing Act.  It is the purpose of the legislature to 
 12.7   promote the health and well-being of Minnesota citizens by 
 12.8   providing affordable access to prescription drugs at prices that 
 12.9   are fair, not excessive, and nondiscriminatory.  
 12.10     Subd. 2.  [ESTABLISHMENT.] The commissioner of human 
 12.11  services shall establish and administer the fair drug pricing 
 12.12  program.  The commissioner may contract with a pharmacy benefit 
 12.13  manager to administer the program.  
 12.14     Subd. 3.  [DEFINITIONS.] For the purpose of this section, 
 12.15  the following terms have the meanings given them:  
 12.16     (a) "Commissioner" means the commissioner of human services.
 12.17     (b) "Manufacturer" means a manufacturer as defined in 
 12.18  section 151.44, paragraph (c).  
 12.19     (c) "Covered prescription drug" means a prescription drug 
 12.20  as defined in section 151.44, paragraph (d), that is covered 
 12.21  under medical assistance as described in section 256B.0625, 
 12.22  subdivision 13, and that is provided by a manufacturer that has 
 12.23  a fully executed rebate agreement with the commissioner under 
 12.24  this section and complies with that agreement.  Multisource 
 12.25  drugs, as defined in section 256B.0625, subdivision 13, are 
 12.26  excluded from the fair drug pricing program.  
 12.27     (d) "Health carrier" means an insurance company licensed 
 12.28  under chapter 60A to offer, sell, or issue an individual or 
 12.29  group policy of accident and sickness insurance as defined in 
 12.30  section 62.01; a nonprofit health service plan corporation 
 12.31  operating under chapter 62C; a health maintenance organization 
 12.32  operating under chapter 62D; a joint self-insurance employee 
 12.33  health plan operating under chapter 62H; a community integrated 
 12.34  systems network licensed under chapter 62N; a fraternal benefit 
 12.35  society operating under chapter 64B; and a self-funded health 
 12.36  plan under the Employee Retirement Income Security Act of 1974, 
 13.1   as amended.  
 13.2      (e) "Participating pharmacy" means a pharmacy as defined in 
 13.3   section 151.01, subdivision 2, that agrees to participate in the 
 13.4   fair drug pricing program.  
 13.5      (f) "Enrolled individual" means a person who is eligible 
 13.6   for the program under subdivision 4 and has enrolled in the 
 13.7   program according to subdivision 5.  
 13.8      Subd. 4.  [ELIGIBILITY.] To be eligible for the program, an 
 13.9   applicant must: 
 13.10     (1) be a permanent resident of Minnesota as defined in 
 13.11  section 256L.09, subdivision 4; 
 13.12     (2) not be enrolled in medical assistance, general 
 13.13  assistance medical care, MinnesotaCare, or the prescription drug 
 13.14  program under section 256.955; 
 13.15     (3) not be enrolled in and have currently available 
 13.16  prescription drug coverage under a health plan offered by a 
 13.17  health carrier; and 
 13.18     (4) not be enrolled in and have currently available 
 13.19  prescription drug coverage under a Medicare supplement plan, as 
 13.20  defined in sections 62A.31 to 62A.44, or policies, contracts, or 
 13.21  certificates that supplement Medicare issued by health 
 13.22  maintenance organizations or those policies, contracts, or 
 13.23  certificates governed by section 1833 or 1876 of the federal 
 13.24  Social Security Act, United States Code, title 42, section 1395, 
 13.25  et seq., as amended.  
 13.26     Subd. 5.  [APPLICATION.] (a) Applications and information 
 13.27  on the program must be made available at county social services 
 13.28  agencies, health care provider offices, and agencies and 
 13.29  organizations serving senior citizens.  Individuals shall submit 
 13.30  applications and any information specified by the commissioner 
 13.31  as being necessary to verify eligibility directly to the county 
 13.32  social services agencies.  County social services agencies shall 
 13.33  determine an applicant's eligibility for the program within 30 
 13.34  days from the date the application is received.  Eligibility 
 13.35  begins the month after approval.  
 13.36     (b) The commissioner shall develop an application form that 
 14.1   does not exceed one page in length and requires information 
 14.2   necessary to determine eligibility for the program.  
 14.3      Subd. 6.  [PARTICIPATING PHARMACY.] According to a valid 
 14.4   prescription, a participating pharmacy must sell a covered 
 14.5   prescription drug to an enrolled individual at the pharmacy's 
 14.6   usual and customary retail price, minus an amount that is equal 
 14.7   to the rebate amount described in subdivision 8, plus any 
 14.8   administrative fee and switch fee established by the 
 14.9   commissioner.  Each participating pharmacy shall provide the 
 14.10  commissioner with all information necessary to administer the 
 14.11  program, including, but not limited to, information on 
 14.12  prescription drug sales to enrolled individuals and usual and 
 14.13  customary retail prices.  
 14.14     Subd. 7.  [NOTIFICATION.] The commissioner shall notify 
 14.15  each drug manufacturer each calendar quarter or according to a 
 14.16  schedule to be established by the commissioner of the amount of 
 14.17  the rebate owed on the prescription drugs sold by participating 
 14.18  pharmacies to enrolled individuals.  
 14.19     Subd. 8.  [REBATE.] To the extent that a manufacturer's 
 14.20  prescription drugs are prescribed to a resident of this state, 
 14.21  the manufacturer must provide a rebate equal to the rebate 
 14.22  provided under the medical assistance program for any 
 14.23  prescription drug distributed by the manufacturer that is 
 14.24  purchased by an enrolled individual at a participating pharmacy. 
 14.25  The manufacturer must provide full payment within 30 days of 
 14.26  receipt of the state invoice for the rebate, or according to a 
 14.27  schedule to be established by the commissioner.  The 
 14.28  commissioner shall deposit all rebates received into the 
 14.29  Minnesota prescription drug dedicated fund established under 
 14.30  subdivision 11.  The manufacturer must provide the commissioner 
 14.31  with any information necessary to verify the rebate determined 
 14.32  per drug.  
 14.33     Subd. 9.  [DISTRIBUTION.] The commissioner shall distribute 
 14.34  on a biweekly basis the amount collected under subdivision 8 to 
 14.35  each participating pharmacy based on the prescription drugs sold 
 14.36  by that pharmacy to enrolled individuals, minus the amount of 
 15.1   the administrative fee established by the commissioner under 
 15.2   subdivision 10.  
 15.3      Subd. 10.  [ADMINISTRATIVE FEE; SWITCH FEE.] (a) The 
 15.4   commissioner may establish a reasonable administrative fee that 
 15.5   covers the commissioner's expenses for enrollment, processing 
 15.6   claims, and distributing rebates under this program to be paid 
 15.7   by enrolled individuals.  
 15.8      (b) The commissioner shall establish a reasonable switch 
 15.9   fee that covers expenses incurred by participating pharmacies in 
 15.10  formatting for the electronic submission of claims for 
 15.11  prescription drugs sold to enrolled individuals. 
 15.12     Subd. 11.  [DEDICATED FUND; USE OF FUND.] (a) The Minnesota 
 15.13  prescription drug dedicated fund is established as an account in 
 15.14  the state treasury.  The commissioner of finance shall credit to 
 15.15  the dedicated fund all rebates paid under subdivision 8, any 
 15.16  federal funds received for the program, and any appropriations 
 15.17  or allocations designated for the fund.  The commissioner of 
 15.18  finance shall ensure that fund money is invested under section 
 15.19  11A.25.  All money earned by the fund must be credited to the 
 15.20  fund.  The fund shall earn a proportionate share of the total 
 15.21  state annual investment income.  
 15.22     (b) Money in the fund is appropriated to the commissioner 
 15.23  of human services to reimburse participating pharmacies for 
 15.24  prescription drug discounts provided to enrolled individuals 
 15.25  under this section, to reimburse the commissioner for costs 
 15.26  related to enrollment, processing claims, distributing rebates, 
 15.27  and for other reasonable administrative costs related to 
 15.28  administration of the fair drug pricing program, and to repay 
 15.29  the general fund appropriation provided in section 4.  The 
 15.30  commissioner must administer the program so that the costs total 
 15.31  no more than funds appropriated plus the drug rebate proceeds.  
 15.32     Subd. 12.  [ENFORCEMENT.] (a) A violation of this section 
 15.33  shall be enforceable according to section 8.31.  
 15.34     (b) The remedies provided by this section are cumulative 
 15.35  and shall not be construed as restricting remedies otherwise 
 15.36  available against the same conduct under the common law or other 
 16.1   statutes of this state.  
 16.2      Sec. 4.  [APPROPRIATION.] 
 16.3      $....... is appropriated for the biennium ending June 30, 
 16.4   2005, from the general fund to the Minnesota prescription drug 
 16.5   dedicated fund established under the fair drug pricing program.  
 16.6      Sec. 5.  [EFFECTIVE DATE.] 
 16.7      Sections 1 to 3 are effective January 1, 2004.