SF 799

1st Engrossment - 90th Legislature (2017 - 2018) Posted on 09/27/2018 09:23am

A bill for an act
relating to health; establishing the Opioid Epidemic Response Advisory Council
and the opiate epidemic response account; modifying certain payment rates;
appropriating money; requiring a report; amending Minnesota Statutes 2016,
section 256B.0625, subdivision 13e; proposing coding for new law in Minnesota
Statutes, chapter 256.

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

Section 1. COMMISSIONER OF HUMAN SERVICES

Subdivision 1. Total Appropriation

$

-0-

$

32,145,000

The amounts that may be spent for each
purpose are specified in the following
subdivisions.

Subd. 2. Central Office; Operations

-0-

6,549,000

(a) Advisory Council on Rare Diseases.
$150,000 in fiscal year 2019 is for transfer to
the Board of Regents of the University of
Minnesota for the advisory council on rare
diseases under Minnesota Statutes, section
137.68.

(b) Study and Report on Health Insurance
Rate Disparities between Geographic
Rating Areas. $251,000 in fiscal year 2019
is for transfer to the Legislative Coordinating
Commission for the Office of the Legislative
Auditor to study and report on disparities
between geographic rating areas in individual
and small group market health insurance rates.
This is a onetime appropriation and a onetime
transfer.

(c) Substance Abuse Recovery Services
Provided through Minnesota Recovery
Corps. $309,000 in fiscal year 2019 is for
transfer to ServeMinnesota under Minnesota
Statutes, section 124D.37, to provide
evidenced-based substance abuse recovery
services through Minnesota Recovery Corps.
Funds shall be used to support training,
supervision, and deployment of AmeriCorps
members to serve as recovery navigators. The
Minnesota Commission on National and
Community Service shall include in the
commission's report to the legislature under
Minnesota Statutes, section 124D.385,
subdivision 3, an evaluation of program data
to determine the efficacy of the services in
promoting sustained substance abuse recovery,
including but not limited to stable housing,
relationship-building, employment skills, or
a year of AmeriCorps service. This is a
onetime appropriation and a onetime transfer.

(d) Base Level Adjustment. The general fund
base is increased by $6,993,000 in fiscal year
2020 and increased by $6,936,000 in fiscal
year 2021.

Subd. 3. Central Office; Children and Families

-0-

84,000

Task Force on Childhood
Trauma-Informed Policy and Practices.
$84,000 in fiscal year 2019 is for the task force
on childhood trauma-informed policy and
practices. This is a onetime appropriation.

Subd. 4. Central Office; Health Care

-0-

1,058,000

Base Level Adjustment. The general fund
base is increased by $1,574,000 in fiscal year
2020 and increased by $1,580,000 in fiscal
year 2021.

Subd. 5. Central Office; Continuing Care for Older Adults

-0-

2,353,000

(a) Regional Ombudsmen. $1,283,000 in
fiscal year 2019 is for nine additional regional
ombudsmen and one policy lead in the Office
of Ombudsman for Long-Term Care, to
perform the duties in Minnesota Statutes,
section 256.9742. The base for this
appropriation is $1,459,000 in fiscal year 2020
and $1,459,000 in fiscal year 2021.

(b) Base Level Adjustment. The general fund
base is increased by $2,149,000 in fiscal year
2020 and increased by $2,149,000 in fiscal
year 2021.

Subd. 6. Central Office; Community Supports

-0-

4,072,000

Base Level Adjustment. The general fund
base is increased by $4,012,000 in fiscal year
2020 and increased by $4,012,000 in fiscal
year 2021.

Subd. 7. Forecasted Programs; Medical Assistance

-0-

28,082,000

Subd. 8. Forecasted Programs; Alternative Care

-0-

(28,000)

Subd. 9. Forecasted Programs; Chemical Dependency Treatment Fund

-0-

(12,153,000)

Subd. 10. Grant Programs; Children's Services Grants

-0-

365,000

American Indian Child Welfare Initiative.
$365,000 in fiscal year 2019 is for planning
efforts to expand the American Indian Child
Welfare Initiative authorized under Minnesota
Statutes, section 256.01, subdivision 14b. Of
this appropriation, $240,000 is for a grant to
the Mille Lacs Band of Ojibwe and $125,000
is for a grant to the Red Lake Nation. This is
a onetime appropriation.

Subd. 11. Grant Programs; Child and Economic Support Grants

-0-

517,000

(a) Community Action Grants. $200,000 in
fiscal year 2019 is for community action grants
under Minnesota Statutes, sections 256E.30
to 256E.32. The base for this appropriation is
$150,000 in fiscal year 2020 and $150,000 in
fiscal year 2021.

(b) Mobile food shelf grants. (1) $117,000
in fiscal year 2019 is for mobile food shelf
grants under Minnesota Statutes, section
256E.34. The base for this appropriation is
$115,000 in fiscal year 2020 and $115,000 in
fiscal year 2021.

(c) Project Legacy. $200,000 in fiscal year
2019 is for a grant to Project Legacy to
provide counseling and outreach to youth and
young adults from families with a history of
generational poverty. This appropriation must
be used for mental health care, medical care,
chemical dependency interventions, housing,
and mentoring and counseling services for
first generation college students. This is a
onetime appropriation.

(d) Base Level Adjustment. The general fund
base is increased by $265,000 in fiscal year
2020 and increased by $265,000 in fiscal year
2021.

Subd. 12. Grant Programs; Aging and Adult Services Grants

-0-

-0-

Live Well At Home Grants. Of the fiscal
year 2019 general fund appropriation in Laws
2017, First Special Session chapter 6, article
18, section 2, subdivision 27: (1) $50,000 shall
be used to provide a live well at home grant
under Minnesota Statutes, section 256B.0917,
to an organization that provides block nurse
services to the elderly in the city of McGregor;
and (2) $120,000 shall be used to provide a
live well at home grant under Minnesota
Statutes, section 256B.0917, to an organization
that provides block nurse services to the
elderly in the city of Grove City.

Subd. 13. Grant Programs; Chemical Dependency Treatment Support Grants

-0-

1,246,000

(a) Student Health Initiative to Limit Opioid
Harm. $195,000 in fiscal year 2019 is for the
student health initiative to limit opioid harm.
This is a onetime appropriation.

(b) Opioid Epidemic Response Grants.
$1,051,000 is for opioid epidemic response
grants under Minnesota Statutes, section
256.043. The base for this appropriation is
$1,000,000 in fiscal year 2020 and $1,000,000
in fiscal year 2021. The commissioner shall
transfer $1,051,000 in fiscal year 2019 from
the general fund to the opioid epidemic
response account under Minnesota Statutes,
section 256.043. The base for this transfer is
$1,000,000 in fiscal year 2020 and $1,000,000
in fiscal year 2021.

(c) Base Level Adjustment. The general fund
base is increased by $1,000,000 in fiscal year
2020 and increased by $1,000,000 in fiscal
year 2021.

EFFECTIVE DATE.

This section is effective July 1, 2018, and replaces article 45,
section 2, in S.F. No. 3656 if enacted.

Sec. 2. COMMISSIONER OF HEALTH

Subdivision 1. Total Appropriation

$

-0-

$

7,069,000

Appropriations by Fund
	2018	2019
General	-0-	7,044,000
State Government Special Revenue	-0-	25,000

The amounts that may be spent for each
purpose are specified in the following
subdivisions.

Subd. 2. Health Improvement

-0-

4,554,000

(a) Minnesota Biomedicine and Bioethics
Innovation Grants. $500,000 in fiscal year
2019 is for transfer to the Board of Regents
of the University of Minnesota for Minnesota
biomedicine and bioethics innovation grants
under Minnesota Statutes, section 137.67.

(b) Mental Health and Substance Use
Disorder Parity Work Group. $75,000 in
fiscal year 2019 is for transfer to the
commissioner of commerce for the mental
health and substance use disorder parity work
group. This is a onetime appropriation and a
onetime transfer.

(c) The TAP Program. Notwithstanding
Minnesota Statutes, section 16B.97, $10,000
in fiscal year 2019 is for a grant to the TAP
in St. Paul to support mental health in
disability communities through spoken art
forms, community supports, and community
engagement. The commissioner may use only
up to 3.5 percent of this appropriation for
administrative costs.

(d) Opioid Overdose Reduction Pilot
Program. $1,000,000 in fiscal year 2019 is
for the opioid overdose reduction pilot
program. This is a onetime appropriation and
is available until June 30, 2021. The
commissioner may use only up to 3.5 percent
of this appropriation for administrative costs.

(e) Reduction of Statewide Health
Improvement Program Appropriation. The
appropriation in Laws 2017, First Special
Session chapter 6, article 18, section 3,
subdivision 2, from the health care access fund
for the statewide health improvement program
under Minnesota Statutes, section 145.986, is
reduced by $291,000 in fiscal year 2019. The
base for this reduction is $1,550,000 in fiscal
year 2020, and $2,955,000 in fiscal year 2021.

(f) Statewide Tobacco Cessation Services.
$291,000 in fiscal year 2019 is appropriated
from the health care access fund for statewide
tobacco cessation services under Minnesota
Statutes, section 144.397. The base for this
appropriation is $1,550,000 in fiscal year
2020, and $2,955,000 in fiscal year 2021.

(g) Additional Funding for Opioid
Prevention Pilot Projects. $2,000,000 in
fiscal year 2019 is for opioid abuse prevention
pilot projects under Laws 2017, First Special
Session chapter 6, article 10, section 144. Of
this amount, $1,400,000 is for the opioid abuse
prevention pilot project through CHI St.
Gabriel's Health Family Medical Center, also
known as Unity Family Health Care. $600,000
is for Project Echo through CHI St. Gabriel's
Health Family Medical Center for e-learning
sessions centered around opioid case
management and best practices for opioid
abuse prevention. The commissioner may use
only up to 3.5 percent of this appropriation for
administrative costs.

(h) Suicide Prevention Grants. $969,000 in
fiscal year 2019 is for suicide prevention
grants under Minnesota Statutes, section
145.56, subdivision 2, clause (7). This is a
onetime appropriation.

(i) Base Level Adjustments. The general fund
base is increased by $500,000 in fiscal year
2020 and increased by $500,000 in fiscal year
2021.

Subd. 3. Health Protection

Appropriations by Fund
General	-0-	2,490,000
State Government Special Revenue	-0-	25,000

(a) Regulation of Low-Dose X-Ray Security
Screening Systems. $29,000 in fiscal year
2019 is from the state government special
revenue fund for rulemaking under Minnesota
Statutes, section 144.121. The base for this
appropriation is $21,000 in fiscal year 2020
and $21,000 in fiscal year 2021.

(b) Assisted Living Report Card Working
Group. $27,000 in fiscal year 2019 is from
the general fund for the assisted living report
card working group. This is a onetime
appropriation.

(c) Assisted Living Licensure and Dementia
Care Task Force. $60,000 in fiscal year 2019
is from the general fund for the Assisted
Living Licensure and Dementia Care Task
Force.This is a onetime appropriation.

(d) Safety and Quality Improvement
Practices Report. $33,000 in fiscal year 2019
is from the general fund for the safety and
quality improvement practices report.

(e) Technology Upgrades. $1,755,000 in
fiscal year 2019 is from the general fund for
Web site improvements and data analytics at
the Office of Health Facility Complaints. The
general fund base for this appropriation is
$971,000 in fiscal year 2020 and $853,000 in
fiscal year 2021.

(f) Base Level Adjustment. The general fund
base is increased by $1,420,000 in fiscal year
2020 and increased by $1,289,000 in fiscal
year 2021. The state government special
revenue fund base is increased by $17,000 in
fiscal year 2020 and increased by $17,000 in
fiscal year 2021.

EFFECTIVE DATE.

This section is effective July 1, 2018, and replaces article 45,
section 3, in S.F. No. 3656 if enacted.

Sec. 3.

[256.042] OPIOID EPIDEMIC RESPONSE ADVISORY COUNCIL.

Subdivision 1.

Establishment of the advisory council.

(a) The Opioid Epidemic
Response Advisory Council is established to develop and implement a comprehensive and
effective statewide effort to address the opioid addiction and overdose epidemic in Minnesota.
The council shall focus on:

(1) prevention and education, including public education and awareness for adults and
youth, prescriber education, the development and sustainability of opioid overdose prevention
and education programs, and providing financial support to local law enforcement agencies
for opiate antagonist programs;

(2) treatment, including statewide access to effective treatment and recovery services
that is aligned with Minnesota's model of care approach to promoting access to treatment
and recovery services. This includes ensuring that individuals throughout the state have
access to treatment and recovery services, including care coordination services; peer recovery
services; medication-assisted treatment and office-based opioid treatment; integrative and
multidisciplinary therapies; and culturally specific services; and

(3) innovation and capacity building, including development of evidence-based practices,
using research and evaluation to understand which policies and programs promote efficient
and effective prevention, treatment, and recovery results. This also includes ensuring that
there are qualified providers and a comprehensive set of treatment and recovery services
throughout the state.

(b) The council shall:

(1) review local, state, and federal initiatives and funding related to prevention and
education, treatment, and services for individuals and families experiencing and affected
by opioid abuse, and promoting innovation and capacity building to address the opioid
addiction and overdose epidemic;

(2) establish priorities to address the state's opioid addiction and overdose epidemic for
the purpose of allocating funds and consult with the commissioner of management and
budget to determine whether proposals are for evidence-based practices, promising practices,
or theory-based practices;

(3) ensure that available funding under this section is allocated to align with existing
state and federal funding to achieve the greatest impact and ensure a coordinated state effort
to address the opioid addiction and overdose epidemic;

(4) develop criteria and procedures to be used in awarding grants and allocating available
funds from the opioid epidemic response account and select proposals to receive grant
funding. The council is encouraged to select proposals that are promising practices or
theory-based practices, in addition to evidence-based practices, to help identify new
approaches to effective prevention, treatment, and recovery; and

(5) in consultation with the commissioner of management and budget, and within
available appropriations, select from the awarded grants projects that include promising
practices or theory-based activities for which the commissioner of management and budget
shall conduct evaluations using experimental or quasi-experimental design. Grants awarded
to proposals that include promising practices or theory-based activities and that are selected
for an evaluation shall be administered to support the experimental or quasi-experimental
evaluation and require grantees to collect and report information that is needed to complete
the evaluation. The commissioner of management and budget, under section 15.08, may
obtain additional relevant data to support the experimental or quasi-experimental evaluation
studies.

Subd. 2.

Membership.

(a) The council shall consist of 18 members appointed by the
commissioner of human services, except as otherwise specified:

(1) two members of the house of representatives, one from the majority party appointed
by the speaker of the house and one from the minority party appointed by the minority
leader;

(2) two members of the senate, one from the majority party appointed by the senate
majority leader and one from the minority party appointed by the senate minority leader;

(3) one member appointed by the Board of Pharmacy;

(4) one member who is a physician appointed by the Minnesota chapter of the American
College of Emergency Physicians;

(5) one member representing opioid treatment programs or sober living programs;

(6) one member who is a physician appointed by the Minnesota Hospital Association;

(7) one member who is a physician appointed by the Minnesota Society of Addiction
Medicine;

(8) one member who is a pain psychologist;

(9) one member appointed by the Steve Rummler Hope Network;

(10) one member appointed by the Minnesota Ambulance Association;

(11) one member representing the Minnesota courts who is a judge or law enforcement
officer;

(12) one public member who is a Minnesota resident and who has been impacted by the
opioid epidemic;

(13) one member representing a manufacturer of opiates;

(14) one member representing an Indian tribe;

(15) the commissioner of human services or designee; and

(16) the commissioner of health or designee.

(b) The commissioner of human services shall coordinate appointments to provide
geographic diversity and shall ensure that at least one-half of council members reside outside
of the seven-county metropolitan area.

(c) The council is governed by section 15.059, except that members of the council shall
receive no compensation other than reimbursement for expenses. Notwithstanding section
15.059, subdivision 6, the council shall not expire.

(d) The chair shall convene the council at least quarterly, and may convene other meetings
as necessary. The chair shall convene meetings at different locations in the state to provide
geographic access, and shall ensure that at least one-half of the meetings are held at locations
outside of the seven-county metropolitan area.

(e) The commissioner of human services shall provide staff and administrative services
for the advisory council.

(f) The council is subject to chapter 13D.

Subd. 3.

Conflict of interest.

Advisory council members must disclose to the council
and recuse themselves from voting on any matter before the council if the member has a
conflict of interest. A conflict of interest means a financial association that has the potential
to bias or have the appearance of biasing a council member's decision related to the opioid
epidemic response grant decision process or other council activities under this section.

Subd. 4.

Grants.

(a) The commissioner of human services shall submit a report of the
grants proposed by the advisory council to be awarded for the upcoming fiscal year to the
chairs and ranking minority members of the legislative committees with jurisdiction over
health and human services policy and finance, by March 1 of each year, beginning March
1, 2019.

(b) The commissioner of human services shall award grants from the opioid epidemic
response account under section 256.043. The grants shall be awarded to proposals selected
by the advisory council that address the priorities in paragraph (a), clauses (1) to (3), unless
otherwise appropriated by the legislature. No more than three percent of the grant amount
may be used by a grantee for administration.

Subd. 5.

Reports.

(a) The advisory council shall report annually to the chairs and ranking
minority members of the legislative committees with jurisdiction over health and human
services policy and finance by January 1 of each year beginning January 1, 2021, information
about the individual projects that receive grants and the overall role of the project in
addressing the opioid addiction and overdose epidemic in Minnesota. The report must
describe the grantees and the activities implemented, along with measurable outcomes as
determined by the council in consultation with the commissioner of human services and the
commissioner of management and budget.

(b) The commissioner of management and budget, in consultation with the Opioid
Epidemic Response Council, shall report to the chairs and ranking minority members of
the legislative committees with jurisdiction over health and human services policy and
finance when an evaluation study described in subdivision 1, paragraph (b), clause (5), is
complete on the promising practices or theory-based projects that are selected for evaluation
activities. The report shall include demographic information; outcome information for the
individuals in the program; the results for the program in promoting recovery, employment,
family reunification, and reducing involvement with the criminal justice system; and other
relevant outcomes determined by the commissioner of management and budget that are
specific to the projects that are evaluated. The report shall include information about the
ability of grant programs to be scaled to achieve statewide the results that the grant project
demonstrated.

Sec. 4.

[256.043] OPIATE EPIDEMIC RESPONSE ACCOUNT.

Subdivision 1.

Establishment.

The opiate epidemic response account is established in
the special revenue fund in the state treasury.

Subd. 2.

Use of account funds.

(a) Beginning in fiscal year 2019, money in the account
shall be appropriated each fiscal year as specified in this subdivision.

(b) $213,000 is appropriated to the commissioner of management and budget for
evaluation activities for selected projects.

(c) $384,000 is appropriated to the commissioner of public safety for Bureau of Criminal
Apprehension drug scientists and lab supplies.

(d) $56,000 is appropriated to the commissioner of human services for the provision of
administrative services to the Opioid Epidemic Response Advisory Council.

(e) Money remaining in the opioid epidemic response account after making the
appropriations required in paragraphs (b) through (d) is appropriated to the commissioner
of human services to be allocated as grants as specified by the opioid epidemic response
advisory council in accordance with section 256.042, unless otherwise appropriated by the
legislature.

EFFECTIVE DATE.

This section is effective July 1, 2018, and replaces article 38,
section 10, in S.F. No. 3656 if enacted.

Sec. 5.

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

Subd. 13e.

Payment rates.

(a) Effective January 1, 2019, or upon federal approval,
whichever is later, the basis for determining the amount of payment shall be the lower of
the actual acquisition costs ingredient cost of the drugs or the maximum allowable cost by
the commissioner plus the fixed professional dispensing fee; or the usual and customary
price charged to the public. The usual and customary price is defined as the lowest price
charged by the provider to a patient who pays for the prescription by cash, check, or charge
account and includes those prices the pharmacy charges to customers enrolled in a
prescription savings club or prescription discount club administered by the pharmacy or
pharmacy chain. The amount of payment basis must be reduced to reflect all discount
amounts applied to the charge by any third-party provider/insurer agreement or contract for
submitted charges to medical assistance programs. The net submitted charge may not be
greater than the patient liability for the service. The pharmacy professional dispensing fee
shall be $3.65 $10.48 for legend prescription drugs prescriptions filled with legend drugs
meeting the definition of "covered outpatient drugs" according to United States Code, title
42, section 1396r-8, paragraph (k), clause (2), except that the dispensing fee for intravenous
solutions which must be compounded by the pharmacist shall be $8 $10.48 per bag, $14
per bag for cancer chemotherapy products, and $30 per bag for total parenteral nutritional
products dispensed in one liter quantities, or $44 per bag for total parenteral nutritional
products dispensed in quantities greater than one liter. The professional dispensing fee for
prescriptions filled with over-the-counter drugs meeting the definition of covered outpatient
drugs shall be $10.48 for dispensed quantities equal to or greater than the number of units
contained in the manufacturer's original package. The professional dispensing fee shall be
prorated based on the percentage of the package dispensed when the pharmacy dispenses
a quantity less than the number of units contained in the manufacturer's original package.
The pharmacy dispensing fee for prescribed over-the-counter drugs not meeting the definition
of covered outpatient drugs shall be $3.65, except that the fee shall be $1.31 for
retrospectively billing pharmacies when billing for quantities less than the number of units
contained in the manufacturer's original package. Actual acquisition cost includes quantity
and other special discounts except time and cash discounts. The actual acquisition cost of
a drug shall be estimated by the commissioner at wholesale acquisition cost plus four percent
for independently owned pharmacies located in a designated rural area within Minnesota,
and at wholesale acquisition cost plus two percent for all other pharmacies. A pharmacy is
"independently owned" if it is one of four or fewer pharmacies under the same ownership
nationally. A "designated rural area" means an area defined as a small rural area or isolated
rural area according to the four-category classification of the Rural Urban Commuting Area
system developed for the United States Health Resources and Services Administration.
Effective January 1, 2014, the actual acquisition for quantities equal to or greater than the
number of units contained in the manufacturer's original package and shall be prorated based
on the percentage of the package dispensed when the pharmacy dispenses a quantity less
than the number of units contained in the manufacturer's original package. The National
Average Drug Acquisition Cost (NADAC) shall be used to determine the ingredient cost
of a drug. For drugs for which a NADAC is not reported, the commissioner shall estimate
the ingredient cost at wholesale acquisition cost minus two percent. The commissioner shall
establish the ingredient cost of a drug acquired through the federal 340B Drug Pricing
Program shall be estimated by the commissioner at wholesale acquisition cost minus 40
percent at a 340B Drug Pricing Program maximum allowable cost. The 340B Drug Pricing
Program maximum allowable cost shall be comparable to, but no higher than, the 340B
Drug Pricing Program ceiling price established by the Health Resources and Services
Administration. Wholesale acquisition cost is defined as the manufacturer's list price for a
drug or biological to wholesalers or direct purchasers in the United States, not including
prompt pay or other discounts, rebates, or reductions in price, for the most recent month for
which information is available, as reported in wholesale price guides or other publications
of drug or biological pricing data. The maximum allowable cost of a multisource drug may
be set by the commissioner and it shall be comparable to, but the actual acquisition cost of
the drug product and no higher than, the maximum amount paid by other third-party payors
in this state who have maximum allowable cost programs and no higher than the NADAC
of the generic product. Establishment of the amount of payment for drugs shall not be subject
to the requirements of the Administrative Procedure Act.

(b) Pharmacies dispensing prescriptions to residents of long-term care facilities using
an automated drug distribution system meeting the requirements of section 151.58, or a
packaging system meeting the packaging standards set forth in Minnesota Rules, part
6800.2700, that govern the return of unused drugs to the pharmacy for reuse, may employ
retrospective billing for prescription drugs dispensed to long-term care facility residents. A
retrospectively billing pharmacy must submit a claim only for the quantity of medication
used by the enrolled recipient during the defined billing period. A retrospectively billing
pharmacy must use a billing period not less than one calendar month or 30 days.

(c) An additional dispensing fee of $.30 may be added to the dispensing fee paid to
pharmacists for legend drug prescriptions dispensed to residents of long-term care facilities
when a unit dose blister card system, approved by the department, is used. Under this type
of dispensing system, the pharmacist must dispense a 30-day supply of drug. The National
Drug Code (NDC) from the drug container used to fill the blister card must be identified
on the claim to the department. The unit dose blister card containing the drug must meet
the packaging standards set forth in Minnesota Rules, part 6800.2700, that govern the return
of unused drugs to the pharmacy for reuse. A pharmacy provider using packaging that meets
the standards set forth in Minnesota Rules, part 6800.2700, is required to credit the
department for the actual acquisition cost of all unused drugs that are eligible for reuse,
unless the pharmacy is using retrospective billing. The commissioner may permit the drug
clozapine to be dispensed in a quantity that is less than a 30-day supply.

(d) Whenever a maximum allowable cost has been set for If a pharmacy dispenses a
multisource drug, payment shall be the lower of the usual and customary price charged to
the public or the ingredient cost shall be the NADAC of the generic product or the maximum
allowable cost established by the commissioner unless prior authorization for the brand
name product has been granted according to the criteria established by the Drug Formulary
Committee as required by subdivision 13f, paragraph (a), and the prescriber has indicated
"dispense as written" on the prescription in a manner consistent with section 151.21,
subdivision 2.

(e) The basis for determining the amount of payment for drugs administered in an
outpatient setting shall be the lower of the usual and customary cost submitted by the
provider, 106 percent of the average sales price as determined by the United States
Department of Health and Human Services pursuant to title XVIII, section 1847a of the
federal Social Security Act, the specialty pharmacy rate, or the maximum allowable cost
set by the commissioner. If average sales price is unavailable, the amount of payment must
be lower of the usual and customary cost submitted by the provider, the wholesale acquisition
cost, the specialty pharmacy rate, or the maximum allowable cost set by the commissioner.
Effective January 1, 2014 2019, or upon federal approval, whichever is later, the
commissioner shall discount the payment rate for drugs obtained through the federal 340B
Drug Pricing Program by 20 28.6 percent. The payment for drugs administered in an
outpatient setting shall be made to the administering facility or practitioner. A retail or
specialty pharmacy dispensing a drug for administration in an outpatient setting is not
eligible for direct reimbursement.

(f) The commissioner may negotiate lower reimbursement rates establish maximum
allowable cost rates for specialty pharmacy products than the rates that are lower than the
ingredient cost formulas specified in paragraph (a). The commissioner may require
individuals enrolled in the health care programs administered by the department to obtain
specialty pharmacy products from providers with whom the commissioner has negotiated
lower reimbursement rates able to provide enhanced clinical services and willing to accept
the specialty pharmacy reimbursement. Specialty pharmacy products are defined as those
used by a small number of recipients or recipients with complex and chronic diseases that
require expensive and challenging drug regimens. Examples of these conditions include,
but are not limited to: multiple sclerosis, HIV/AIDS, transplantation, hepatitis C, growth
hormone deficiency, Crohn's Disease, rheumatoid arthritis, and certain forms of cancer.
Specialty pharmaceutical products include injectable and infusion therapies, biotechnology
drugs, antihemophilic factor products, high-cost therapies, and therapies that require complex
care. The commissioner shall consult with the formulary committee to develop a list of
specialty pharmacy products subject to this paragraph maximum allowable cost
reimbursement. In consulting with the formulary committee in developing this list, the
commissioner shall take into consideration the population served by specialty pharmacy
products, the current delivery system and standard of care in the state, and access to care
issues. The commissioner shall have the discretion to adjust the reimbursement rate maximum
allowable cost to prevent access to care issues.

(g) Home infusion therapy services provided by home infusion therapy pharmacies must
be paid at rates according to subdivision 8d.

(h) Subject to federal approval, effective for prescriptions filled on or after January 1,
2019, the commissioner shall increase the ingredient cost reimbursement calculated in
paragraphs (a) and (f) by two percent for prescription and nonprescription drugs subject to
the wholesale drug distributor tax under section 295.52.

EFFECTIVE DATE.

This section is effective July 1, 2018, and replaces article 34,
section 10, in S.F. No. 3656 if enacted.

Sec. 6. STATE LOTTERY.

The amendments to Minnesota Statutes 2016, section 349A.06, subdivision 11, by 2018
S.F. No. 3656, article 2, section 18, if enacted, are repealed retroactively to the day of final
enactment.

Sec. 7. INSURANCE RISK.

The amendments to Minnesota Statutes 2016, section 62V.05, subdivision 10, by 2018
S.F. No. 3656, article 43, section 2, if enacted, are repealed retroactively to the day of final
enactment.

Sec. 8. EFFECTIVE DATE.

This act is effective only if 2018 S.F. No. 3656 is enacted.