SF 1519

as introduced - 86th Legislature (2009 - 2010) Posted on 02/09/2010 02:21am

A bill for an act
relating to human services; requiring the commissioner of human services to
establish and administer a universal prescription drug program and prescription
drug bulk purchasing program; establishing a dedicated fund; appropriating
money; requiring mandated reports; proposing coding for new law as Minnesota
Statutes, chapter 256O.

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

Section 1.

new text begin [256O.01] UNIVERSAL PRESCRIPTION DRUG PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment; administration. new text end

new text begin By July 1, 2011, the commissioner
shall establish and administer the universal prescription drug program.
new text end

new text begin Subd. 2. new text end

new text begin Prohibition. new text end

new text begin After full implementation of the universal prescription
drug program, no health plan, as defined in section 62Q.01, subdivision 3, that includes
coverage for prescription drugs, may provide coverage for prescription drugs in the state if
such coverage would duplicate the services provided by the universal prescription drug
program. Nothing in this chapter precludes a health plan company from offering optional
supplementary coverage for brand-name prescription drugs.
new text end

new text begin Subd. 3. new text end

new text begin Prescription drug bulk purchasing. new text end

new text begin (a) By July 1, 2011, the
commissioner shall provide prescription drugs to all Minnesota residents, regardless
of income, and with no co-pays.
new text end

new text begin (b) By July 1, 2011, the commissioner shall establish and administer a prescription
drug bulk purchasing program to provide drugs purchased through the program to
residents through participating pharmacies. To administer the bulk purchasing program
the commissioner shall:
new text end

new text begin (1) negotiate the prices of all prescription drugs purchased under the program unless
purchased as part of a regional bulk purchasing consortium under clause (2); and
new text end

new text begin (2) work with other interested states, and enter into agreements with one or more
states, to expand bulk purchasing into a regional bulk purchasing consortium.
new text end

new text begin (c) By January 1, 2010, the commissioner shall present an implementation plan
under the mandated reporting requirements in section 3.195, including any draft legislation
needed to implement prescription drug bulk purchasing under this chapter by July 1, 2011.
The implementation plan must include recommendations for program changes necessary
to increase savings to units of state government, Minnesota residents, and participating
pharmacies, or to reduce administrative costs.
new text end

new text begin Subd. 4. new text end

new text begin Definitions. new text end

new text begin For purposes of this chapter, the following terms have the
meanings given them.
new text end

new text begin (a) "Commissioner" means the commissioner of human services.
new text end

new text begin (b) "Covered prescription drug" means a prescription drug as defined in section
151.44, paragraph (d), that is listed in the Medicaid drug formulary as described in
section 256B.0625, subdivision 13, and is provided by the universal prescription drug
program under this section. Only generic prescription drugs, where available, are covered
prescription drugs, except where the provider indicates that the generic drug has been
tried and failed.
new text end

new text begin (c) "Health plan company" means any of the following:
new text end

new text begin (1) an insurance company licensed under chapter 60A to offer, sell, or issue an
individual or group policy of accident and sickness insurance as defined in section 62A.01;
new text end

new text begin (2) a nonprofit health service plan corporation operating under chapter 62C;
new text end

new text begin (3) a health maintenance organization operating under chapter 62D;
new text end

new text begin (4) a joint self-insurance employer health plan operating under chapter 62H;
new text end

new text begin (5) a community integrated service network licensed under chapter 62N;
new text end

new text begin (6) a fraternal benefit society operating under chapter 64B;
new text end

new text begin (7) a city, county, school district, or other political subdivision providing self-insured
health coverage under sections 471.617 or 471.98 to 471.982; and
new text end

new text begin (8) a self-funded health plan under the federal Employee Retirement Income
Security Act of 1974, as amended.
new text end

new text begin (d) "Participating pharmacy" means a pharmacy as defined in section 151.01,
subdivision 2, that agrees to participate in the prescription drug benefit program.
new text end

new text begin Subd. 5. new text end

new text begin Eligibility. new text end

new text begin (a) All permanent Minnesota residents, as defined in section
256L.09, subdivision 4, are presumed eligible for the universal prescription drug
program, except to the extent provided under paragraph (b). Eligibility is established
by an individual presenting a Minnesota driver's license or state identification card to a
participating pharmacy at the point of sale. Unmarried, unemancipated minors must be
deemed to have the residency of the minor's parent or guardian. If a minor's parents are
deceased and a legal guardian has not been appointed, or if a minor has been emancipated
by court order, the minor shall establish residency by presentation of a Minnesota driver's
license or state identification card. The commissioner shall not implement an application
process to determine eligibility for the universal prescription drug program, however the
commissioner shall establish guidelines to prevent an influx of persons to the state for the
purpose of obtaining prescription drug coverage.
new text end

new text begin (b) In the event federal waivers cannot be obtained under section 256O.02, paragraph
(a), clause (2):
new text end

new text begin (1) an individual is ineligible for the universal prescription drug program who is
enrolled in and has prescription drug coverage currently available under a Medicare
supplement policy, as defined in sections 62A.31 to 62A.44, or policies, contracts, or
certificates that supplement Medicare issued by health maintenance organizations or those
policies, contracts, or certificates governed by section 1833 or 1876 of the federal Social
Security Act, United States Code, title 42, section 1395, et seq., as amended; and
new text end

new text begin (2) an individual who is enrolled in a Medicare Part D prescription drug plan
or Medicare Advantage plan is eligible for the program but only for drugs that are not
covered under that individual's plan or for those prescription drugs which, according to the
conditions of the plan, the individual is responsible for 100 percent of the cost.
new text end

new text begin Subd. 6. new text end

new text begin Participating pharmacy. new text end

new text begin (a) Upon implementation of the prescription
drug bulk purchasing program under subdivision 3, a participating pharmacy, with a
valid prescription, shall provide a covered prescription drug to an individual eligible
under subdivision 5.
new text end

new text begin (b) Each participating pharmacy shall provide the commissioner with all information
necessary to administer the program, including, but not limited to, information on
prescription drug sales to individuals and usual and customary retail prices.
new text end

new text begin Subd. 7. new text end

new text begin Payment to pharmacies. new text end

new text begin Upon implementation of the universal
prescription drug program under this chapter, the commissioner shall distribute to
participating pharmacies on a biweekly basis:
new text end

new text begin (1) a reasonable switch fee that covers expenses incurred by participating pharmacies
in formatting for electronic claims for prescription drugs provided to enrolled individuals;
new text end

new text begin (2) a reasonable dispensing fee that covers expenses incurred by participating
pharmacies related to the sale of drugs to the enrolled individuals; and
new text end

new text begin (3) a usual and customary retail profit margin.
new text end

new text begin Subd. 8. new text end

new text begin Dedicated fund; creation; use of fund. new text end

new text begin (a) The universal prescription
drug program special revenue fund is established as an account in the state treasury. The
commissioner of finance shall credit to the fund any subrogation claims paid under section
256O.03, any federal funds received for the program, and any appropriations or allocations
designated for the fund. The commissioner of finance shall ensure that fund money is
invested under section 11A.25. All money earned by the fund must be credited to the fund.
The fund must earn a proportionate share of the total state annual investment income.
new text end

new text begin (b) Money in the fund is appropriated to the commissioner to reimburse participating
pharmacies under subdivision 7, to reimburse the commissioner for other reasonable
actuarial and administrative costs related to administration of the universal prescription
drug program, and to repay the appropriation provided by law for this section. Any
excess funds in the fund are to remain in the fund for the purposes of these costs. The
commissioner shall administer the program so that the costs total no more than funds
appropriated.
new text end

new text begin (c) The purpose of the universal prescription drug program fund is to finance the
universal prescription drug program established under this chapter. Money in the fund
must be used solely for this purpose. Any transfers from the universal prescription drug
program fund that are not directly related to the financing of the universal prescription
drug program are prohibited.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 2.

new text begin [256O.02] UNIVERSAL PRESCRIPTION DRUG PROGRAM MERGER
SCHEDULE.
new text end

new text begin (a) The commissioner shall:
new text end

new text begin (1) by January 1, 2010, present an implementation plan under the mandated reporting
requirements in section 3.195, including any draft legislation needed to merge the
universal prescription drug program with other state programs which provide duplicative
prescription drug coverage, including medical assistance to the extent permitted under
federal law, and retirees with retiree prescription drug benefits. The merger shall be fully
implemented by July 1, 2011, and done in a way that does not diminish the coverage
provided to participants in existing programs and without increasing the financial
obligations of providers that currently serve participants in these programs; and
new text end

new text begin (2) seek any federal waivers necessary to implement the universal prescription drug
program by July 1, 2010, including a pharmacy plus waiver as described in Public Law
110-28, section 7002(c).
new text end

new text begin (b) The commissioner shall assist persons who are displaced from employment
as a result of the initiation of the prescription drug program, including determining the
period of time during which assistance must be provided and identifying sources of
funds, including dislocated worker program funds and health insurance funds, to support
retraining and job placement. Assistance under this paragraph must be provided for a
period of up to five years from the date that this section becomes effective.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 3.

new text begin [256O.03] SUBROGATION.
new text end

new text begin Subdivision 1. new text end

new text begin Collateral source. new text end

new text begin (a) When all other payers for prescription drug
coverage have been terminated, prescription drug costs shall be collected from collateral
sources whenever prescription drugs provided to an individual are, or may be, covered
services under a policy of insurance, or other collateral source available to that individual,
or when the individual has a right of action for compensation permitted under law.
new text end

new text begin (b) As used in this section, collateral source includes:
new text end

new text begin (1) insurance policies written by insurers, including the medical components of
automobile, homeowners, and other forms of insurance;
new text end

new text begin (2) pension plans;
new text end

new text begin (3) employers;
new text end

new text begin (4) employee benefit contracts;
new text end

new text begin (5) government benefit programs;
new text end

new text begin (6) a judgment for damages for personal injury; and
new text end

new text begin (7) any third party who is or may be liable to an individual for health care services
or costs.
new text end

new text begin (c) Collateral source does not include:
new text end

new text begin (1) a contract or plan that is subject to federal preemption; or
new text end

new text begin (2) any governmental unit, agency, or service, to the extent that subrogation
is prohibited by law. An entity described in paragraph (b) is not excluded from the
obligations imposed by this section by virtue of a contract or relationship with a
governmental unit, agency, or service.
new text end

new text begin (d) The commissioner shall negotiate waivers, seek federal legislation, or make other
arrangements to incorporate collateral sources in the state into the universal prescription
drug program.
new text end

new text begin Subd. 2. new text end

new text begin Collateral source; negotiation. new text end

new text begin Whenever an individual receives
prescription drugs under the universal prescription drug program, and is entitled to
coverage, reimbursement, indemnity, or other compensation from a collateral source, the
individual shall notify the participating pharmacy and provide information identifying
the collateral source, the nature and extent of coverage or entitlement, and other
relevant information. The participating pharmacy shall forward this information to the
commissioner. The individual entitled to coverage, reimbursement, indemnity, or other
compensation from a collateral source shall provide additional information as requested
by the commissioner.
new text end

new text begin Subd. 3. new text end

new text begin Reimbursement. new text end

new text begin (a) The commissioner shall seek reimbursement from
the collateral source for services provided to the individual and may institute appropriate
action, including legal proceedings, to recover the reimbursement. Upon demand,
the collateral source shall pay to the commissioner the sums it would have paid or
expended on behalf of the individual for the prescription drugs provided by the universal
prescription drug program.
new text end

new text begin (b) In addition to any other right to recovery provided in this section, the
commissioner shall have the same right to recover the reasonable value of benefits from a
collateral source as provided under section 256B.37.
new text end

new text begin (c) If a collateral source is exempt from subrogation or the obligation to reimburse
the universal prescription drug program in this section, the commissioner may require that
an individual who is entitled to prescription drug coverage from the source first seek those
services from that source before seeking those services from the universal prescription
drug program.
new text end

new text begin (d) To the extent permitted by federal law, contractual retiree prescription drug
benefits provided by employers shall be subject to the same subrogation as other contracts,
allowing the universal prescription drug program to recover the cost of services provided
to individuals covered by the retiree benefits, unless and until arrangements are made to
transfer the revenues of the benefits directly to the universal prescription drug program.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4. new text begin APPROPRIATION.
new text end

new text begin $....... is appropriated from the general fund to the commissioner of human services
for the biennium beginning July 1, 2009, for the universal prescription drug program
under Minnesota Statutes, chapter 256O.
new text end