HB 5111A

1	A bill to be entitled
2	An act relating to Medicaid; amending s. 409.908, F.S.;
3	revising reimbursement rates for providers of Medicaid
4	prescribed drugs; amending s. 409.912, F.S.; revising
5	reimbursement rates to pharmacies for Medicaid prescribed
6	drugs; providing an effective date.
7
8	Be It Enacted by the Legislature of the State of Florida:
9
10	Section 1.  Subsection (14) of section 409.908, Florida
11	Statutes, is amended to read:
12	409.908  Reimbursement of Medicaid providers.--Subject to
13	specific appropriations, the agency shall reimburse Medicaid
14	providers, in accordance with state and federal law, according
15	to methodologies set forth in the rules of the agency and in
16	policy manuals and handbooks incorporated by reference therein.
17	These methodologies may include fee schedules, reimbursement
18	methods based on cost reporting, negotiated fees, competitive
19	bidding pursuant to s. 287.057, and other mechanisms the agency
20	considers efficient and effective for purchasing services or
21	goods on behalf of recipients. If a provider is reimbursed based
22	on cost reporting and submits a cost report late and that cost
23	report would have been used to set a lower reimbursement rate
24	for a rate semester, then the provider's rate for that semester
25	shall be retroactively calculated using the new cost report, and
26	full payment at the recalculated rate shall be effected
27	retroactively. Medicare-granted extensions for filing cost
28	reports, if applicable, shall also apply to Medicaid cost
29	reports. Payment for Medicaid compensable services made on
30	behalf of Medicaid eligible persons is subject to the
31	availability of moneys and any limitations or directions
32	provided for in the General Appropriations Act or chapter 216.
33	Further, nothing in this section shall be construed to prevent
34	or limit the agency from adjusting fees, reimbursement rates,
35	lengths of stay, number of visits, or number of services, or
36	making any other adjustments necessary to comply with the
37	availability of moneys and any limitations or directions
38	provided for in the General Appropriations Act, provided the
39	adjustment is consistent with legislative intent.
40	(14)  A provider of prescribed drugs shall be reimbursed
41	the least of the amount billed by the provider, the provider's
42	usual and customary charge, or the Medicaid maximum allowable
43	fee established by the agency, plus a dispensing fee. The
44	Medicaid maximum allowable fee for ingredient cost will be based
45	on the lower of: average wholesale price (AWP) minus 18.4 16.4
46	percent, wholesaler acquisition cost (WAC) plus 2.75 4.75
47	percent, the federal upper limit (FUL), the state maximum
48	allowable cost (SMAC), or the usual and customary (UAC) charge
49	billed by the provider. Medicaid providers are required to
50	dispense generic drugs if available at lower cost and the agency
51	has not determined that the branded product is more cost-
52	effective, unless the prescriber has requested and received
53	approval to require the branded product. The agency is directed
54	to implement a variable dispensing fee for payments for
55	prescribed medicines while ensuring continued access for
56	Medicaid recipients. The variable dispensing fee may be based
57	upon, but not limited to, either or both the volume of
58	prescriptions dispensed by a specific pharmacy provider, the
59	volume of prescriptions dispensed to an individual recipient,
60	and dispensing of preferred-drug-list products. The agency may
61	increase the pharmacy dispensing fee authorized by statute and
62	in the annual General Appropriations Act by $0.50 for the
63	dispensing of a Medicaid preferred-drug-list product and reduce
64	the pharmacy dispensing fee by $0.50 for the dispensing of a
65	Medicaid product that is not included on the preferred drug
66	list. The agency may establish a supplemental pharmaceutical
67	dispensing fee to be paid to providers returning unused unit-
68	dose packaged medications to stock and crediting the Medicaid
69	program for the ingredient cost of those medications if the
70	ingredient costs to be credited exceed the value of the
71	supplemental dispensing fee. The agency is authorized to limit
72	reimbursement for prescribed medicine in order to comply with
73	any limitations or directions provided for in the General
74	Appropriations Act, which may include implementing a prospective
75	or concurrent utilization review program.
76	Section 2.  Subsection (39) of section 409.912, Florida
77	Statutes, is amended to read:
78	409.912  Cost-effective purchasing of health care.--The
79	agency shall purchase goods and services for Medicaid recipients
80	in the most cost-effective manner consistent with the delivery
81	of quality medical care. To ensure that medical services are
82	effectively utilized, the agency may, in any case, require a
83	confirmation or second physician's opinion of the correct
84	diagnosis for purposes of authorizing future services under the
85	Medicaid program. This section does not restrict access to
86	emergency services or poststabilization care services as defined
87	in 42 C.F.R. part 438.114. Such confirmation or second opinion
88	shall be rendered in a manner approved by the agency. The agency
89	shall maximize the use of prepaid per capita and prepaid
90	aggregate fixed-sum basis services when appropriate and other
91	alternative service delivery and reimbursement methodologies,
92	including competitive bidding pursuant to s. 287.057, designed
93	to facilitate the cost-effective purchase of a case-managed
94	continuum of care. The agency shall also require providers to
95	minimize the exposure of recipients to the need for acute
96	inpatient, custodial, and other institutional care and the
97	inappropriate or unnecessary use of high-cost services. The
98	agency shall contract with a vendor to monitor and evaluate the
99	clinical practice patterns of providers in order to identify
100	trends that are outside the normal practice patterns of a
101	provider's professional peers or the national guidelines of a
102	provider's professional association. The vendor must be able to
103	provide information and counseling to a provider whose practice
104	patterns are outside the norms, in consultation with the agency,
105	to improve patient care and reduce inappropriate utilization.
106	The agency may mandate prior authorization, drug therapy
107	management, or disease management participation for certain
108	populations of Medicaid beneficiaries, certain drug classes, or
109	particular drugs to prevent fraud, abuse, overuse, and possible
110	dangerous drug interactions. The Pharmaceutical and Therapeutics
111	Committee shall make recommendations to the agency on drugs for
112	which prior authorization is required. The agency shall inform
113	the Pharmaceutical and Therapeutics Committee of its decisions
114	regarding drugs subject to prior authorization. The agency is
115	authorized to limit the entities it contracts with or enrolls as
116	Medicaid providers by developing a provider network through
117	provider credentialing. The agency may competitively bid single-
118	source-provider contracts if procurement of goods or services
119	results in demonstrated cost savings to the state without
120	limiting access to care. The agency may limit its network based
121	on the assessment of beneficiary access to care, provider
122	availability, provider quality standards, time and distance
123	standards for access to care, the cultural competence of the
124	provider network, demographic characteristics of Medicaid
125	beneficiaries, practice and provider-to-beneficiary standards,
126	appointment wait times, beneficiary use of services, provider
127	turnover, provider profiling, provider licensure history,
128	previous program integrity investigations and findings, peer
129	review, provider Medicaid policy and billing compliance records,
130	clinical and medical record audits, and other factors. Providers
131	shall not be entitled to enrollment in the Medicaid provider
132	network. The agency shall determine instances in which allowing
133	Medicaid beneficiaries to purchase durable medical equipment and
134	other goods is less expensive to the Medicaid program than long-
135	term rental of the equipment or goods. The agency may establish
136	rules to facilitate purchases in lieu of long-term rentals in
137	order to protect against fraud and abuse in the Medicaid program
138	as defined in s. 409.913. The agency may seek federal waivers
139	necessary to administer these policies.
140	(39)(a)  The agency shall implement a Medicaid prescribed-
141	drug spending-control program that includes the following
142	components:
143	1.  A Medicaid preferred drug list, which shall be a
144	listing of cost-effective therapeutic options recommended by the
145	Medicaid Pharmacy and Therapeutics Committee established
146	pursuant to s. 409.91195 and adopted by the agency for each
147	therapeutic class on the preferred drug list. At the discretion
148	of the committee, and when feasible, the preferred drug list
149	should include at least two products in a therapeutic class. The
150	agency may post the preferred drug list and updates to the
151	preferred drug list on an Internet website without following the
152	rulemaking procedures of chapter 120. Antiretroviral agents are
153	excluded from the preferred drug list. The agency shall also
154	limit the amount of a prescribed drug dispensed to no more than
155	a 34-day supply unless the drug products' smallest marketed
156	package is greater than a 34-day supply, or the drug is
157	determined by the agency to be a maintenance drug in which case
158	a 100-day maximum supply may be authorized. The agency is
159	authorized to seek any federal waivers necessary to implement
160	these cost-control programs and to continue participation in the
161	federal Medicaid rebate program, or alternatively to negotiate
162	state-only manufacturer rebates. The agency may adopt rules to
163	implement this subparagraph. The agency shall continue to
164	provide unlimited contraceptive drugs and items. The agency must
165	establish procedures to ensure that:
166	a.  There is a response to a request for prior consultation
167	by telephone or other telecommunication device within 24 hours
168	after receipt of a request for prior consultation; and
169	b.  A 72-hour supply of the drug prescribed is provided in
170	an emergency or when the agency does not provide a response
171	within 24 hours as required by sub-subparagraph a.
172	2.  Reimbursement to pharmacies for Medicaid prescribed
173	drugs shall be set at the lesser of: the average wholesale price
174	(AWP) minus 18.4 16.4 percent, the wholesaler acquisition cost
175	(WAC) plus 2.75 4.75 percent, the federal upper limit (FUL), the
176	state maximum allowable cost (SMAC), or the usual and customary
177	(UAC) charge billed by the provider.
178	3.  The agency shall develop and implement a process for
179	managing the drug therapies of Medicaid recipients who are using
180	significant numbers of prescribed drugs each month. The
181	management process may include, but is not limited to,
182	comprehensive, physician-directed medical-record reviews, claims
183	analyses, and case evaluations to determine the medical
184	necessity and appropriateness of a patient's treatment plan and
185	drug therapies. The agency may contract with a private
186	organization to provide drug-program-management services. The
187	Medicaid drug benefit management program shall include
188	initiatives to manage drug therapies for HIV/AIDS patients,
189	patients using 20 or more unique prescriptions in a 180-day
190	period, and the top 1,000 patients in annual spending. The
191	agency shall enroll any Medicaid recipient in the drug benefit
192	management program if he or she meets the specifications of this
193	provision and is not enrolled in a Medicaid health maintenance
194	organization.
195	4.  The agency may limit the size of its pharmacy network
196	based on need, competitive bidding, price negotiations,
197	credentialing, or similar criteria. The agency shall give
198	special consideration to rural areas in determining the size and
199	location of pharmacies included in the Medicaid pharmacy
200	network. A pharmacy credentialing process may include criteria
201	such as a pharmacy's full-service status, location, size,
202	patient educational programs, patient consultation, disease
203	management services, and other characteristics. The agency may
204	impose a moratorium on Medicaid pharmacy enrollment when it is
205	determined that it has a sufficient number of Medicaid-
206	participating providers. The agency must allow dispensing
207	practitioners to participate as a part of the Medicaid pharmacy
208	network regardless of the practitioner's proximity to any other
209	entity that is dispensing prescription drugs under the Medicaid
210	program. A dispensing practitioner must meet all credentialing
211	requirements applicable to his or her practice, as determined by
212	the agency.
213	5.  The agency shall develop and implement a program that
214	requires Medicaid practitioners who prescribe drugs to use a
215	counterfeit-proof prescription pad for Medicaid prescriptions.
216	The agency shall require the use of standardized counterfeit-
217	proof prescription pads by Medicaid-participating prescribers or
218	prescribers who write prescriptions for Medicaid recipients. The
219	agency may implement the program in targeted geographic areas or
220	statewide.
221	6.  The agency may enter into arrangements that require
222	manufacturers of generic drugs prescribed to Medicaid recipients
223	to provide rebates of at least 15.1 percent of the average
224	manufacturer price for the manufacturer's generic products.
225	These arrangements shall require that if a generic-drug
226	manufacturer pays federal rebates for Medicaid-reimbursed drugs
227	at a level below 15.1 percent, the manufacturer must provide a
228	supplemental rebate to the state in an amount necessary to
229	achieve a 15.1-percent rebate level.
230	7.  The agency may establish a preferred drug list as
231	described in this subsection, and, pursuant to the establishment
232	of such preferred drug list, it is authorized to negotiate
233	supplemental rebates from manufacturers that are in addition to
234	those required by Title XIX of the Social Security Act and at no
235	less than 14 percent of the average manufacturer price as
236	defined in 42 U.S.C. s. 1936 on the last day of a quarter unless
237	the federal or supplemental rebate, or both, equals or exceeds
238	29 percent. There is no upper limit on the supplemental rebates
239	the agency may negotiate. The agency may determine that specific
240	products, brand-name or generic, are competitive at lower rebate
241	percentages. Agreement to pay the minimum supplemental rebate
242	percentage will guarantee a manufacturer that the Medicaid
243	Pharmaceutical and Therapeutics Committee will consider a
244	product for inclusion on the preferred drug list. However, a
245	pharmaceutical manufacturer is not guaranteed placement on the
246	preferred drug list by simply paying the minimum supplemental
247	rebate. Agency decisions will be made on the clinical efficacy
248	of a drug and recommendations of the Medicaid Pharmaceutical and
249	Therapeutics Committee, as well as the price of competing
250	products minus federal and state rebates. The agency is
251	authorized to contract with an outside agency or contractor to
252	conduct negotiations for supplemental rebates. For the purposes
253	of this section, the term "supplemental rebates" means cash
254	rebates. Effective July 1, 2004, value-added programs as a
255	substitution for supplemental rebates are prohibited. The agency
256	is authorized to seek any federal waivers to implement this
257	initiative.
258	8.  The Agency for Health Care Administration shall expand
259	home delivery of pharmacy products. To assist Medicaid patients
260	in securing their prescriptions and reduce program costs, the
261	agency shall expand its current mail-order-pharmacy diabetes-
262	supply program to include all generic and brand-name drugs used
263	by Medicaid patients with diabetes. Medicaid recipients in the
264	current program may obtain nondiabetes drugs on a voluntary
265	basis. This initiative is limited to the geographic area covered
266	by the current contract. The agency may seek and implement any
267	federal waivers necessary to implement this subparagraph.
268	9.  The agency shall limit to one dose per month any drug
269	prescribed to treat erectile dysfunction.
270	10.a.  The agency may implement a Medicaid behavioral drug
271	management system. The agency may contract with a vendor that
272	has experience in operating behavioral drug management systems
273	to implement this program. The agency is authorized to seek
274	federal waivers to implement this program.
275	b.  The agency, in conjunction with the Department of
276	Children and Family Services, may implement the Medicaid
277	behavioral drug management system that is designed to improve
278	the quality of care and behavioral health prescribing practices
279	based on best practice guidelines, improve patient adherence to
280	medication plans, reduce clinical risk, and lower prescribed
281	drug costs and the rate of inappropriate spending on Medicaid
282	behavioral drugs. The program may include the following
283	elements:
284	(I)  Provide for the development and adoption of best
285	practice guidelines for behavioral health-related drugs such as
286	antipsychotics, antidepressants, and medications for treating
287	bipolar disorders and other behavioral conditions; translate
288	them into practice; review behavioral health prescribers and
289	compare their prescribing patterns to a number of indicators
290	that are based on national standards; and determine deviations
291	from best practice guidelines.
292	(II)  Implement processes for providing feedback to and
293	educating prescribers using best practice educational materials
294	and peer-to-peer consultation.
295	(III)  Assess Medicaid beneficiaries who are outliers in
296	their use of behavioral health drugs with regard to the numbers
297	and types of drugs taken, drug dosages, combination drug
298	therapies, and other indicators of improper use of behavioral
299	health drugs.
300	(IV)  Alert prescribers to patients who fail to refill
301	prescriptions in a timely fashion, are prescribed multiple same-
302	class behavioral health drugs, and may have other potential
303	medication problems.
304	(V)  Track spending trends for behavioral health drugs and
305	deviation from best practice guidelines.
306	(VI)  Use educational and technological approaches to
307	promote best practices, educate consumers, and train prescribers
308	in the use of practice guidelines.
309	(VII)  Disseminate electronic and published materials.
310	(VIII)  Hold statewide and regional conferences.
311	(IX)  Implement a disease management program with a model
312	quality-based medication component for severely mentally ill
313	individuals and emotionally disturbed children who are high
314	users of care.
315	11.a.  The agency shall implement a Medicaid prescription
316	drug management system. The agency may contract with a vendor
317	that has experience in operating prescription drug management
318	systems in order to implement this system. Any management system
319	that is implemented in accordance with this subparagraph must
320	rely on cooperation between physicians and pharmacists to
321	determine appropriate practice patterns and clinical guidelines
322	to improve the prescribing, dispensing, and use of drugs in the
323	Medicaid program. The agency may seek federal waivers to
324	implement this program.
325	b.  The drug management system must be designed to improve
326	the quality of care and prescribing practices based on best
327	practice guidelines, improve patient adherence to medication
328	plans, reduce clinical risk, and lower prescribed drug costs and
329	the rate of inappropriate spending on Medicaid prescription
330	drugs. The program must:
331	(I)  Provide for the development and adoption of best
332	practice guidelines for the prescribing and use of drugs in the
333	Medicaid program, including translating best practice guidelines
334	into practice; reviewing prescriber patterns and comparing them
335	to indicators that are based on national standards and practice
336	patterns of clinical peers in their community, statewide, and
337	nationally; and determine deviations from best practice
338	guidelines.
339	(II)  Implement processes for providing feedback to and
340	educating prescribers using best practice educational materials
341	and peer-to-peer consultation.
342	(III)  Assess Medicaid recipients who are outliers in their
343	use of a single or multiple prescription drugs with regard to
344	the numbers and types of drugs taken, drug dosages, combination
345	drug therapies, and other indicators of improper use of
346	prescription drugs.
347	(IV)  Alert prescribers to patients who fail to refill
348	prescriptions in a timely fashion, are prescribed multiple drugs
349	that may be redundant or contraindicated, or may have other
350	potential medication problems.
351	(V)  Track spending trends for prescription drugs and
352	deviation from best practice guidelines.
353	(VI)  Use educational and technological approaches to
354	promote best practices, educate consumers, and train prescribers
355	in the use of practice guidelines.
356	(VII)  Disseminate electronic and published materials.
357	(VIII)  Hold statewide and regional conferences.
358	(IX)  Implement disease management programs in cooperation
359	with physicians and pharmacists, along with a model quality-
360	based medication component for individuals having chronic
361	medical conditions.
362	12.  The agency is authorized to contract for drug rebate
363	administration, including, but not limited to, calculating
364	rebate amounts, invoicing manufacturers, negotiating disputes
365	with manufacturers, and maintaining a database of rebate
366	collections.
367	13.  The agency may specify the preferred daily dosing form
368	or strength for the purpose of promoting best practices with
369	regard to the prescribing of certain drugs as specified in the
370	General Appropriations Act and ensuring cost-effective
371	prescribing practices.
372	14.  The agency may require prior authorization for
373	Medicaid-covered prescribed drugs. The agency may, but is not
374	required to, prior-authorize the use of a product:
375	a.  For an indication not approved in labeling;
376	b.  To comply with certain clinical guidelines; or
377	c.  If the product has the potential for overuse, misuse,
378	or abuse.
379
380	The agency may require the prescribing professional to provide
381	information about the rationale and supporting medical evidence
382	for the use of a drug. The agency may post prior authorization
383	criteria and protocol and updates to the list of drugs that are
384	subject to prior authorization on an Internet website without
385	amending its rule or engaging in additional rulemaking.
386	15.  The agency, in conjunction with the Pharmaceutical and
387	Therapeutics Committee, may require age-related prior
388	authorizations for certain prescribed drugs. The agency may
389	preauthorize the use of a drug for a recipient who may not meet
390	the age requirement or may exceed the length of therapy for use
391	of this product as recommended by the manufacturer and approved
392	by the Food and Drug Administration. Prior authorization may
393	require the prescribing professional to provide information
394	about the rationale and supporting medical evidence for the use
395	of a drug.
396	16.  The agency shall implement a step-therapy prior
397	authorization approval process for medications excluded from the
398	preferred drug list. Medications listed on the preferred drug
399	list must be used within the previous 12 months prior to the
400	alternative medications that are not listed. The step-therapy
401	prior authorization may require the prescriber to use the
402	medications of a similar drug class or for a similar medical
403	indication unless contraindicated in the Food and Drug
404	Administration labeling. The trial period between the specified
405	steps may vary according to the medical indication. The step-
406	therapy approval process shall be developed in accordance with
407	the committee as stated in s. 409.91195(7) and (8). A drug
408	product may be approved without meeting the step-therapy prior
409	authorization criteria if the prescribing physician provides the
410	agency with additional written medical or clinical documentation
411	that the product is medically necessary because:
412	a.  There is not a drug on the preferred drug list to treat
413	the disease or medical condition which is an acceptable clinical
414	alternative;
415	b.  The alternatives have been ineffective in the treatment
416	of the beneficiary's disease; or
417	c.  Based on historic evidence and known characteristics of
418	the patient and the drug, the drug is likely to be ineffective,
419	or the number of doses have been ineffective.
420
421	The agency shall work with the physician to determine the best
422	alternative for the patient. The agency may adopt rules waiving
423	the requirements for written clinical documentation for specific
424	drugs in limited clinical situations.
425	17.  The agency shall implement a return and reuse program
426	for drugs dispensed by pharmacies to institutional recipients,
427	which includes payment of a $5 restocking fee for the
428	implementation and operation of the program. The return and
429	reuse program shall be implemented electronically and in a
430	manner that promotes efficiency. The program must permit a
431	pharmacy to exclude drugs from the program if it is not
432	practical or cost-effective for the drug to be included and must
433	provide for the return to inventory of drugs that cannot be
434	credited or returned in a cost-effective manner. The agency
435	shall determine if the program has reduced the amount of
436	Medicaid prescription drugs which are destroyed on an annual
437	basis and if there are additional ways to ensure more
438	prescription drugs are not destroyed which could safely be
439	reused. The agency's conclusion and recommendations shall be
440	reported to the Legislature by December 1, 2005.
441	(b)  The agency shall implement this subsection to the
442	extent that funds are appropriated to administer the Medicaid
443	prescribed-drug spending-control program. The agency may
444	contract all or any part of this program to private
445	organizations.
446	(c)  The agency shall submit quarterly reports to the
447	Governor, the President of the Senate, and the Speaker of the
448	House of Representatives which must include, but need not be
449	limited to, the progress made in implementing this subsection
450	and its effect on Medicaid prescribed-drug expenditures.
451	Section 3.  This act shall take effect March 1, 2009.

CODING: Words stricken are deletions; words underlined are additions.