NY State Senate Bill 2019-S5923

Senate Bill S5923

2019-2020 Legislative Session

Relates to extending the preferred drug program to medicaid managed care providers and health plans; repealer

download bill text pdf

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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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to health
May 16, 2019	referred to health

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2019-S5923 (ACTIVE) - Details

See Assembly Version of this Bill:: A2795
Current Committee:: Senate Health
Law Section:: Social Services Law
Laws Affected:: Add §365-i, rpld §364-j subs 25 & 25-a, Soc Serv L; amd §§270 & 272, add §274-a, Pub Health L
Versions Introduced in Other Legislative Sessions:: 2015-2016: A9271
2017-2018: A4233

2019-S5923 (ACTIVE) - Summary

Extends the preferred drug program to medicaid managed care providers and offers the program to other health plans.

2019-S5923 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S5923

SPONSOR: RIVERA
 
TITLE OF BILL:  An act to amend the social services law and the public
health law, in relation to extending the preferred drug program to medi-
caid managed care providers and offering the program to other health
plans; and to repeal certain provisions of the social services law
relating thereto

 
PURPOSE OR GENERAL IDEA OF BILL:

To provide the Medicaid drug benefit through utilization of the
preferred drug program (PDP) under Public Health Law Art. 2-A, rather
than through individual Medicaid managed care plan drug benefits.

 
SUMMARY OF SPECIFIC PROVISIONS:

The Preferred Drug Program under Public Health Law Art. 2-A would admin-
ister the drug benefit for the whole Medicaid program, including negoti-
ating rebates with drug companies seeking to have their drugs on the
preferred drug list to avoid requiring private authorization.  In order

to have Medicaid managed care plans maintain accountability for drug
use, each plan would reimburse the state for the actual cost of drugs
provided to its patients, and the formula for the premium paid by the
state to the managed care plan would include a drug component. Health
plans not participating in Medicaid could contract with the Department
to use the PDP, in order to take advantage of the state's purchasing
power.

 
JUSTIFICATION:

The Preferred Drug Program was established in 2005. Under the PDP, the
clinical drug review board (DRB) evaluates the clinical effectiveness
and safety of drugs, the potential impact on patient care and on the
health of special populations considering the latest peer-reviewed
research. The DRB may place a drug or class of drugs either on the
preferred drug list (PDL) or require prior authorization, which if
declined, may be overcome using "prescriber prevails," so that a pres-
criber can make sure that the patient receives the needed medication.
The PDP initially administered the drug benefit for the whole Medicaid
program, including Medicaid managed care.

During the several years that the PDP operated for all Medicaid
patients, very few prescriptions were for non-preferred drugs because
(a) prescribers had confidence in the legitimacy of the list, (b) the
required consultation with the system was enough of a "speed bump" that
prescribers stuck to the list unless they felt strongly otherwise, and
drug companies were willing to pay the required rebates to get their
drugs on the list, at an estimated average of $2B per year.

In 2011, the Legislature enacted the Cuomo administration proposal to
end the carve-out and instead have each Medicaid managed care plan nego-
tiate on its own with drug companies. The administration insisted the
managed care plans could do a better job of negotiating, even though the
state was negotiating for a much larger population than any one managed
care plan. Now, each Medicaid managed care plan negotiates with drug
companies on its own for its own drug formulary, and has its own process
for authorizing coverage of a non-formulary drug for a patient. The

"prescriber prevails" rule only applies to a small group of drug classes
under Medicaid managed care.

This bill would restore to the PDP the power to negotiate drug prices
for the entire Medicaid population over six million "covered lives" - by
having the PDP administer the drug benefit. Medicaid would bill each
Medicaid managed care plan for the drugs provided to its enrollees. This
would be consistent with the notions of the DSRIP Medicaid reform,
moving to integrated care, care coordination, and "value-based" payment.
It would more effectively hold the managed care plan or provider network
accountable for the total cost of care, while still giving the health
plan (and the state) the benefit of lower drug prices.

The bill would permit the state to significantly increase its negotiat-
ing power with drug companies by inviting non-Medicaid health plans to
piggyback on the PDP. Each non-Medicaid plan would pay for its own drugs
and benefit from the PDP's reduced prices, and use the PDP prior
authorization/prescriber prevails process. The PDP would then be negoti-
ating not only for the whole Medicaid population but also for a share of
the non-Medicaid population, producing lower drug prices for all.

 
FISCAL IMPLICATIONS:

To be determined

 
EFFECTIVE DATE:
One hundred and eighty days after becoming law.

2019-S5923 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5923
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               May 16, 2019
                                ___________
 
 Introduced  by  Sen.  RIVERA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Health
 
 AN ACT to amend the social services law and the public  health  law,  in
   relation  to  extending the preferred drug program to medicaid managed
   care providers and offering the program to other health plans; and  to
   repeal certain provisions of the social services law relating thereto
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative findings. This legislature finds that the costs
 of many prescription drugs in the market have been escalating  unreason-
 ably.  The  preferred  drug program and the clinical drug review program
 under the public health law provide effective  mechanisms  for  assuring
 access  to  quality,  effective and safe drugs to patients at reasonable
 cost. Providing prescription  drugs  to  Medicaid  managed  health  care
 provider  participants through these programs will maximize the Medicaid
 program's ability  to  negotiate  more  substantial  rebates  with  drug
 manufacturers  (effectively,  lower  prices),  while protecting Medicaid
 managed care provider participants. Offering non-Medicaid  health  plans
 the  opportunity  to  use these programs will help lower costs for those
 health plans and those who pay their premiums, while protecting individ-
 uals covered by those plans, and will also further increase the  negoti-
 ating power of the programs.
   §  2. The social services law is amended by adding a new section 365-i
 to read as follows:
   § 365-I. PRESCRIPTION DRUGS IN MEDICAID MANAGED  CARE  PROGRAMS.    1.
 DEFINITIONS. (A) THE DEFINITIONS OF TERMS IN SECTION TWO HUNDRED SEVENTY
 OF THE PUBLIC HEALTH LAW SHALL APPLY TO THIS SECTION.
   (B)  AS  USED  IN  THIS  SECTION,  UNLESS THE CONTEXT CLEARLY REQUIRES
 OTHERWISE:
   (I) "MANAGED CARE  PROVIDER"  MEANS  A  MANAGED  CARE  PROVIDER  UNDER
 SECTION  THREE HUNDRED SIXTY-FOUR-J OF THIS ARTICLE, A MANAGED LONG TERM
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD03489-01-9

 S. 5923                             2
 
 CARE PLAN UNDER SECTION FORTY-FOUR HUNDRED THREE-F OF THE PUBLIC  HEALTH
 LAW,  OR ANY OTHER ENTITY THAT PROVIDES OR ARRANGES FOR THE PROVISION OF
 MEDICAL ASSISTANCE SERVICES AND SUPPLIES  TO  PARTICIPANTS  DIRECTLY  OR
 INDIRECTLY (INCLUDING BY REFERRAL), INCLUDING CASE MANAGEMENT, INCLUDING
 THE MANAGED CARE PROVIDER'S AUTHORIZED AGENTS.
   (II)  "PARTICIPANT" MEANS A MEDICAL ASSISTANCE RECIPIENT WHO RECEIVES,
 IS REQUIRED TO RECEIVE OR ELECTS TO RECEIVE HIS OR HER  MEDICAL  ASSIST-
 ANCE SERVICES FROM A MANAGED CARE PROVIDER.
   2.  PROVIDING  AND PAYMENT FOR PRESCRIPTION DRUGS FOR MEDICAID MANAGED
 CARE PROVIDER PARTICIPANTS. PRESCRIPTION DRUGS ELIGIBLE  FOR  REIMBURSE-
 MENT  UNDER THIS ARTICLE PRESCRIBED IN RELATION TO A SERVICE PROVIDED BY
 A MANAGED CARE PROVIDER  SHALL  BE  PROVIDED  AND  PAID  FOR  UNDER  THE
 PREFERRED  DRUG PROGRAM AND THE CLINICAL DRUG REVIEW PROGRAM UNDER TITLE
 ONE OF ARTICLE TWO-A OF THE PUBLIC HEALTH LAW. THE MANAGED CARE PROVIDER
 SHALL ACCOUNT TO AND REIMBURSE THE DEPARTMENT FOR THE NET  COST  TO  THE
 DEPARTMENT  FOR  PRESCRIPTION DRUGS PROVIDED TO THE MANAGED CARE PROVID-
 ER'S PARTICIPANTS. PAYMENT FOR PRESCRIPTION DRUGS SHALL BE  INCLUDED  IN
 THE  CAPITATION  PAYMENTS  TO  THE MANAGED CARE PROVIDER FOR SERVICES OR
 SUPPLIES PROVIDED TO A MANAGED CARE PROVIDER'S PARTICIPANTS.
   § 3. Section 270 of the public health law is amended by adding  a  new
 subdivision 15 to read as follows:
   15.  "THIRD-PARTY  HEALTH  CARE  PAYER"  HAS ITS ORDINARY MEANINGS AND
 INCLUDES AN ENTITY SUCH AS A  FISCAL  ADMINISTRATOR,  OR  ADMINISTRATIVE
 SERVICES  PROVIDER  THAT  PARTICIPATES IN THE ADMINISTRATION OF A THIRD-
 PARTY HEALTH CARE PAYER SYSTEM.
   § 4. The public health law is amended by adding a new section 274-a to
 read as follows:
   § 274-A. USE OF  PREFERRED  DRUG  PROGRAM  AND  CLINICAL  DRUG  REVIEW
 PROGRAM.  THE  COMMISSIONER  SHALL  CONTRACT WITH ANY THIRD-PARTY HEALTH
 CARE PAYER THAT SO CHOOSES, TO USE THE PREFERRED DRUG  PROGRAM  AND  THE
 CLINICAL  DRUG  REVIEW PROGRAM TO PROVIDE AND PAY FOR PRESCRIPTION DRUGS
 FOR THE THIRD-PARTY HEALTH CARE PAYER'S  ENROLLEES.  TO  CONTRACT  UNDER
 THIS  SECTION,  THE THIRD-PARTY HEALTH CARE PAYER SHALL PROVIDE COVERAGE
 FOR PRESCRIPTION DRUGS AUTHORIZED  UNDER  THIS  TITLE.  THE  THIRD-PARTY
 HEALTH  CARE PAYER SHALL ACCOUNT TO AND REIMBURSE THE DEPARTMENT FOR THE
 NET COST TO THE DEPARTMENT FOR PRESCRIPTION DRUGS PROVIDED TO THE THIRD-
 PARTY HEALTH CARE PAYER'S ENROLLEES. THE CONTRACT  SHALL  INCLUDE  TERMS
 REQUIRED BY THE COMMISSIONER.
   §  5.  Section 272 of the public health law is amended by adding a new
 subdivision 12 to read as follows:
   12. NO PRIOR AUTHORIZATION SHALL BE REQUIRED UNDER THE PREFERRED  DRUG
 PROGRAM  FOR:  (A)  ATYPICAL  ANTI-PSYCHOTICS; (B) ANTI-DEPRESSANTS; (C)
 ANTI-RETROVIRALS USED IN THE TREATMENT OF HIV/AIDS;  (D)  ANTI-REJECTION
 DRUGS  USED  IN  THE  TREATMENT  OF  ORGAN  AND  TISSUE TRANSPLANTS; (E)
 SEIZURE, EPILEPSY, ENDOCRINE, HEMATOLOGIC  AND  IMMUNOLOGIC  THERAPEUTIC
 CLASSES; AND (F) ANY OTHER THERAPEUTIC CLASS FOR THE TREATMENT OF MENTAL
 ILLNESS  OR  HIV/AIDS,  RECOMMENDED BY THE COMMITTEE AND APPROVED BY THE
 COMMISSIONER UNDER THIS TITLE.
   § 6. Subdivisions 25 and 25-a of section 364-j of the social  services
 law are REPEALED.
   § 7. This act shall take effect on the one hundred eightieth day after
 it  shall have become a law; provided, however, that the commissioner of
 health is immediately authorized and directed to take actions  necessary
 to implement this act when it takes effect.

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