BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 1114 --------------------------------------------------------------- |AUTHOR: |Eggman | |---------------+-----------------------------------------------| |VERSION: |August 15, 2016 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |August 22, | | | | |2016 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Scott Bain | --------------------------------------------------------------- PURSANT TO SENATE RULE 29.10 SUBJECT : Medi-Cal: pharmacist services SUMMARY : Requires pharmacist services to be a benefit under the Medi-Cal program, requires the Department of Health Care Services (DHCS) to develop a list of pharmacist services that are reimbursable to an enrolled Medi-Cal pharmacy provider, and requires DHCS to establish a fee schedule for the list of pharmacist services to be 85% of the fee schedule for physician services under the Medi-Cal program. Existing law: 1)Establishes the Medi-Cal program, which is administered by DHCS, under which qualified low-income individuals receive health care services, including certain prescription drugs. 2)Establishes a schedule of benefits under the Medi-Cal program, which includes outpatient prescription drugs, subject to utilization controls and the Medi-Cal list of contract drugs. Requires reimbursement to Medi-Cal pharmacy providers for drugs, as prescribed, and authorizes the department to establish a new reimbursement methodology based on average acquisition cost, as defined. 3)Requires, under the Pharmacy Law, pharmacists to be licensed and regulated by the California State Board of Pharmacy in the Department of Consumer Affairs. Establishes, under the Pharmacy Law, the functions pharmacists are authorized to perform, including administering drugs and biological products that have been ordered by a prescriber, furnishing self-administered hormonal contraceptives, nicotine AB 1114 (Bonilla) Page 2 of ? replacement products, prescription medications not requiring a diagnosis that are recommended for international travelers, and naloxone hydrochloride. This bill: 1)Requires pharmacist services to be a benefit under the Medi-Cal program, subject to approval by the federal Centers for Medicare and Medicaid Services. 2)Requires DHCS to develop a list of pharmacist services that are reimbursable to an enrolled Medi-Cal pharmacy provider. 3)Requires DHCS to establish a fee schedule for the list of pharmacist services, and requires the rate of reimbursement for pharmacist services to be 85% of the fee schedule for physician services under the Medi-Cal program. 4)Limits covered pharmacist services provided to a Medi-Cal beneficiary to include only those services provided by a pharmacist consistent with the laws governing his or her scope of practice. 5)Requires covered pharmacist services to be subject to DHCS protocols and utilization controls. 6)Requires a pharmacist to be enrolled as an ordering, referring, and prescribing provider under the Medi-Cal program prior to rendering a pharmacist service that is submitted by a Medi-Cal pharmacy provider for reimbursement. 7)Requires the DHCS director to seek any necessary federal approvals to implement this bill. Implements this bill only when necessary federal approvals are obtained, and only to the extent that federal financial participation is available. 8)Permits DHCS to implement, interpret, or make specific this bill, and any applicable federal waivers and state plan amendments, by means of all-county letters, plan letters, plan or provider bulletins, or similar instructions, without taking regulatory action. AB 1114 (Bonilla) Page 3 of ? 9)Requires DHCS, by July 1, 2021, to adopt regulations in accordance with the requirements of the Administrative Procedure Act. Requires DHCS, commencing July 1, 2017, to provide a status report to the Legislature on a semiannual basis until regulations have been adopted. 10)Contains an urgency clause that will make this bill effective upon enactment. FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. COMMENTS : 1)Author's statement. According to the author, according to the author, regulations finalized in 2016 allow California pharmacists to provide hormonal contraceptives, the opioid overdose drug naloxone, and nicotine replacing products for smoking cessation directly to patients. This bill will improve access to these vital health services by authorizing DHCS to establish a system for pharmacists to provide services in the Medi-Cal program. 2)Background. This previous version of this bill dealt with forms and notices issued through CalHEERS, the Covered California eligibility and enrollment system. The August 15, 2016 deleted the previous contents and inserted the above-described language. The Pharmacy Law provides for the licensing and regulation of pharmacists by the California State Board of Pharmacy in the Department of Consumer Affairs. The law specifies the scope of practice pharmacists are authorized to perform, including to administer, orally or topically, drugs and biologicals pursuant to a prescriber's order, and to administer immunizations pursuant to a protocol with a prescriber. Pharmacists may also furnish emergency contraception drug therapy pursuant to standardized procedures if they have completed a training program. SB 493 (Hernandez, Chapter 469, Statutes of 2013) and AB 1535 (Bloom, Chapter 326, Statutes of 2014), expanded the scope of practice of pharmacists. Among other provisions, SB 493 authorizes pharmacists to furnish self-administered hormonal contraceptives, nicotine replacement products, and prescription medications not requiring a diagnosis that are AB 1114 (Bonilla) Page 4 of ? recommended for international travelers, as specified. Additionally, SB 493 authorized pharmacists to order and interpret tests for the purpose of monitoring and managing the efficacy and toxicity of drug therapies, and to independently initiate and administer routine vaccinations, as specified. AB 1535 authorized a pharmacist to furnish naloxone hydrochloride in accordance with standardized procedures or protocols developed and approved by both Pharmacy Board and the Medical Board of California, in consultation with specified entities. Board of Pharmacy regulations implementing these bills took effect in 2016. Medi-Cal reimbursement to pharmacies currently consists of two components: (a) a professional dispensing fee and (b) payment for the drug dispensed (referred to as "drug ingredient costs"). The dispensing fee is currently $7.25 per prescription and $8 per prescription for drugs dispensed to beneficiaries in skilled nursing and intermediate care facilities. The purpose of this bill is to require Medi-Cal to establish a separate reimbursement structure for pharmacist services. DHCS has provided technical assistance on the language in this bill. As drafted, DHCS indicates this bill would only apply to fee-for-service (FFS), as the change is being made to the provisions of the Welfare and Institutions Code specific to the Medi-Cal FFS benefit, and describes Medi-Cal direct reimbursement to FFS pharmacy providers. DHCS' criteria for an item to be added as a pharmacist-reimbursable service is the service must already a Medi-Cal benefit (currently paid as a medical service and the billing codes would remain the same), and the service must be within the pharmacist's scope of practice. DHCS indicates the proposed pharmacist services currently include the medical evaluation and consultation (and prescription, if appropriate) for hormonal contraception, smoking cessation, and the opioid antagonist naloxone. DHCS will identify the list of pharmacist services in a provider bulletin and all-plan letter (if applicable), then follow up with updated regulations. DHCS indicates if a pharmacist counsels the patient under their expanded scope of practice and prescribes a medication under their current scope of practice, and then dispenses the AB 1114 (Bonilla) Page 5 of ? prescribed drug, these would be two billable services. Under this bill, the pharmacy would be reimbursed for a medical service provided by a pharmacist. DHCS indicates this service is separate and distinct from the dispensing of the drug, for which they also would be reimbursed for the drug ingredient cost, plus the $7.25 dispensing fee. 3)Related legislation. AB 2084 (Wood) would have provided Medi-Cal coverage for comprehensive medication management, is defined as the process of care that ensures each beneficiary's medications are appropriate, safe, and effective, and are being used as intended. AB 2084 also defines beneficiaries, goals, and related requirements, and requires DHCS to study the effectiveness and costs. AB 2084 was held on the Assembly Appropriations Committee suspense file. 4)Support. The California Pharmacists Association (CPhA) writes in support that this bill would establish a system for pharmacists to provide services in the Medi-Cal program. CPhA argues this bill will expand access to a number of important preventative health care services for Medi-Cal beneficiaries. CPhA argues regulations finalized this year provide pharmacists with new authority, including furnishing hormonal contraceptives, certain tobacco cessation drugs, recommended travel medicines, and the opioid overdose drug naloxone directly to patients. These authorities allow pharmacists to provide patients with direct access to important health care services. CPhA argues this bill ensures that Medi-Cal patients can benefit from the direct access to these health care services envisioned by the Legislature. Under existing law, pharmacists are not eligible "providers" in Medi-Cal and their services cannot be reimbursed. Pharmacies are reimbursed for drugs and a limited dispensing fee to cover the cost of dispensing. Federal rules do not allow a dispensing fee to cover the costs associated with these new pharmacist services. This bill allows pharmacies to bill for services provided by pharmacists to Medi-Cal patients. Pharmacies would be reimbursed at 85% of the physician reimbursement rate, offering increased access to patients and savings to the state. As the state looks to manage the cost, quality of care, and access challenges posed by the over 12 million Californians enrolled in the Medi-Cal program, CPhA concludes the state needs to concentrate its efforts on smart solutions such as this bill. AB 1114 (Bonilla) Page 6 of ? SUPPORT AND OPPOSITION : Support: California Pharmacists Association California Retailers Association National Association of Chain Drug Stores Rite Aid Pharmacies Oppose: None received -- END --