House Bill 2151

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    Florida House of Representatives - 2000                HB 2151

        By the Committee on General Appropriations and
    Representative Sanderson





  1                      A bill to be entitled

  2         An act relating to the Agency for Health Care

  3         Administration; amending s. 409.912, F.S.,

  4         relating to cost-effective purchasing of health

  5         care under the Medicaid program; requiring the

  6         agency to implement a Medicaid prescribed drug

  7         spending control program; specifying program

  8         components; providing for implementation to the

  9         extent funds are appropriated; authorizing

10         contracts; requiring an annual report;

11         providing an effective date.

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13  Be It Enacted by the Legislature of the State of Florida:

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15         Section 1.  Subsection (37) is added to section

16  409.912, Florida Statutes, to read:

17         409.912  Cost-effective purchasing of health care.--The

18  agency shall purchase goods and services for Medicaid

19  recipients in the most cost-effective manner consistent with

20  the delivery of quality medical care. The agency shall

21  maximize the use of prepaid per capita and prepaid aggregate

22  fixed-sum basis services when appropriate and other

23  alternative service delivery and reimbursement methodologies,

24  including competitive bidding pursuant to s. 287.057, designed

25  to facilitate the cost-effective purchase of a case-managed

26  continuum of care. The agency shall also require providers to

27  minimize the exposure of recipients to the need for acute

28  inpatient, custodial, and other institutional care and the

29  inappropriate or unnecessary use of high-cost services.

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    Florida House of Representatives - 2000                HB 2151

    187-871A-00






  1         (37)(a)  The agency shall implement a Medicaid

  2  prescribed drug spending control program that includes the

  3  following components:

  4         1.  Medicaid prescribed drug coverages for adult

  5  Medicaid beneficiaries not residing in nursing homes or other

  6  institutions shall be limited to four brand name drugs.

  7  Children and institutionalized adults shall be exempt from

  8  this restriction. Antiretroviral agents are excluded from this

  9  limitation. No requirements for prior authorization or other

10  restrictions on medications used to treat mental illnesses

11  such as schizophrenia, severe depression, or bipolar disorder

12  shall be placed on Medicaid recipients. Medications that shall

13  be available without restriction for persons with mental

14  illnesses include atypical antipsychotic medications,

15  conventional antipsychotic medications, selective serotonin

16  re-uptake inhibitors, and other medications used for the

17  treatment of serious mental illnesses. The agency shall also

18  limit prescribed drug supplies to no more than 34-day

19  supplies. The agency shall continue to provide unlimited

20  generic drugs, contraceptive drugs and items, and diabetic

21  supplies. The agency may authorize exceptions to the brand

22  name drug restriction only when such exceptions are based on

23  prior consultation provided by the agency or an agency

24  contractor. In implementing these provisions, the agency shall

25  establish procedures that meet the following requirements:

26         a.  Response to a request for prior authorization by

27  telephone or other telecommunication device within 24 hours

28  after a request for prior authorization;

29         b.  Provision of a 72-hour supply of the drug

30  prescribed in an emergency situation or when the agency does

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    Florida House of Representatives - 2000                HB 2151

    187-871A-00






  1  not provide a response within 24 hours as required by

  2  sub-subparagraph a.; and

  3         c.  Establishment of a process for expediting a

  4  patient's appeal from a decision to decline coverage for a

  5  medically necessary drug.

  6         2.  Reimbursement to pharmacies for Medicaid prescribed

  7  drugs shall be set at the average wholesale price minus 15

  8  percent.

  9         3.  The agency shall develop and implement a process

10  for managing the drug therapies of Medicaid beneficiaries who

11  are using significant numbers of prescribed drugs each month.

12  The management process may include, but is not limited to,

13  comprehensive, physician-directed medical record reviews,

14  claims analyses, and case evaluations to determine the medical

15  necessity and appropriateness of a patient's treatment plan

16  and drug therapies. The agency may contract with a private

17  organization to provide drug program management services.

18         4.  The agency is authorized to limit the size of its

19  pharmacy network based on need, competitive bidding, price

20  negotiations, credentialing, or other criteria. The agency

21  shall give special consideration to rural areas in determining

22  the size and location of pharmacies included in the Medicaid

23  pharmacy network. A pharmacy credentialing process may include

24  criteria such as a pharmacy's full-service status, location,

25  size, patient educational programs, patient consultation and

26  disease management services, and other characteristics. The

27  agency may impose a moratorium on Medicaid pharmacy enrollment

28  when it has determined that it has sufficient Medicaid

29  participating providers.

30         5.  The agency shall develop and implement a program

31  that requires Medicaid practitioners prescribing drugs to use

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    Florida House of Representatives - 2000                HB 2151

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  1  a counterfeit-proof prescription pad for Medicaid

  2  prescriptions. The agency shall require the use of

  3  standardized counterfeit-proof prescription pads to Medicaid

  4  participating prescribers. The agency may implement the

  5  program in targeted geographic areas or statewide.

  6         6.  Manufacturers of generic drugs prescribed to

  7  Medicaid patients must guarantee the state a rebate of at

  8  least 15.1 percent of the total Medicaid payment for their

  9  generic products. Generic drug manufacturers who pay federal

10  rebates for Medicaid reimbursed drugs at a level below 15.1

11  percent must provide a supplemental rebate to the state in an

12  amount necessary to achieve a 15.1-percent rebate level. If a

13  generic manufacturer raises its price in excess of the

14  Consumer Price Index (Urban), the amount in excess shall be

15  included in the supplemental rebate to the state.

16         (b)  The agency shall implement the provisions of this

17  subsection to the extent funds are appropriated to administer

18  the Medicaid prescribed drug spending control program. The

19  agency may contract all or any part of this program to private

20  organizations.

21         (c)  The agency shall submit a report to the Governor,

22  the Speaker of the House of Representatives, and the President

23  of the Senate by January 15 of each year. The annual report

24  shall include, but not be limited to, the progress made in

25  implementing Medicaid cost containment measures and their

26  effect on Medicaid prescribed drug expenditures.

27         Section 2.  This act shall take effect July 1, 2000.

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    Florida House of Representatives - 2000                HB 2151

    187-871A-00






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  2                          HOUSE SUMMARY

  3
      Requires the Agency for Health Care Administration to
  4    implement a Medicaid prescribed drug spending control
      program. Specifies program components, including coverage
  5    restrictions, a pharmacy reimbursement rate, a drug
      program management process, limitations on the Medicaid
  6    pharmacy network, use of counterfeit-proof prescription
      pads, and a generic drug manufacturers' rebate. Provides
  7    for implementation of the program to the extent funds are
      appropriated. Authorizes the agency to contract for all
  8    or any part of the program. Requires an annual report to
      the Governor and Legislature.
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