BILL NUMBER: SB 708	CHAPTERED  09/06/05

	CHAPTER  207
	FILED WITH SECRETARY OF STATE  SEPTEMBER 6, 2005
	APPROVED BY GOVERNOR  SEPTEMBER 6, 2005
	PASSED THE ASSEMBLY  AUGUST 18, 2005
	PASSED THE SENATE  MAY 26, 2005
	AMENDED IN SENATE  MAY 4, 2005
	AMENDED IN SENATE  APRIL 25, 2005
	AMENDED IN SENATE  APRIL 11, 2005

INTRODUCED BY   Senator Speier

                        FEBRUARY 22, 2005

   An act to add Part 5.7 (commencing with Section 17800) to Division
9 of the Welfare and Institutions Code, relating to health care.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 708, Speier  Drug discount program: conditions of
participation.
    Existing law establishes the federal Medicaid program,
administered by each state, California's version of which is the
Medi-Cal program. The Medi-Cal program, which is administered by the
State Department of Health Services, provides qualified low-income
persons with health care services.
   Existing federal law requires the United States Secretary of
Health and Human Services to enter into an agreement with each
manufacturer of covered drugs that are not subject to a rebate under
an agreement between the state Medicaid program and the manufacturer
under which the amount required to be paid to the manufacturer for
covered drugs, with certain exceptions, purchased by a covered
entity, as defined, does not exceed an amount equal to the average
manufacturer price for the drug under the federal Medicaid program in
the preceding calendar quarter, reduced by the rebate received
pursuant to the Medicaid agreement.
   This bill would require the State Department of Health Services to
develop a standard contract for private nonprofit hospitals whereby
a hospital that elects to participate in the drug discount program
established under federal law shall agree to provide charity care on
a continuing basis.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Part 5.7 (commencing with Section 17800) is added to
Division 9 of the Welfare and Institutions Code, to read:

      PART 5.7.  HEALTH CARE FOR LOW-INCOME PERSONS NOT COVERED BY
THE MEDICARE PROGRAM OR THE MEDI-CAL PROGRAM

   17800.  A not-for-profit hospital that elects to participate in
the drug discount program established under Section 340B of the
Public Health Service Act may enter into an agreement with the State
Department of Health Services for that purpose, which shall be
subject to this part.
   17801.  The State Department of Health Services shall develop a
standard contract for use in an agreement entered into pursuant to
Section 17800, which shall include, but not be limited to, the
following terms:
   (a) Initially upon contracting with the State Department of Health
Services pursuant to Section 17800, the not-for-profit hospital
shall agree to continue its historic commitment to the provision of
charity care, as reported to the Office of Statewide Health Planning
and Development.
   (b) The term of the contract shall continue until terminated by
either party upon not less than 60 days' prior written notice to the
other party.