BILL ANALYSIS Ó SB 146 Page 1 Date of Hearing: June 12, 2013 ASSEMBLY COMMITTEE ON INSURANCE Henry T. Perea, Chair SB 146 (Lara) - As Amended: March 6, 2013 SENATE VOTE : 32-0 SUBJECT : Workers' compensation: pharmacy claims SUMMARY : Repeals the requirement that a copy of a prescription is a necessary element of a claim for reimbursement for a medication provided to an injured worker. Specifically, this bill : 1)Provides that a copy of a prescription for pharmaceutical services is not necessary unless required under a written agreement between an employer, insurer, or third-party claims administrator and a pharmacy. 2)Allows an employer insurer, or third-party claims administrator to request a copy of the prescription during a review of any records of prescription drugs dispensed by a pharmacy. 3)Provides that any entity that submitted a pharmacy bill for payment on or after January 1, 2013, and was denied payment for not including a copy of the prescription from the treating physician, shall have 90 days after January 1, 2014, to resubmit those bills for payment. EXISTING LAW : 1)Establishes a workers' compensation system that provides benefits to an employee who suffers from an injury or illness that arises out of and in the course of employment, irrespective of fault. 2)Provides that medical, surgical, chiropractic, acupuncture, and hospital treatment, including nursing, medicines, medical and surgical supplies, crutches, and apparatuses, including orthotic and prosthetic devices and services, that is reasonably required to cure or relieve the injured worker from the effects of his or her injury shall be provided by the employer. SB 146 Page 2 3)Requires that any provider of medical services, including pharmacies, must submit, as a condition required to obtain payment for services or supplies provided, a request for payment with an itemization of services provided and the charge for each service, a copy of all reports showing the services performed, the prescription or referral from the primary treating physician if the services were performed by a person other than the primary treating physician, and any evidence of authorization for the services that may have been received. FISCAL EFFECT : Unknown. COMMENTS : 1)Purpose . According to the author, the workers' compensation reform enacted last year (SB 863 (De Leon), Statutes 2012, Chapter 363) contained a provision that is unnecessary, burdensome, and incompatible with the Division of Workers' Compensation's (DWC) electronic billing standard for pharmacy billings - which does not support attachments that would be necessary to comply with the literal requirements of the new statute (i.e., providing an actual copy of a prescription that was issued electronically or telephonically). In the administrative process implementing SB 863, pharmacy interests sought a remedy to this problem, but the DWC (correctly) concluded that the problem is statutory, and legislation is required. This bill is designed to narrowly resolve this problem. 2)Urgency clause . Proponents are seeking to amend the bill with an urgency clause, and appropriate language is with the Committee in Legislative Counsel form. However, it requires a separate vote of the Committee to place the urgency clause into the bill. Proponents have provided the Committee with records indicating that legitimate pharmacy bills have been denied based solely on the failure of the biller to comply with the statutory requirement that is virtually impossible to comply with. 3)Denied bills . The bill currently allows a 90-day period after the bill would be effective (January 1, 2014) during which a biller could re-submit a bill that was denied for failure to comply with the specific requirement that the bill is SB 146 Page 3 changing. This provision is necessary because SB 863 also added a requirement that services be billed within a short time frame after the services were rendered. If the Committee agrees to adopt the urgency clause, the grace provision should also be modified so that a biller could submit denied bills immediately after the bill is signed, as opposed to having to wait until January. The Committee has appropriate amendments in Legislative Counsel form to accomplish this change. 4)Contractual agreements . Proponents have also agreed to add a provision that would require a pharmacy biller to include a copy of the prescription if it has entered into a contractual arrangement with a payor to include the copy. The Committee has appropriate amendments in Legislative Counsel form to accomplish this change. REGISTERED SUPPORT / OPPOSITION : Support CompPharma (source) California Pharmacists Association California Retailers Association CVS/Caremark Express Scripts Holding Company Healthesystems Modern Medical, Inc. National Association of Chain Drug Stores Pharmacy Management Services Inc. (PMSI) Progressive Medical StoneRiver Pharmacy Solutions Opposition None received. Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086