BILL NUMBER: AB 2151 CHAPTERED 09/28/04 CHAPTER 851 FILED WITH SECRETARY OF STATE SEPTEMBER 28, 2004 APPROVED BY GOVERNOR SEPTEMBER 28, 2004 PASSED THE ASSEMBLY AUGUST 27, 2004 PASSED THE SENATE AUGUST 24, 2004 AMENDED IN SENATE AUGUST 23, 2004 AMENDED IN SENATE AUGUST 16, 2004 AMENDED IN SENATE AUGUST 9, 2004 AMENDED IN SENATE JUNE 22, 2004 AMENDED IN SENATE JUNE 15, 2004 AMENDED IN ASSEMBLY MAY 20, 2004 AMENDED IN ASSEMBLY APRIL 13, 2004 AMENDED IN ASSEMBLY MARCH 22, 2004 INTRODUCED BY Assembly Member Jackson (Coauthor: Senator Ortiz) FEBRUARY 18, 2004 An act to add Section 14132.01 to the Welfare and Institutions Code, relating to Medi-Cal. LEGISLATIVE COUNSEL'S DIGEST AB 2151, Jackson. Medi-Cal: reimbursement rates: community and free clinics. Existing law provides for the regulation and licensure of community and free clinics by the State Department of Health Services. Existing law provides an exemption from the licensure requirement for an intermittent clinic that is operated by a primary care community or free clinic, but that is operated on separate premises from the licensed clinic and is only open for limited services of no more than 20 hours a week. Existing law authorizes these clinics to purchase drugs at wholesale for administration or dispensing, under the direction of a physician, to patients registered for care at the clinic. Existing law provides for the Medi-Cal program, which is administered by the department and under which qualified low-income persons receive health care benefits, including drugs, prosthetic and orthotic devices, durable medical equipment, medical supplies, and enteral formulae. Existing law provides for the reimbursement of pharmacies that provide these drugs and products under the Medi-Cal program. Existing law requires the department to establish the maximum allowable ingredient cost for drugs. Existing regulations of the department provide that reimbursement of licensed community clinics and free clinics under the Medi-Cal program for take-home drugs shall not exceed the amounts payable for "drug ingredient cost" established by the department. Pursuant to a federal waiver, the Medi-Cal program administers a program known as the Family Planning, Access, Care, and Treatment (Family PACT) Waiver Program, under which comprehensive clinical family planning services are provided to any person who has a family income at or below 200% of the federal poverty level and who is eligible to receive those services pursuant to the terms of the waiver. This bill would provide that a licensed community care clinic or free clinic or an intermittent clinic, with a valid license described above to purchase drugs at wholesale for administration or dispensing, shall comply with billing amount requirements, and be subject to maximum reimbursement rates, established by the bill for any take-home drugs and supplies provided under the Medi-Cal program or the Family PACT Waiver Program. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. It is the intent of the Legislature in enacting this act that its provisions only apply to the amount of money that a community clinic or free clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code, or an intermittent clinic operating pursuant to subdivision (h) of Section 1206 of the Health and Safety Code, that has a valid license pursuant to Article 13 (commencing with Section 4180) of Chapter 9 of Division 2 of the Business and Professions Code may charge the Medi-Cal program and the Family Planning, Access, Care, and Treatment (Family PACT) Waiver Program and that this act shall not impact the rate paid by either the Medi-Cal program or the Family PACT Waiver Program. SEC. 2. Section 14132.01 is added to the Welfare and Institutions Code, to read: 14132.01. Notwithstanding any other provision of law, a community clinic or free clinic licensed pursuant to subdivision (a) of Section 1204 of the Health and Safety Code or an intermittent clinic operating pursuant to subdivision (h) of Section 1206 of the Health and Safety Code, that has a valid license pursuant to Article 13 (commencing with Section 4180) of Chapter 9 of Division 2 of the Business and Professions Code, and is a covered entity, as defined in Section 256b(a)(4) of Title 42 of the United States Code, shall bill the Medi-Cal program and the Family PACT Waiver Program for any take-home drugs, eligible for reimbursement pursuant to Section 340B of the federal Public Health Service Act (42 U.S.C. Sec. 256b), provided to beneficiaries, an amount equal to the lesser of the clinic's average annual actual acquisition cost for that drug plus a per cycle, per month, per unit, or per prescription clinic dispensing fee up to twelve dollars ($12), or its usual charge made to the general public. Take-home drugs that are dispensed for use by the patient within a specific timeframe of five or less days from the date medically indicated shall be billed at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed seventeen dollars ($17) per prescription, or its usual charge made to the general public. Take-home supplies may be billed at the usual charge made to the general public. Reimbursement shall be at the lesser of the amount billed or the Medi-Cal reimbursement rate and shall not exceed the net cost of these drugs or products as provided to retail pharmacies under the Medi-Cal program. Federally qualified health centers and rural health clinics that have elected to be reimbursed for pharmacy costs based on the rate as provided pursuant to subdivision (k) of Section 141532.100, are exempt from this paragraph.