Skip to main content Skip to office menu Skip to footer
Capital IconMinnesota Legislature

SF 1509

as introduced - 90th Legislature (2017 - 2018) Posted on 07/31/2018 10:46am

KEY: stricken = removed, old language.
underscored = added, new language.
Line numbers 1.1 1.2 1.3 1.4 1.5 1.6
1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 1.17 1.18 1.19 1.20 1.21 1.22 1.23 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 2.23 2.24 2.25 2.26 2.27 2.28 2.29 2.30 2.31 2.32 2.33 3.1 3.2 3.3 3.4 3.5 3.6
3.7 3.8 3.9 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29 4.30 4.31 4.32 4.33 4.34 4.35 4.36 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 5.13 5.14 5.15 5.16 5.17 5.18 5.19 5.20 5.21 5.22 5.23 5.24 5.25 5.26 5.27 5.28 5.29 5.30 5.31 5.32 5.33 5.34 5.35 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6.18 6.19 6.20 6.21 6.22 6.23 6.24 6.25 6.26

A bill for an act
relating to human services; modifying provisions for dispensing certain drugs
under medical assistance; modifying payment rates for certain drugs under medical
assistance; amending Minnesota Statutes 2016, section 256B.0625, subdivisions
13, 13e.

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. deleted text beginOver-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).
deleted text end

(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.

Sec. 2.

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


Subd. 13e.

Payment rates.

(a) new text beginEffective April 1, 2017, or upon federal approval,
whichever is later,
new text endthe basis for determining the amount of payment shall be the lower of
the deleted text beginactual acquisition costsdeleted text endnew text begin ingredient costnew text end of the drugs deleted text beginor the maximum allowable cost by
the commissioner
deleted text end plus the deleted text beginfixeddeleted text endnew text begin professionalnew text end dispensing fee; or the usual and customary
price charged to the public. new text beginThe 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.
new text endThe amount of payment basis must be reduced to reflect all discount
amounts applied to the charge by any new text beginthird-party new text endprovider/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 deleted text beginpharmacydeleted text endnew text begin professionalnew text end dispensing fee
shall be deleted text begin$3.65deleted text endnew text begin $11.35new text end for deleted text beginlegend prescription drugsdeleted text endnew text begin prescriptions filled with legend drugs
meeting the definition of "covered outpatient drugs" according to United States Code, title
42, section 1396r-8(k)(2)
new text end, except that the dispensing fee for intravenous solutions which
must be compounded by the pharmacist shall be deleted text begin$8deleted text endnew text begin $11.35new text end per bagdeleted text begin, $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
deleted text end. new text beginThe professional dispensing fee for prescriptions filled with
over-the-counter drugs meeting the definition of covered outpatient drugs shall be $11.35
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.
new text endThe pharmacy
dispensing fee for new text beginprescribed new text endover-the-counter drugs new text beginnot meeting the definition of covered
outpatient drugs
new text endshall be $3.65deleted text begin, 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
deleted text endnew text begin 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
new text end cost of a drug deleted text beginshall 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
deleted text end. deleted text beginA 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
deleted text endnew text begin 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
new text end
cost of a drug acquired through the federal 340B Drug Pricing Program deleted text beginshall be estimated
by the commissioner at wholesale acquisition cost minus 40 percent
deleted text endnew text begin 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
new text end. 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 todeleted text begin, butdeleted text endnew text begin the actual acquisition cost of the drug product andnew text end no higher
than, the maximum amount paid by other third-party payors in this state who have maximum
allowable cost programsnew text begin and no higher than the NADAC of the generic productnew text end.
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) deleted text beginAn 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.
deleted text end 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) deleted text beginWhenever a maximum allowable cost has been set fordeleted text end new text beginIf a pharmacy dispenses new text enda
multisource drug, deleted text beginpayment shall be the lower of the usual and customary price charged to
the public or
deleted text end thenew text begin ingredient cost shall be the NADAC of the generic product or thenew text end 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, the commissioner shall discount the payment rate for drugs
obtained through the federal 340B Drug Pricing Program by 20 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 deleted text beginnegotiate lower reimbursement ratesdeleted text endnew text begin establish maximum
allowable cost rates
new text end for specialty pharmacy products deleted text beginthan the ratesdeleted text endnew text begin that are lower than the
ingredient cost formulas
new text end 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 deleted text beginwith whom the commissioner has negotiated
lower reimbursement rates
deleted text endnew text begin able to provide enhanced clinical services and willing to accept
the specialty pharmacy reimbursement
new text end. 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 deleted text beginthis paragraphdeleted text endnew text begin maximum allowable cost
reimbursement
new text end. 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 deleted text beginreimbursement ratedeleted text endnew text begin maximum
allowable cost
new text end 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.

new text begin (h) Effective for prescriptions filled on or after April 1, 2017, or upon federal approval,
whichever is later, 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.
new text end