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Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  
    Laws of Minnesota 1993 

                        CHAPTER 246-S.F.No. 782 
           An act relating to health; expanding medical 
          assistance coverage to include nutritional 
          supplementation products; amending Minnesota Statutes 
          1992, section 256B.0625, subdivision 13, and by adding 
          a subdivision. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 256B.0625, 
subdivision 13, is amended to read: 
    Subd. 13.  [DRUGS.] (a) Medical assistance covers drugs if 
prescribed by a licensed practitioner and dispensed by a 
licensed pharmacist, or by a physician enrolled in the medical 
assistance program as a dispensing physician.  The commissioner, 
after receiving recommendations from the Minnesota Medical 
Association and the Minnesota Pharmacists Association, shall 
designate a formulary committee to advise the commissioner on 
the names of drugs for which payment is made, recommend a system 
for reimbursing providers on a set fee or charge basis rather 
than the present system, and develop methods encouraging use of 
generic drugs when they are less expensive and equally effective 
as trademark drugs.  The commissioner shall appoint the 
formulary committee members no later than 30 days following July 
1, 1981.  The formulary committee shall consist of nine members, 
four of whom shall be physicians who are not employed by the 
department of human services, and a majority of whose practice 
is for persons paying privately or through health insurance, 
three of whom shall be pharmacists who are not employed by the 
department of human services, and a majority of whose practice 
is for persons paying privately or through health insurance, a 
consumer representative, and a nursing home representative.  
Committee members shall serve two-year terms and shall serve 
without compensation.  
    (b) The commissioner shall establish a drug formulary.  Its 
establishment and publication shall not be subject to the 
requirements of the administrative procedure act, but the 
formulary committee shall review and comment on the formulary 
contents.  The formulary committee shall review and recommend 
drugs which require prior authorization.  The formulary 
committee may recommend drugs for prior authorization directly 
to the commissioner, as long as opportunity for public input is 
provided.  Prior authorization may be requested by the 
commissioner based on medical and clinical criteria before 
certain drugs are eligible for payment.  Before a drug may be 
considered for prior authorization at the request of the 
commissioner:  
    (1) the drug formulary committee must develop criteria to 
be used for identifying drugs; the development of these criteria 
is not subject to the requirements of chapter 14, but the 
formulary committee shall provide opportunity for public input 
in developing criteria; 
    (2) the drug formulary committee must hold a public forum 
and receive public comment for an additional 15 days; and 
    (3) the commissioner must provide information to the 
formulary committee on the impact that placing the drug on prior 
authorization will have on the quality of patient care and 
information regarding whether the drug is subject to clinical 
abuse or misuse.  Prior authorization may be required by the 
commissioner before certain formulary drugs are eligible for 
payment.  The formulary shall not include:  
    (i) drugs or products for which there is no federal 
funding; 
    (ii) over-the-counter drugs, except for antacids, 
acetaminophen, family planning products, aspirin, insulin, 
products for the treatment of lice, vitamins for adults with 
documented vitamin deficiencies, and vitamins for children under 
the age of seven and pregnant or nursing women; or any other 
over-the-counter drug identified by the commissioner, in 
consultation with the drug 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, the administrative procedure act; 
    nutritional products, except for those products needed for 
treatment of phenylketonuria, hyperlysinemia, maple syrup urine 
disease, a combined allergy to human milk, cow milk, and soy 
formula, or any other childhood or adult diseases, conditions, 
or disorders identified by the commissioner as requiring a 
similarly necessary nutritional product; 
    (iii) anorectics; and 
    (iv) drugs for which medical value has not been established.
    Nutritional products needed for the treatment of a combined 
allergy to human milk, cow's milk, and soy formula require prior 
authorization.  Separate payment shall not be made for 
nutritional products for residents of long-term care facilities; 
payment for dietary requirements is a component of the per diem 
rate paid to these facilities.  Payment to drug vendors shall 
not be modified before the formulary is established except that 
the commissioner shall not permit payment for any drugs which 
may not by law be included in the formulary, and the 
commissioner's determination shall not be subject to chapter 14, 
the administrative procedure act.  The commissioner shall 
publish conditions for prohibiting payment for specific drugs 
after considering the formulary committee's recommendations.  
    (b) (c) The basis for determining the amount of payment 
shall be the lower of the actual acquisition costs of the drugs 
plus a fixed dispensing fee established by the commissioner, the 
maximum allowable cost set by the federal government or by the 
commissioner plus the fixed dispensing fee or the usual and 
customary price charged to the public.  Actual acquisition cost 
includes quantity and other special discounts except time and 
cash discounts.  The actual acquisition cost of a drug may be 
estimated by the commissioner.  The maximum allowable cost of a 
multisource drug may be set by the commissioner and it shall be 
comparable to, but no higher than, the maximum amount paid by 
other third party payors in this state who have maximum 
allowable cost programs.  Establishment of the amount of payment 
for drugs shall not be subject to the requirements of the 
administrative procedure act.  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.  The pharmacy provider will be required to 
credit the department for the actual acquisition cost of all 
unused drugs that are eligible for reuse.  Over-the-counter 
medications must be dispensed in the manufacturer's unopened 
package.  The commissioner may permit the drug clozapine to be 
dispensed in a quantity that is less than a 30-day supply.  
Whenever a generically equivalent product is available, payment 
shall be on the basis of the actual acquisition cost of the 
generic drug, unless the prescriber specifically indicates 
"dispense as written - brand necessary" on the prescription as 
required by section 151.21, subdivision 2.  Implementation of 
any change in the fixed dispensing fee that has not been subject 
to the administrative procedure act is limited to not more than 
180 days, unless, during that time, the commissioner initiates 
rulemaking through the administrative procedure act. 
    (c) (d) Until January 4, 1993, or the date the Medicaid 
Management Information System (MMIS) upgrade is implemented, 
whichever occurs last, a pharmacy provider may require 
individuals who seek to become eligible for medical assistance 
under a one-month spend-down, as provided in section 256B.056, 
subdivision 5, to pay for services to the extent of the 
spend-down amount at the time the services are provided.  A 
pharmacy provider choosing this option shall file a medical 
assistance claim for the pharmacy services provided.  If medical 
assistance reimbursement is received for this claim, the 
pharmacy provider shall return to the individual the total 
amount paid by the individual for the pharmacy services 
reimbursed by the medical assistance program.  If the claim is 
not eligible for medical assistance reimbursement because of the 
provider's failure to comply with the provisions of the medical 
assistance program, the pharmacy provider shall refund to the 
individual the total amount paid by the individual.  Pharmacy 
providers may choose this option only if they apply similar 
credit restrictions to private pay or privately insured 
individuals.  A pharmacy provider choosing this option must 
inform individuals who seek to become eligible for medical 
assistance under a one-month spend-down of (1) their right to 
appeal the denial of services on the grounds that they have 
satisfied the spend-down requirement, and (2) their potential 
eligibility for the health right program or the children's 
health plan. 
     Sec. 2.  Minnesota Statutes 1992, section 256B.0625, is 
amended by adding a subdivision to read: 
    Subd. 32.  [NUTRITIONAL PRODUCTS.] (a) Medical assistance 
covers nutritional products needed for nutritional 
supplementation because solid food or nutrients thereof cannot 
be properly absorbed by the body or needed for treatment of 
phenylketonuria, hyperlysinemia, maple syrup urine disease, a 
combined allergy to human milk, cow's milk, and soy formula, or 
any other childhood or adult diseases, conditions, or disorders 
identified by the commissioner as requiring a similarly 
necessary nutritional product.  Nutritional products needed for 
the treatment of a combined allergy to human milk, cow's milk, 
and soy formula require prior authorization.  Separate payment 
shall not be made for nutritional products for residents of 
long-term care facilities.  Payment for dietary requirements is 
a component of the per diem rate paid to these facilities. 
    (b) The commissioner shall designate a nutritional 
supplementation products advisory committee to advise the 
commissioner on nutritional supplementation products for which 
payment is made.  The committee shall consist of nine members, 
one of whom shall be a physician, one of whom shall be a 
pharmacist, two of whom shall be registered dieticians, one of 
whom shall be a public health nurse, one of whom shall be a 
representative of a home health care agency, one of whom shall 
be a provider of long-term care services, and two of whom shall 
be consumers of nutritional supplementation products.  Committee 
members shall serve two-year terms and shall serve without 
compensation. 
    (c) The advisory committee shall review and recommend 
nutritional supplementation products which require prior 
authorization.  The commissioner shall develop procedures for 
the operation of the advisory committee so that the advisory 
committee operates in a manner parallel to the drug formulary 
committee. 
    Presented to the governor May 14, 1993 
    Signed by the governor May 17, 1993, 3:12 p.m.