Assembly Bill A8782

2009-2010 Legislative Session

Directs the department of health to evaluate and report on Medicaid prescription drug reimbursement to retail pharmacies

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Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 11, 2010	referred to health delivered to senate passed assembly
Jan 12, 2010	amended on third reading 8782a
Jan 06, 2010	ordered to third reading cal.623 returned to assembly died in senate
Jun 18, 2009	referred to rules
Jun 17, 2009	delivered to senate passed assembly ordered to third reading rules cal.413 rules report cal.413 reported
Jun 16, 2009	reported referred to rules
Jun 15, 2009	reported referred to ways and means
Jun 08, 2009	referred to health

Bill Amendments

Original

A (Active)

co-Sponsors

2009-A8782 - Details

Current Committee:: Senate Health
Law Section:: Health
Versions Introduced in 2011-2012 Legislative Session:: A4534

2009-A8782 - Summary

Directs the department of health to evaluate and report on Medicaid prescription drug reimbursement to retail pharmacies; creates a workgroup to conduct study and report findings to the legislature concerning the effect of reimbursement methodology on costs.

2009-A8782 - Sponsor Memo

                                BILL NUMBER:A8782

TITLE  OF  BILL:   An act to direct the department of health to evaluate
and report on Medicaid prescription drug reimbursement to retail pharma-
cies

PURPOSE OR GENERAL IDEA OF BILL: This bill  directs  the  Department  of
Health  to  evaluate and report on Medicaid prescription drug reimburse-
ment to retail pharmacies.

SUMMARY OF SPECIFIC PROVISIONS: Section one of the bill creates a  work-
group  within  the  Department  of  Health to assist the Commissioner of
Health in studying Medicaid prescription drug  reimbursement  to  retail
pharmacies. Section two provides for what shall be analyzed by the work-
ing  group. Section three requires the Commissioner of Health to issue a
report to the Governor and the Legislature. Section four sets forth  the
effective date,

JUSTIFICATION:    It  has  become  important for the legislature to have
access to factual information on which to base policy and  budget  deci-
sions  with  regard to payments to pharmacies. This legislation requires
the Health Department, working with representatives of organized pharma-
cy and other stakeholders, to gather information and prepare a report to
inform about the adequacy of present reimbursement in  terms  of  actual
costs both for medications and professional services.

Compounding  the pharmacy reimbursement matter further is the use of the
term 'Average Wholesale Price' (AWP) that,  combined  with  a  discount,
forms  the payment formula for brand drugs. For generics, New York State
law allows the Department of Health to calculate State Maximum Allowable
Cost' (SMAC). Pharmacies report that SMAC pricing is not  based  on  any
known  methodology  and  it  brings  payment levels unrealistically low.
Access to generics is an important key to  cost-containment  strategies,
and reimbursement policies should be set appropriately.

As  enumerated in this legislation, pharmacy overhead costs cover a wide
range of elements that must be considered as part of a fair and  reason-
able  payment  standard.  For consumers, the professional service compo-
nents may represent the real value of having a local  pharmacy  with  an
accessible pharmacist, who has filled the prescription, checked for drug
interactions and can provide important information about how to take the
medicine  prescribed  for  them.  In  this time of limited resources, it
becomes more important that our Medicaid and EPIC  beneficiaries  derive
the  maximum  therapeutic benefit from the medicines they are prescribed
so that they can remain at home living independently as long  as  possi-
ble. Local pharmacies represent healthcare outreach into communities and
a valuable cost-containment strategy.

PRIOR LEGISLATIVE HISTORY: This is a new bill.

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: Immediately.

2009-A8782 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  8782

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              June 8, 2009
                               ___________

Introduced  by  M.  of  A.  DESTITO, GOTTFRIED, PHEFFER -- read once and
  referred to the Committee on Health

AN ACT to direct the department of health  to  evaluate  and  report  on
  Medicaid prescription drug reimbursement to retail pharmacies

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The commissioner of health shall establish in  the  depart-
ment  of health a Medicaid pharmacy reimbursement workgroup (referred to
in this act as the "workgroup") for the purpose of assisting the commis-
sioner of health in studying Medicaid prescription drug reimbursement to
retail pharmacies. The workgroup shall consist  of  16  members,  to  be
appointed  as  follows:  4 members shall be appointed by the governor, 3
members shall be appointed by the speaker of  the  assembly,  3  members
shall  be  appointed  by the temporary president of the senate, 1 member
shall be appointed by the minority leader of the senate,  and  1  member
shall be appointed by the minority leader of the assembly. The chairs of
the assembly and senate fiscal and health committees, or their designees
shall  serve  as ex-officio members. The work group shall include: (a) 3
representatives of organizations of chain and independent retail pharma-
cies, 3 prescription drug manufacturers and wholesalers, 2 advocates for
Medicaid recipients, and other stakeholders; (b) 2 appropriate officials
of the department of health; and (c) 2 academic  or  other  professional
experts on prescription drug reimbursement.
  S 2. 1. The workgroup's study shall include but need not be limited to
an analysis of:
  (a)  how  the current reimbursement methodology relates to pharmacies'
actual costs for wholesale purchasing of drugs and  dispensing  Medicaid
prescriptions,  including  but  not limited to inventory acquisition and
management, payroll costs,  employee  benefits,  professional  liability
insurance,  licenses and other fees, professional services such as coor-
dination of benefits, patient counseling and prescription verifications,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11995-04-9

A. 8782                             2

facility costs including rent, mortgage interest, insurance, real estate
taxes, utilities, maintenance, permits and delivery  expenses,  contain-
ers, labels and supplies, specialized packaging, transaction fees, tele-
phone, data management, computer systems and support, bad debt including
uncollected co-pays, and payment lag times;
  (b)  the  comparative  merits  of  reimbursement methodologies used in
other states or allowed by the Federal government;
  (c) the effect of New York's current and possible alternative  method-
ologies on the financial viability of pharmacies, access to prescription
drugs  for  Medicaid recipients, controlling wholesale prices, and costs
to the Medicaid system;
  (d) the actual cost to New York of the  pharmacy  benefit  considering
the  total  amount paid to pharmacies after federal participation, minus
the total amount collected by New York in  rebates  from  pharmaceutical
manufacturers,  and  separately identifying product costs and dispensing
fees.
  2. The department of health and other  state  agencies  shall  provide
assistance to the workgroup in conducting its work. Members of the work-
group  shall receive no compensation for their service as members of the
workgroup but may receive reimbursement for their reasonable and  neces-
sary  expenses  incurred  in  connection with their participation in the
workgroup. A public official or employee may serve as a  member  of  the
workgroup.
  S  3.  The  commissioner of health shall report his or her preliminary
findings and recommendations  relating  to  Medicaid  prescription  drug
reimbursement  to  retail pharmacies to the governor and the legislature
no later than January 1, 2010, and  may  provide  further  findings  and
recommendations thereafter.
  S 4. This act shall take effect immediately.

co-Sponsors

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multi-Sponsors

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2009-A8782A (ACTIVE) - Details

Current Committee:: Senate Health
Law Section:: Health
Versions Introduced in 2011-2012 Legislative Session:: A4534

2009-A8782A (ACTIVE) - Summary

2009-A8782A (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A8782A

TITLE  OF  BILL:   An act to direct the department of health to evaluate
and report on Medicaid prescription drug reimbursement to retail pharma-
cies

PURPOSE OR GENERAL IDEA OF BILL: This bill  directs  the  Department  of
Health  to  evaluate and report on Medicaid prescription drug reimburse-
ment to retail pharmacies.

SUMMARY OF SPECIFIC PROVISIONS: Section one of the bill creates a  work-
group  within  the  Department  of  Health to assist the Commissioner of
Health in studying Medicaid prescription drug  reimbursement  to  retail
pharmacies.  Section two outlines the different factors to be considered
in the study. Section three requires the Commissioner of Health to issue
a report to the Governor and the Legislature. Section  four  sets  forth
the effective date.

JUSTIFICATION:    It  has  become  important for the legislature to have
access to factual information on which to base policy and  budget  deci-
sions  with  regard to payments to pharmacies. This legislation requires
the Health Department, working with representatives of organized pharma-
cy and other stakeholders, to gather information and prepare a report to
inform about the adequacy of present reimbursement in  terms  of  actual
costs both for medications and professional services.

Compounding  the pharmacy reimbursement matter further is the use of the
term 'Average Wholesale Price' (AWP) that,  combined  with  a  discount,
forms  the payment formula for brand drugs. For generics, New York State
law allows the Department of Health to calculate 'State  Maximum  Allow-
able  Cost'  (SMAC). Pharmacies report that SMAC pricing is not based on
any known methodology and it brings payment levels unrealistically  low.
Access  to  generics is an important key to our cost-containment strate-
gies, and we should have confidence that our reimbursement policy is set
appropriately.

As enumerated in this legislation, pharmacy overhead costs cover a  wide
range  of elements that must be considered as part of a fair and reason-
able payment standard. For consumers, the  professional  service  compo-
nents  may  represent  the real value of having a local pharmacy with an
accessible pharmacist, who has filled the prescription, checked for drug
interactions and can provide important information about how to take the
medicine prescribed for them. In this  time  of  limited  resources,  it
becomes  more  important that our Medicaid and EPIC beneficiaries derive
the maximum therapeutic benefit from the medicines they  are  prescribed
so  that  they can remain at home living independently as long as possi-
ble. Local pharmacies represent healthcare outreach into communities and
a valuable cost-containment strategy.

PRIOR LEGISLATIVE HISTORY: 2009: A.8782 - Passed Assembly.

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: Immediately.

2009-A8782A (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 8782--A
                                                        Cal. No. 623

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              June 8, 2009
                               ___________

Introduced  by  M.  of  A.  DESTITO, GOTTFRIED, PHEFFER, REILLY, CASTRO,
  CHRISTENSEN, ESPAILLAT, JAFFEE, GIBSON, KOON,  GUNTHER,  GALEF,  COOK,
  ROSENTHAL,  PERRY,  ORTIZ  --  Multi-Sponsored by -- M. of A. BRENNAN,
  DelMONTE, HOOPER, JOHN, MAYERSOHN, MENG, SCHIMEL, WEISENBERG  --  read
  once  and referred to the Committee on Health -- reported from commit-
  tee, advanced to a  third  reading,  amended  and  ordered  reprinted,
  retaining its place on the order of third reading

AN  ACT  to  direct  the  department of health to evaluate and report on
  Medicaid prescription drug reimbursement to retail pharmacies

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The commissioner of health shall establish in the depart-
ment of health a Medicaid pharmacy reimbursement workgroup (referred  to
in this act as the "workgroup") for the purpose of assisting the commis-
sioner of health in studying Medicaid prescription drug reimbursement to
retail  pharmacies.  The  workgroup  shall  consist of 16 members, to be
appointed as follows: 4 members shall be appointed by  the  governor,  3
members  shall  be  appointed  by the speaker of the assembly, 3 members
shall be appointed by the temporary president of the  senate,  1  member
shall  be  appointed  by the minority leader of the senate, and 1 member
shall be appointed by the minority leader of the assembly. The chairs of
the assembly and senate fiscal and health committees, or their designees
shall serve as ex-officio members. The work group shall include:  (a)  3
representatives of organizations of chain and independent retail pharma-
cies, 3 prescription drug manufacturers and wholesalers, 2 advocates for
Medicaid recipients, and other stakeholders; (b) 2 appropriate officials
of  the  department  of health; and (c) 2 academic or other professional
experts on prescription drug reimbursement.
  S 2. 1. The workgroup's study shall include but need not be limited to
an analysis of:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11995-05-0

A. 8782--A                          2

  (a) how the current reimbursement methodology relates  to  pharmacies'
actual  costs  for wholesale purchasing of drugs and dispensing Medicaid
prescriptions, including but not limited to  inventory  acquisition  and
management,  payroll  costs,  employee  benefits, professional liability
insurance,  licenses and other fees, professional services such as coor-
dination of benefits, patient counseling and prescription verifications,
facility costs including rent, mortgage interest, insurance, real estate
taxes, utilities, maintenance, permits and delivery  expenses,  contain-
ers, labels and supplies, specialized packaging, transaction fees, tele-
phone, data management, computer systems and support, bad debt including
uncollected co-pays, and payment lag times;
  (b)  the  comparative  merits  of  reimbursement methodologies used in
other states or allowed by the Federal government;
  (c) the effect of New York's current and possible alternative  method-
ologies on the financial viability of pharmacies, access to prescription
drugs  for  Medicaid recipients, controlling wholesale prices, and costs
to the Medicaid system;
  (d) the actual cost to New York of the  pharmacy  benefit  considering
the  total  amount paid to pharmacies after federal participation, minus
the total amount collected by New York in  rebates  from  pharmaceutical
manufacturers,  and  separately identifying product costs and dispensing
fees.
  2. The department of health and other  state  agencies  shall  provide
assistance to the workgroup in conducting its work. Members of the work-
group  shall receive no compensation for their service as members of the
workgroup but may receive reimbursement for their reasonable and  neces-
sary  expenses  incurred  in  connection with their participation in the
workgroup. A public official or employee may serve as a  member  of  the
workgroup.
  S  3.  The  commissioner of health shall report his or her preliminary
findings and recommendations  relating  to  Medicaid  prescription  drug
reimbursement  to  retail pharmacies to the governor and the legislature
no later than January first after this act shall have become a  law  and
may provide further findings and recommendations thereafter.
  S 4. This act shall take effect immediately.

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Assembly Bill A8782

Sponsored By

Archive: Last Bill Status - In Senate Committee Health Committee

Actions

Bill Amendments

co-Sponsors

2009-A8782 - Details

2009-A8782 - Summary

2009-A8782 - Sponsor Memo

2009-A8782 - Bill Text download pdf

co-Sponsors

multi-Sponsors

2009-A8782A (ACTIVE) - Details

2009-A8782A (ACTIVE) - Summary

2009-A8782A (ACTIVE) - Sponsor Memo

2009-A8782A (ACTIVE) - Bill Text download pdf

Comments

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Assembly Bill A8782

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Sponsored By

DESTITO

Archive: Last Bill Status - In Senate Committee Health Committee

Actions

Bill Amendments

co-Sponsors

Richard Gottfried

Audrey Pheffer

2009-A8782 - Details

2009-A8782 - Summary

2009-A8782 - Sponsor Memo

2009-A8782 - Bill Text download pdf

co-Sponsors

Richard Gottfried

Audrey Pheffer

Robert Reilly

Nelson Castro

multi-Sponsors

James F. Brennan

Daniel Burling

Francine DelMonte

Earlene Hooper

2009-A8782A (ACTIVE) - Details

2009-A8782A (ACTIVE) - Summary

2009-A8782A (ACTIVE) - Sponsor Memo

2009-A8782A (ACTIVE) - Bill Text download pdf

Comments