Connecticut Seal

General Assembly

 

Committee Bill No. 607

January Session, 2005

 

LCO No. 4164

 

*_____SB00607HS_APP031705____*

Referred to Committee on Human Services

 

Introduced by:

 

(HS )

 

AN ACT CONCERNING THE USE OF PREFERRED DRUG LISTS AND PRIOR AUTHORIZATION PROCEDURES BY THE DEPARTMENT OF SOCIAL SERVICES OR ANY ENTITY THAT ADMINISTERS A MEDICAID MANAGED CARE HEALTH PLAN.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 17b-274 of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2005):

(a) The Division of Criminal Justice shall periodically investigate pharmacies to ensure that the state is not billed for a brand name drug product when a less expensive generic substitute drug product is dispensed to a Medicaid recipient. The Commissioner of Social Services shall cooperate and provide information as requested by such division.

(b) A licensed medical practitioner may specify in writing or by a telephonic or electronic communication that there shall be no substitution for the specified brand name drug product in any prescription for a Medicaid, state-administered general assistance [,] or ConnPACE recipient, provided (1) the practitioner specifies the basis on which the brand name drug product and dosage form is medically necessary in comparison to a chemically equivalent generic drug product substitution, and (2) the phrase "brand medically necessary" shall be in the practitioner's handwriting on the prescription form or, if the prohibition was communicated by telephonic communication, in the pharmacist's handwriting on such form, and shall not be preprinted or stamped or initialed on such form. If the practitioner specifies by telephonic communication that there shall be no substitution for the specified brand name drug product in any prescription for a Medicaid, state-administered general assistance [,] or ConnPACE recipient, written certification in the practitioner's handwriting bearing the phrase "brand medically necessary" shall be sent to the dispensing pharmacy within ten days. A pharmacist shall dispense a generically equivalent drug product for any drug listed in accordance with the Code of Federal Regulations Title 42 Part 447.332 for a drug prescribed for a Medicaid, state-administered general assistance [,] or ConnPACE recipient unless the phrase "brand medically necessary" is ordered in accordance with this subsection and such pharmacist has received approval to dispense the brand name drug product in accordance with subsection (c) of this section.

(c) The Commissioner of Social Services shall implement a procedure by which a pharmacist shall obtain approval from an independent pharmacy consultant acting on behalf of the Department of Social Services, under an administrative services only contract, whenever the pharmacist dispenses a brand name drug product to a Medicaid, state-administered general assistance [,] or ConnPACE recipient and a chemically equivalent generic drug product substitution is available, provided such procedure shall not require approval for other than initial prescriptions for such drug product. Such requests for approval may be communicated to the independent pharmacy consultant through telephonic communication, by means of a facsimile transmission or through electronic mail. In cases where the brand name drug is less costly than the chemically equivalent generic drug when factoring in manufacturers' rebates, the pharmacist shall dispense the brand name drug. If such approval is not granted or denied within two hours of receipt by the commissioner of the request for approval, it shall be deemed granted and the pharmacist shall not need such approval to refill such prescription. Notwithstanding any provision of this section, a pharmacist shall not dispense any initial maintenance drug prescription for which there is a chemically equivalent generic substitution that is for less than fifteen days without the department's granting of prior authorization, provided prior authorization shall not otherwise be required for atypical antipsychotic drugs if the individual is currently taking such drug at the time the pharmacist receives the prescription. The pharmacist may appeal a denial of reimbursement to the department based on the failure of such pharmacist to substitute a generic drug product in accordance with this section.

(d) In all cases where a Medicaid, state-administered general assistance or ConnPACE recipient presents to a pharmacist a prescription for a drug requiring prior approval, but for which prior approval has not been obtained by such recipient, the Department of Social Services or any entity that administers a Medicaid managed care health plan shall:

(1) Ensure the immediate electronic authorization of up to a fifteen-day supply of the originally prescribed drug and require that the initial response to a pharmacist requesting authorization for the drug include confirmation of the availability of payment for dispensing such a temporary supply;

(2) Provide notification to the prescriber, no later than twenty-four hours after receipt of the prescription, by facsimile transmission or electronic mail, (A) that prior approval is required for the prescribed drug, (B) the specified process for obtaining prior approval, together with forms that may be transmitted electronically to obtain prior approval, (C) that a temporary supply of the prescribed drug, not to exceed fifteen days, was issued in the absence of prior approval, and (D) that identifies any alternative drugs contained on the preferred drug lists, believed to be equally effective; and

(3) Mail written notification to the Medicaid, state-administered general assistance or ConnPACE recipient, no later than twenty-four hours after receipt of the prescription, that (A) prior approval is required for the prescribed drug, (B) a temporary supply of the prescribed drug was issued in the absence of prior approval, (C) identifies any alternative drugs contained on the preferred drug lists, believed to be equally effective, and (D) advises the recipient of the right to request a hearing, utilizing the Medicaid fair hearing process administered by the department pursuant to chapter 54.

(e) The Department of Social Services, an independent pharmacy consultant acting on behalf of the department, or any entity that administers a Medicaid managed care health plan shall provide written notice of the right to a hearing to a Medicaid, state-administered general assistance or ConnPACE recipient whenever the department, an independent pharmacy consultant acting on behalf of the department, or any entity that administers a Medicaid managed care health plan: (1) Authorizes less than the full amount or duration of the drug originally prescribed, (2) denies or terminates payment for a prescribed drug, (3) provides only a temporary supply of a prescribed drug, or (4) denies a request for prior approval of a prescribed drug. The hearing shall be conducted in accordance with the Medicaid fair hearing process and shall be administered by the department pursuant to chapter 54. The hearing shall be held not later than ten days after the date on which a request for such hearing is received, and any recipient requesting such hearing shall continue to receive the originally prescribed drug during the pendency of any such hearing.

(f) The department and each entity that administers a Medicaid managed care health plan shall, with respect to any Medicaid, state-administered general assistance or ConnPACE recipient who is utilizing a drug newly subjected to prior approval requirements shall, prior to the implementation of such a prior approval requirement, provide a thirty-day advance written notification to such recipient and the prescriber of: (1) The impending prior approval requirement for the drug, (2) the process for obtaining such prior approval, and (3) the identity and availability of any alternative drugs believed to be equally effective for the recipient. The department and each entity that administers a Medicaid managed care health plan shall, not less than ten days prior to suspending payment for a drug being utilized without prior approval, provide separate written notice of the termination of payment for such drug to a Medicaid, state-administered general assistance or ConnPACE recipient.

[(d)] (g) A licensed medical practitioner shall disclose to the Department of Social Services or such consultant, upon request, the basis on which the brand name drug product and dosage form is medically necessary in comparison to a chemically equivalent generic drug product substitution. The Commissioner of Social Services shall establish a procedure by which such a practitioner may appeal a determination that a chemically equivalent generic drug product substitution is required for a Medicaid, state-administered general assistance [,] or ConnPACE recipient.

(h) The protections set forth in subsections (c) to (f), inclusive, of this section for Medicaid, state-administered general assistance and ConnPACE recipients shall apply equally to prior approval requirements for brand name drugs and to prior approval required due to use of preferred drug lists. The provisions of subsections (c) to (f), inclusive, of this section shall apply to any entity that administers a Medicaid managed care health plan and to fee-for-service plans administered by the department directly or for which the department has entered into a contractual arrangement for the administration of such fee-for-service plan.

Sec. 2. Section 17b-274d of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2005):

(a) Pursuant to 42 USC 1396r-8, there is established a Medicaid Pharmaceutical and Therapeutics Committee within the Department of Social Services.

(b) The Medicaid Pharmaceutical and Therapeutics Committee shall be comprised as specified in 42 USC 1396r-8 and shall consist of fourteen members appointed by the Governor. Five members shall be physicians licensed pursuant to chapter 370, including one general practitioner, one pediatrician, one geriatrician, one psychiatrist and one specialist in family planning, four members shall be pharmacists licensed pursuant to chapter 400j, two members shall be visiting nurses, one specializing in adult care and one specializing in psychiatric care, one member shall be a clinician designated by the Commissioner of Mental Health and Addiction Services, one member shall be a representative of pharmaceutical manufacturers and one member shall be a consumer representative. The committee may, on an ad hoc basis, seek the participation of other state agencies or other interested parties in its deliberations. The members shall serve for terms of two years from the date of their appointment. Members may be appointed to more than one term. The Commissioner of Social Services, or the commissioner's designee, shall convene the committee following the Governor's designation of appointments. The administrative staff of the Department of Social Services shall serve as staff for said committee and assist with all ministerial duties. The Governor shall ensure that the committee membership includes Medicaid participating physicians and pharmacists, with experience serving all segments of the Medicaid population.

(c) Committee members shall select a chairperson and vice-chairperson from the committee membership on an annual basis.

(d) The committee shall meet at least quarterly, and may meet at other times at the discretion of the chairperson and committee membership. The committee shall comply with all regulations adopted by the department, including notice of any meeting of the committee, pursuant to the requirements of chapter 54.

(e) The Department of Social Services, in consultation with the Medicaid Pharmaceutical and Therapeutics Committee, shall adopt preferred drug lists for use in the Medicaid, state-administered general assistance and ConnPACE programs. The Department of Social Services, upon entering into a contract for the provision of prescription drug coverage to medical assistance recipients receiving services in a managed care setting as provided by section 17b-266a, shall in consultation with the Medicaid Pharmaceutical and Therapeutics Committee, expand the preferred drug list for use in the HUSKY Plan, Part A and Part B. To the extent feasible, the department shall review all drugs included on the preferred drug lists at least every twelve months, and may recommend additions to, and deletions from, the preferred drug lists, to ensure that the preferred drug lists provide for medically appropriate drug therapies for Medicaid, state-administered general assistance and ConnPACE patients. For the fiscal year ending June 30, 2004, such drug lists shall be limited to use in the Medicaid and ConnPACE programs and cover three classes of drugs, including proton pump inhibitors and two other classes of drugs determined by the Commissioner of Social Services. Not later than June 30, 2005, the Department of Social Services, in consultation with the Medicaid Pharmaceutical and Therapeutic Committee shall expand such drug lists to include other classes of drugs, except as provided in subsection (f) of this section, in order to achieve savings reflected in the amounts appropriated to the department, for the various components of the program, in the state budget act.

(f) Except for mental-health-related drugs and antiretroviral drugs, reimbursement for a drug not included on the preferred drug lists are subject to prior authorization.

(g) The Department of Social Services and any entity that administers a Medicaid managed care health plan shall publish and disseminate the current preferred drug lists, all of their prior authorization request forms, and complete descriptions of their prior authorization processes to all Medicaid providers in the state. The Department of Social Services and any entity that administers a Medicaid managed care health plan shall publish and provide timely updates to information required to be published pursuant to this subsection on any website maintained by the department or such entity. The department shall also provide such information and timely updates to such information through the department's mailed bulletin system.

(h) The committee shall ensure that the pharmaceutical manufacturers agreeing to provide a supplemental rebate pursuant to 42 USC 1396r-8(c) have an opportunity to present evidence supporting inclusion of a product on the preferred drug lists unless a court of competent jurisdiction, in a final decision, determines that the Secretary of Health and Human Services does not have authority to allow such supplemental rebates, provided the inability to utilize supplemental rebates pursuant to this subsection shall not impair the committee's authority to maintain preferred drug lists. Upon timely notice, the department shall ensure that any drug that has been approved, or had any of its particular uses approved, by the United States Food and Drug Administration under a priority review classification, will be reviewed by the Medicaid Pharmaceutical and Therapeutics Committee at the next regularly scheduled meeting. To the extent feasible, upon notice by a pharmaceutical manufacturer, the department shall also schedule a product review for any new product at the next regularly scheduled meeting of the Medicaid Pharmaceutical and Therapeutics Committee.

(i) Factors considered by the department and the Medicaid Pharmaceutical and Therapeutics Committee in developing the preferred drug lists shall include, but not be limited to, clinical efficacy, safety and cost effectiveness of a product.

(j) The Medicaid Pharmaceutical and Therapeutics Committee may also make recommendations to the department regarding the prior authorization of any prescribed drug covered by Medicaid in accordance with the plan developed and implemented pursuant to section 17b-491a.

(k) Medicaid, state-administered general assistance and ConnPACE recipients, and their prescribers, may appeal any [department] preferred drug list determinations by the department or any entity that administers a Medicaid managed health care plan utilizing the Medicaid fair hearing process administered by the Department of Social Services established pursuant to chapter 54.

(l) The Commissioner of Social Services may contract with a pharmacy benefits organization or a single entity qualified to negotiate with pharmaceutical manufacturers for supplemental rebates, available pursuant to 42 USC 1396r-8(c), for the purchase of drugs listed on the preferred drug lists established pursuant to subsection (e) of this section.

Sec. 3. (NEW) (Effective July 1, 2005) No later than October 1, 2005, the Department of Social Services shall enter into a contract with an outside organization for an independent study and survey, the results of which shall be presented to the joint standing committees of the General Assembly having cognizance of matters relating to public health, human services and appropriations and the budgets of state agencies, to detect any access problems incurred by Medicaid, state-administered general assistance or ConnPACE recipients, attributable to the use of preferred drug lists by the department or an entity that administers a Medicaid managed care health plan. The study and survey shall include, but not be limited to:

(1) The number of recipients under each program and under each entity that administers a Medicaid managed care health plan who, each month for an identified six-month period, present to a pharmacy a prescription for a drug not listed on a preferred drug list without first having obtained prior authorization, who are (A) authorized to receive a temporary supply of the prescribed drug immediately, (B) prescribed a different drug in the same therapeutic class not later than fifteen days after the date of presenting the prescription, and (C) not prescribed a drug in the same therapeutic class during such fifteen-day period;

(2) The number of recipients under each program and under each entity that administers a Medicaid managed care health plan, for an identified six-month period, whose prescribers request prior authorization for drugs not listed on a preferred drug list, whether such requests for prior authorization are granted or denied; and of those requests that are denied, the number of recipients who request hearings to challenge the denial; whose hearings are then decided in favor of the recipient, or for whom prior to the hearing decision, the decision to deny the prescribed drug is reversed;

(3) A random survey of Medicaid, state-administered general assistance and ConnPACE providers to ascertain whether they have encountered any drug access problems attributable to preferred drug lists or have limited their participation in any program due in whole, or in part to such problems; and

(4) A random survey of Medicaid, state-administered general assistance and ConnPACE recipients to ascertain whether they have encountered any drug access problems attributable to preferred drug lists, including any problems necessitating medical treatment as a result of lack of access to a drug not listed on a preferred drug list.

This act shall take effect as follows and shall amend the following sections:

Section 1

July 1, 2005

17b-274

Sec. 2

July 1, 2005

17b-274d

Sec. 3

July 1, 2005

New section

HS

Joint Favorable C/R

APP