HOUSE OF REPRESENTATIVES

H.C.R. NO.

54

TWENTY-FOURTH LEGISLATURE, 2007

 

STATE OF HAWAII

 

 

 

 

 

HOUSE CONCURRENT

RESOLUTION

 

 

requesting the department of human services to ESTABLISH AN INTERIM TASK FORCE TO REVIEW THE STATE MAXIMUM ALLOWABLE COST PROGRAM'S REIMBURSEMENT POLICY AND ITS IMPACT ON SMALL, INDEPENDENT, COMMUNITY PHARMACIES.

 

 

 


     WHEREAS, pharmacology is a transitional field between health sciences and chemical sciences and a profession charged with ensuring the safe use of medication; and

 

     WHEREAS, traditionally, pharmacists have compounded and dispensed medications on the orders of physicians, but more recently, the role of the pharmacist has evolved to include other services related to patient care, including clinical practice, medication review, and drug information; and

 

     WHEREAS, pharmacists are highly-trained and skilled healthcare professionals who perform various roles to ensure optimal health outcomes for their patients; and

 

     WHEREAS, many pharmacists are also small-business owners, owning the pharmacy in which they practice; and

 

     WHEREAS, for each prescription that a pharmacy fills under the Medicaid Program, Medicaid pays the pharmacy an amount meant to cover both the cost of acquiring the drug from the manufacturer and the cost of distributing and dispensing it; and

 

     WHEREAS, with the rising cost of healthcare taking a significant toll on federal and state budgets, federal regulations were implemented in 1987 to limit the amount which Medicaid could reimburse for certain generic drugs under the Federal Upper Limit (FUL) Program; and


     WHEREAS, the concept of the FUL Program is to achieve savings by taking advantage of current market prices; and

 

     WHEREAS, states also limit Medicaid drug reimbursement under the Maximum Allowable Cost (MAC) Program, which generally lists more drugs than the FUL Program and features lower pricing; and

 

     WHEREAS, presently, MAC prices in Hawaii are set to remain below FUL prices to adhere to federal regulations and ensure maximum federal reimbursement for Medicaid expenditures; and

 

     WHEREAS, following federal guidelines, states typically reimburse pharmacies for a prescription on the basis of an estimated acquisition cost (EAC) plus a dispensing fee--both of which vary among the states; and

 

     WHEREAS, Hawaii's EAC is equal to the average wholesale price minus 10.5 percent; and

 

     WHEREAS, the state Department of Human Services (DHS) has posted on its website "unofficial" rules, which state that for a multi-source drug product, the MAC is determined by averaging the EAC of the three least expensive generic versions available with at least one of the three generic products provided by a manufacturer who participates in the Federal Drug Rebate Program; and

 

     WHEREAS, under Hawaii's MAC Program, reimbursement for prescription drugs is as follows:

 

(1)  Single-source drugs are reimbursed at the lowest of either the:

 

          (A)  Billed charge;

 

          (B)  Provider’s usual and customary charge to the general public; or

 

          (C)  The EAC for a drug product plus a reasonable dispensing fee; and

 

(2)  Multiple source drug reimbursements shall not exceed      the lowest of either the:

          (A)  Billed charge;

 

          (B)  Provider’s usual and customary charge to the general public;

 

          (C)  EAC for a drug product plus a reasonable dispensing fee;

 

          (D)  FUL price plus a reasonable dispensing fee; or

 

          (E)  If no FUL exists, the MAC plus a reasonable dispensing fee, currently set at $4.67;

 

and

 

     WHEREAS, according to a recent study by the Government Accountability Office (GAO), proposed Medicaid pharmacy reimbursement cuts will force pharmacists to accept Medicaid drug reimbursement that is, on average, 36 percent below their acquisition cost; and

 

     WHEREAS, 86 percent of independent community pharmacists say proposed regulations, as evaluated by the GAO, will influence their decision to continue participating in the Medicaid program; and

 

     WHEREAS, it will be our state's poor, in particular women and children who make up the majority of Medicaid recipients, who will suffer when they can no longer access community pharmacies for the medications they need; and

 

     WHEREAS, more information needs to be collected to better understand how MAC prices are set and how to ensure a reasonable reimbursement to small pharmacies within state spending limits and of federal Medicaid restrictions; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-fourth Legislature of the State of Hawaii, Regular Session of 2007, the Senate concurring, that DHS is requested to establish an interim State Maximum Allowable Cost Program Evaluation Task Force (Task Force) to review the state MAC Program's reimbursement policy and its impact on small, independent, community pharmacies; and


     BE IT FURTHER RESOLVED that the Task Force be composed of nine members to include the following:

 

(1)  One member appointed by the Governor;

 

(2)  One member appointed by the President of the Senate;

 

(3)  One member appointed by the Speaker of the House of Representatives;

 

(4)  The Director of Human Services, or a designee;

 

(5)  The Director of Commerce and Consumer Affairs, or a designee;

 

(6)  The Executive Officer of the Hawaii State Board of Pharmacy, or a designee; and

 

(7)  A representative of the National Community Pharmacists Association; and

 

(8)  Two practicing pharmacists from small, independent, community pharmacies;

 

and

 

     BE IT FURTHER RESOLVED that the Task Force is requested to submit a report of its discussions, and any findings and recommendations, including any proposed legislation, to the Governor and the Legislature no later than 20 days prior to the convening of the Regular Session of 2008; and

 

     BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, Director of Human Services, Director of Commerce and Consumer Affairs, Executive Officer of the Hawaii State Board of Pharmacy, and President of the National Community Pharmacists Association.

 

 

 

 

OFFERED BY:

_____________________________

 

 

Report Title: 

Small Community Pharmacies; Medicaid; State Maximum Allowable Cost Program; Interim Task Force