SF 3022

as introduced - 90th Legislature (2017 - 2018) Posted on 03/09/2018 08:48am

A bill for an act
relating to health care; requiring the commissioner of human services to develop
a process to identify and report 340B drugs; permitting federally qualified health
centers to submit claims for payment directly to the commissioner of human
services; appropriating money for subsidies to federally qualified health centers;
amending Minnesota Statutes 2016, section 256B.0625, subdivisions 13, 30.

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. Over-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).

(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.

new text begin (g) Notwithstanding paragraph (f), effective January 1, 2018, medical assistance shall
cover drugs acquired through the federal 340B Drug Pricing Program and dispensed by a
340B contract pharmacy to a patient of a federally qualified health center as defined in
section 145.9269, subdivision 1.
new text end

Sec. 2.

Minnesota Statutes 2016, section 256B.0625, subdivision 30, is amended to read:

Subd. 30.

Other clinic services.

(a) Medical assistance covers rural health clinic services,
federally qualified health center services, nonprofit community health clinic services, and
public health clinic services. Rural health clinic services and federally qualified health center
services mean services defined in United States Code, title 42, section 1396d(a)(2)(B) and
(C). Payment for rural health clinic and federally qualified health center services shall be
made according to applicable federal law and regulation.

(b) A federally qualified health center that is beginning initial operation shall submit an
estimate of budgeted costs and visits for the initial reporting period in the form and detail
required by the commissioner. A federally qualified health center that is already in operation
shall submit an initial report using actual costs and visits for the initial reporting period.
Within 90 days of the end of its reporting period, a federally qualified health center shall
submit, in the form and detail required by the commissioner, a report of its operations,
including allowable costs actually incurred for the period and the actual number of visits
for services furnished during the period, and other information required by the commissioner.
Federally qualified health centers that file Medicare cost reports shall provide the
commissioner with a copy of the most recent Medicare cost report filed with the Medicare
program intermediary for the reporting year which support the costs claimed on their cost
report to the state.

(c) In order to continue cost-based payment under the medical assistance program
according to paragraphs (a) and (b), a federally qualified health center or rural health clinic
must apply for designation as an essential community provider within six months of final
adoption of rules by the Department of Health according to section 62Q.19, subdivision 7.
For those federally qualified health centers and rural health clinics that have applied for
essential community provider status within the six-month time prescribed, medical assistance
payments will continue to be made according to paragraphs (a) and (b) for the first three
years after application. For federally qualified health centers and rural health clinics that
either do not apply within the time specified above or who have had essential community
provider status for three years, medical assistance payments for health services provided
by these entities shall be according to the same rates and conditions applicable to the same
service provided by health care providers that are not federally qualified health centers or
rural health clinics.

(d) Effective July 1, 1999, the provisions of paragraph (c) requiring a federally qualified
health center or a rural health clinic to make application for an essential community provider
designation in order to have cost-based payments made according to paragraphs (a) and (b)
no longer apply.

(e) Effective January 1, 2000, payments made according to paragraphs (a) and (b) shall
be limited to the cost phase-out schedule of the Balanced Budget Act of 1997.

(f) Effective January 1, 2001, each federally qualified health center and rural health
clinic may elect to be paid either under the prospective payment system established in United
States Code, title 42, section 1396a(aa), or under an alternative payment methodology
consistent with the requirements of United States Code, title 42, section 1396a(aa), and
approved by the Centers for Medicare and Medicaid Services. The alternative payment
methodology shall be 100 percent of cost as determined according to Medicare cost
principles.

(g) For purposes of this section, "nonprofit community clinic" is a clinic that:

(1) has nonprofit status as specified in chapter 317A;

(2) has tax exempt status as provided in Internal Revenue Code, section 501(c)(3);

(3) is established to provide health services to low-income population groups, uninsured,
high-risk and special needs populations, underserved and other special needs populations;

(4) employs professional staff at least one-half of which are familiar with the cultural
background of their clients;

(5) charges for services on a sliding fee scale designed to provide assistance to
low-income clients based on current poverty income guidelines and family size; and

(6) does not restrict access or services because of a client's financial limitations or public
assistance status and provides no-cost care as needed.

(h) Effective for services provided on or after January 1, 2015, all claims for payment
of clinic services provided by federally qualified health centers and rural health clinics shall
be paid by the commissioner. new text begin Effective for services provided on or after January 1, 2015,
through July 1, 2018, new text end the commissioner shall determine the most feasible method for paying
claims from the following options:

(1) federally qualified health centers and rural health clinics submit claims directly to
the commissioner for payment, and the commissioner provides claims information for
recipients enrolled in a managed care or county-based purchasing plan to the plan, on a
regular basis; or

(2) federally qualified health centers and rural health clinics submit claims for recipients
enrolled in a managed care or county-based purchasing plan to the plan, and those claims
are submitted by the plan to the commissioner for payment to the clinic.

new text begin Effective for services provided on or after July 1, 2018, federally qualified health centers
and rural health clinics shall submit claims directly to the commissioner for payment and
the commissioner shall provide claims information for recipients enrolled in a managed
care plan or county-based purchasing plan to the plan on a regular basis to be determined
by the commissioner.
new text end

(i) For clinic services provided prior to January 1, 2015, the commissioner shall calculate
and pay monthly the proposed managed care supplemental payments to clinics, and clinics
shall conduct a timely review of the payment calculation data in order to finalize all
supplemental payments in accordance with federal law. Any issues arising from a clinic's
review must be reported to the commissioner by January 1, 2017. Upon final agreement
between the commissioner and a clinic on issues identified under this subdivision, and in
accordance with United States Code, title 42, section 1396a(bb), no supplemental payments
for managed care plan or county-based purchasing plan claims for services provided prior
to January 1, 2015, shall be made after June 30, 2017. If the commissioner and clinics are
unable to resolve issues under this subdivision, the parties shall submit the dispute to the
arbitration process under section 14.57.

(j) The commissioner shall seek a federal waiver, authorized under section 1115 of the
Social Security Act, to obtain federal financial participation at the 100 percent federal
matching percentage available to facilities of the Indian Health Service or tribal organization
in accordance with section 1905(b) of the Social Security Act for expenditures made to
organizations dually certified under Title V of the Indian Health Care Improvement Act,
Public Law 94-437, and as a federally qualified health center under paragraph (a) that
provides services to American Indian and Alaskan Native individuals eligible for services
under this subdivision.

Sec. 3. new text begin ENCOUNTER REPORTING OF 340B ELIGIBLE DRUGS.
new text end

new text begin (a) By January 1, 2019, the commissioner of human services, in consultation with
federally qualified health centers, shall develop a process to identify and report at point of
sale the 340B drugs that are dispensed to enrollees of managed care organizations who are
patients of a federally qualified health center in order to exclude these claims from the
Medicaid drug rebate program. In developing this process, the commissioner shall work
with federally qualified health centers, managed care organizations, and contract pharmacies
to ensure federally qualified health centers are allowed to maximize the 340B Drug Pricing
Program discounts when a federally qualified health center utilizes contract pharmacies for
patients enrolled in the prepaid medical assistance program, while ensuring that duplicate
discounts for these drugs do not occur.
new text end

new text begin (b) The commissioner shall inform the chairs and ranking minority members of the
legislative committees with jurisdiction over medical assistance once the process described
in paragraph (a) has been developed or, in the alternative, the reasons why this process could
not be developed as required.
new text end

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

new text begin $2,000,000 in fiscal year 2019 is appropriated from the general fund to the commissioner
of health to distribute as subsidies to federally qualified health centers under Minnesota
Statutes, section 145.9269.
new text end