SF 3240

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to human services; establishing a pharmacy payment reform advisory
committee; providing for a study; requiring a report to the legislature.

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

Section 1. new text begin PHARMACY PAYMENT REFORM ADVISORY COMMITTEE.
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new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following words, terms,
and phrases have the following meanings:
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new text begin (a) "Department" means the Department of Human Services.
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new text begin (b) "Commissioner" means the commissioner of the Department of Human Services.
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new text begin (c) "Cost of dispensing" includes, but is not limited to, operational and overhead
costs; professional counseling as required under the Omnibus Budget Reconciliation Act
of 1990, excluding medication management services under Minnesota Statutes, section
256B.0625, subdivision 13h; salaries; and other associated administrative costs, as well
as a reasonable return on investment. In addition, cost of dispensing includes expenses
transferred by wholesale drug distributors to pharmacies as a result of the wholesale drug
distributor tax under Minnesota Statutes, sections 295.52 to 295.582.
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new text begin (d) "Additional costs" include, but are not limited to, costs relating to coordination of
benefits, bad debt, uncollected co-pays, payment lag times, and high rate of rejected claims.
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new text begin (e) "Advisory committee" means the Pharmacy Payment Reform Advisory
Committee established by this section.
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new text begin Subd. 2. new text end

new text begin Advisory committee. new text end

new text begin The Pharmacy Payment Reform Advisory
Committee is established under the direction of the commissioner of human services.
The commissioner, after receiving recommendations from the Minnesota Pharmacists
Association, the Minnesota Retailers Association, the Minnesota Hospital Association,
and the Minnesota Wholesale Druggists Association, shall convene a pharmacy payment
reform advisory committee to advise the commissioner and make recommendations to the
legislature on implementation of pharmacy reforms contained in title VI, chapter IV, of
the Deficit Reduction Act of 2005. The committee shall be composed of three licensed
pharmacists representing both independent and chain pharmacy entities, one of whom
must have expertise in pharmacoeconomics, two individuals representing hospitals with
outpatient pharmacies, and two individuals with expertise in wholesale drug distribution.
The committee shall be staffed by an employee of the department who shall serve as an ex
officio nonvoting member of the committee. The department's pharmacy program manager
shall also serve as an ex officio, nonvoting member of the committee. The committee is
governed by Minnesota Statutes, section 15.059, except that committee members do not
receive compensation or reimbursement for expenses. The advisory committee members
shall serve a two-year term and the advisory committee will expire on January 31, 2008.
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new text begin Subd. 3. new text end

new text begin Cost of dispensing study. new text end

new text begin The department shall conduct a prescription
drug cost of dispensing study to determine the average cost of dispensing Medicaid
prescriptions in Minnesota. The department shall contract with an independent third
party in the state that has experience conducting business cost allocation studies, such as
an academic institution, to conduct a prescription drug cost of dispensing study. If no
independent third-party entity exists in the state, the department may contract with an
out-of-state entity. The cost of dispensing study shall be completed by an independent
third party no later than October 1, 2006, and reported to the department and the advisory
committee upon completion.
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new text begin Subd. 4. new text end

new text begin Content of study. new text end

new text begin The study shall determine the cost of dispensing
the average prescription and any additional costs that might be incurred for dispensing
Medicaid prescriptions. The study shall include the current level of dispensing fees paid
to providers and an estimate of revenues required to adequately adjust reimbursement
to cover the cost to pharmacies.
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new text begin Subd. 5. new text end

new text begin Methodology of study and publishing requirement. new text end

new text begin The independent
third-party entity performing the cost of dispensing research shall submit to the advisory
committee the entity's proposed research methodology and shall publish the collected data
to allow other independent researchers to validate the study results. The data shall be
published in a manner that does not identify the source of the data.
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new text begin Subd. 6. new text end

new text begin Recommendations. new text end

new text begin The advisory committee shall use the information
from the cost of dispensing study and make recommendations to the commissioner on
implementation of pharmacy reforms contained in title VI, chapter IV, of the Deficit
Reduction Act of 2005. The commissioner shall report the findings of the study and
the recommendations of the advisory committee to the legislature by January 15, 2007.
The department shall conduct a cost of dispensing study every three years following the
initial report. The commissioner, in consultation with the advisory committee, shall make
recommendations to the legislature on how to adequately adjust reimbursement rates to
pharmacies to cover the costs of dispensing and additional costs to pharmacies. Reports
shall include the current level of dispensing fees paid to providers and an estimate of
revenues required to adequately adjust reimbursement to ensure that:
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new text begin (1) reimbursement is sufficient to enlist an adequate number of participating
pharmacy providers so that pharmacy services are as available for Medicaid recipients
under the program as for the state's general population;
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new text begin (2) Medicaid dispensing fees are adequate to reimburse pharmacy providers for the
costs of dispensing prescriptions under the Medicaid program;
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new text begin (3) Medicaid pharmacy reimbursement for multiple-source drugs included on the
federal upper reimbursement limit is set at the level established by the federal government
under United States Code, title 42, section 1396r-8(e)(5);
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new text begin (4) the combined Medicaid program reimbursement for prescription drug product
and the dispensing fee provides a return adequate to provide a reasonable profit for the
participating pharmacy; and
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new text begin (5) the new payment system does not create disincentives for pharmacists to
dispense generic drugs.
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new text begin EFFECTIVE DATE. new text end

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