Report Title:

State Pharmacy Assistance Program

Description:

Creates a state pharmacy assistance program to provide benefits to certain elderly and disabled individuals to assist in defraying costs for medically necessary prescriptions under the new federal medicare part D drug benefit program. (SD1)

THE SENATE

S.B. NO.

802

TWENTY-THIRD LEGISLATURE, 2005

S.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO A STATE PHARMACY ASSISTANCE PROGRAM.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The purpose of this Act is to create a state pharmacy assistance program within the department of human services that meets the requirements of 42 U.S.C. §1396r-8(c)(1)(i)(III), to provide certain pharmaceutical benefits to certain elderly and disabled individuals, and to facilitate the enrollment and coordination of benefits between the state pharmacy assistance program and the new medicare part D drug benefit program provided by the federal medicare modernization act.

This state pharmacy assistance program will assist eligible elderly and disabled individuals in defraying their cost of medically necessary prescriptions under the new medicare part D drug benefit program.

The department may select one or more prescription drug plan(s), as approved by the federal centers for medicare and medicaid services, as the preferred plan(s) for the state pharmacy assistance program to provide the coordination of benefits between the Hawaii medicare prescription drug program and the medicare part D drug benefit. To further ensure that eligible seniors and disabled individuals receive a coordinated benefit, the department may provide enrollment assistance to eligible individuals into the preferred prescription drug plan(s).

SECTION 2. Chapter 346, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART  . Hawaii State pharmacy assistance program

§346-A Definitions. As used in this part:

"Asset test" means the asset limits for eligibility in the state pharmacy assistance program as defined by the medicare modernization act and any amendments thereto.

"Contractor" means the person, partnership, or corporate entity that has an approved contract with the department to administer the state pharmacy assistance program as established under this part.

"Department" means the department of human services.

"Enrollee" means a resident of this State who meets the conditions specified in this part and in department rules relating to eligibility for participation in the state pharmacy assistance program and whose application for enrollment in the state pharmacy assistance program has been approved by the department.

"Federal poverty level" means the federal poverty level updated annually in the federal register by the United States department of health and human services under the authority of title 42 United States Code section 9902(2).

"Liquid assets" means assets used in the eligibility determination process as defined by the medicare modernization act.

"Medicaid dual eligible" means a person who is eligible for both medicaid and medicare as defined by the medicare modernization act.

"Medicare Modernization Act" means the federal medicare prescription drug, improvement and modernization act of 2003.

"Medicare part D prescription drug benefit" means the federal prescription benefit provided under the medicare modernization act.

"Prescription drug plan" means a plan provided by non-governmental entities under contract with the federal centers for medicare and medicaid services to provide prescription benefits under the medicare modernization act.

"Resident" means a person who lives within this State and has a fixed place of residence in this State, with the present intent of maintaining a permanent home in this State for the indefinite future."

§346-B State pharmacy assistance program. (a) There is established within the department the state pharmacy assistance program. The state pharmacy assistance program shall coordinate the prescription drug coverage with the federal medicare part D prescription drug benefit, including related supplies, as determined by the department, to each resident that meets the requirements as outlined in section 346-C.

(b) The department is authorized to provide enrollment assistance to eligible individuals into the state pharmacy assistance program. The department shall give initial enrollment priority to the medicaid dual eligible population. A second enrollment priority shall be afforded to medicare eligible applicants with an annual household income up to one hundred and fifty per cent of the federal poverty level that also meet the asset test. Enrollment for medicaid dual eligible persons shall begin no later than October 1, 2005.

(c) The department may select one or more prescription drug plan(s), as approved by the federal centers for medicare and medicaid services, as the department's preferred plan(s) for the state pharmacy assistance program to provide the coordination of benefits between the Hawaii medicare prescription drug program and the medicare part D drug benefit.

(d) The department may administer the state pharmacy assistance program or contract with a third party or parties in accordance with chapter 103F to administer any single component or combination of components of the state pharmacy assistance program, including outreach, eligibility, enrollment, claims, administration, rebate negotiations and recovery, and redistribution, in order to coordinate the prescription drug benefits of the state pharmacy assistance program and the federal medicare part D drug benefit.

(e) Any contract with third parties to administer any component of the state pharmacy assistance program shall be established either at no cost to the State, or on a contingency-fee basis and with no up-front costs to the State, as may be negotiated by the department.

(f) Any contract with third parties to administer any component of the state pharmacy assistance program shall prohibit the contractor from receiving any compensation or other benefits from any pharmaceutical manufacturer participating in the state pharmacy assistance program.

(g) The department shall require that the pharmaceutical manufacturers provide medicaid-level rebates to the Hawaii medicare prescription drug assistance program that equal the rebates received by the Hawaii medicaid program. Pharmaceutical manufacturers shall provide these rebates in order for the manufacturer's products to be available to the enrollees as a benefit under the state pharmacy assistance program. These rebates shall be no less than those provided to medicaid under section 1927 of title XIX of the social security act, title 42 United States Code section 139-6r-8.

(h) The department may prescribe the application and enrollment procedures for prospective enrollees.

(i) The department shall conduct ongoing quality assurance activities similar to those used in the Hawaii medicaid program.

§346-C Eligibility. (a) All residents of the State shall be eligible to participate in the state pharmacy assistance program, provided that the applicant meets the following requirements:

(1) The person is a resident of Hawaii;

(2) The person is sixty-five years or older, or is disabled and receiving a social security benefit;

(3) The person has a household income at or below 150% of the federal poverty level;

(4) The person meets the asset test;

(5) The person is not a member of a medicare advantage plan that provides prescription drug benefits; and

(6) The person is not a member of a retirement plan who is receiving a benefit from the medicare modernization act.

(b) State pharmacy assistance program applicants who are enrolled in any other public assistance program, providing pharmaceutical benefits, other than the medicare modernization act, shall be ineligible for the state pharmacy assistance program as long as they receive pharmaceutical benefits from that other public assistance program, unless the applicant is eligible for medicare. Residents who qualify for, or are enrolled in, the Hawaii RX plus program shall be eligible for the state pharmacy assistance program, provided that they meet all other state pharmacy assistance program requirements.

(c) State pharmacy assistance program applicants who are enrolled in a private sector plan or insurance providing payments for prescription drugs shall be ineligible to receive benefits from the state pharmacy assistance program.

§346-D Benefits. (a) For persons meeting the eligibility requirements in section 346-C, the state pharmacy assistance program may pay all or some of the deductibles, co-insurance payments, premiums and co-payments required under the federal medicare part D pharmacy benefit program, subject to receipt of sufficient rebates pursuant to §346-B (g), as determined by the Department.

(b) The state pharmacy assistance program is the payor of last resort, subject to receipt of sufficient rebates pursuant to subsection 346-B(g), as determined by the department.

(c) The state pharmacy assistance program shall be funded with state appropriations derived from revenues to the State from rebates paid by pharmaceutical manufacturers pursuant to section 356-B(g) which may affect the level of benefits to program enrollees pursuant to subsection 346-D(a) depending on the amount of the rebates received by the State to cover all program benefits and costs of administering the program.

§346-E Spending authority. The department shall expend all revenues received from rebates paid by pharmaceutical manufacturers pursuant to subsection 346-B(g) to pay for the benefits to enrollees in the state pharmacy assistance program, the costs of administering the program, and reimbursement of medicaid pharmaceutical costs.

§346-F Administrative rules. The department shall adopt rules pursuant to chapter 91 necessary for the purposes of this part.

§346-G Annual reports. The department shall report the enrollment and financial status of the state pharmacy assistance program to the legislature no later than twenty days prior to the convening of each regular session, beginning with the 2006 regular session."

SECTION 3. In codifying the new sections added to Chapter 346, Hawaii Revised Statutes, by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 4. This Act shall take effect on July 1, 2005.