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