Senate Bill S3963A

                                BILL NUMBER:S3963

TITLE OF BILL:  An act to amend the elder law and the social services
law, in relation to dispensing fees paid to pharmacies in EPIC and
Medicaid

PURPOSE OR GENERAL IDEA OF BILL:  This bill provides for the
dispensing fee paid per prescription.

SUMMARY OF SPECIFIC PROVISIONS:

Section One of the bill amends paragraph (c) of subdivision 1 of
section 250 of elder law related to the dispensing fee paid to
pharmacies for every prescription filled under EPIC program. This bill
adds a new provision related to the dispensing fee paid to pharmacies
required to dispense medications in unit-of-use packaging.

Section two of the bill amends subparagraphs (i) and (ii) of paragraph
(d) of subdivision 9 of section 367-a of the social services law, as
amended by chapter 19 of the laws of 1998 related to the dispensing
fee paid to pharmacies for every prescription filled for persons
eligible to participate in the Medicaid program. The bill adds a new
subparagraph (iii) related to the dispensing fee paid to pharmacies
required to dispense medications in unit-of-use packaging.

JUSTIFICATION:  Given the high costs of doing business in this state,
              

publicly-financed prescription benefit programs such as Medicaid and
EPIC should not reimburse pharmacies at a rate lower than every other
state that has enacted deeply discounted product reimbursement
policies.

The actual cost of dispensing a prescription to a beneficiary in the
New York Medicaid program ranges between $8.79 and $14.04 according to
the survey conducted by Grant Thorton released in January, 2007.  We
apply the same survey results to dispensing fees paid under EPIC.
With the high costs of living and doing business, New York's Medicaid
and EPIC programs should not reimburse pharmacies at the very lowest
level in the country. Doing so may reduce the pharmacy provider
network to unacceptable levels. Should that occur, both programs will
fail in their primary objective, to deliver medically necessary
healthcare of acceptable quality cost containment parameters.

Although the legislature has restored millions to the cuts proposed by
the executive over the course of the past decade, every state budget
has nevertheless left pharmacy providers with less reimbursement than
in the previous year. Virtually every health care provider in the
Medicaid program has faced regular decreases in reimbursement, but no
other provider category has been subject to the cumulative percentage
reductions as have the state's pharmacies.

Pharmacies that provide prescription services for residents in
long-term care facilities and other forms of residential care incur
additional expense associated with preparing "blister packs" and other
forms of unit-of-use packaging that are required by regulation.  This
special packaging provides additional security against misuse or
overuse and enhances patient compliance that in turn reduces


unnecessary Medicaid spending associated with medication errors or
inappropriate use. The differential in the legislation is also based
on policies adopted by other states.

PRIOR LEGISLATIVE HISTORY:  2011-2012: S. 1267-A - Referred to Aging

FISCAL IMPLICATIONS:  None. The changes proposed in this legislation
are possible in the context of the funds appropriated for spending on
the pharmacy benefit.

First of all, national trends suggest that the rate of growth in
spending for prescription drugs has slowed. The proposed 6% increase
in the cost of the benefit is likely to be much lower.

Second, the proposed spending on prescription drugs does not take into
account the additional supplemental rebates generated by preferred
drug programs. In 2006 when the PDP was first implemented, the program
generated $30.5 million.

Third, although the dispensing fees in this bill appear to be the same
for brands and generics, differences in co-payments actually provide
pharmacy with a slight higher fee for dispensing generic drugs.

EFFECTIVE DATE:  April 1, 2013, with provisions.