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 --