BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1114 (Eggman) - Medi-Cal: pharmacist services ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 15, 2016 |Policy Vote: Health 7-0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: Yes |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 23, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 1114 would require pharmacist services to be a covered benefit in the Medi-Cal program, with specified requirements. Fiscal Impact: One-time costs of $400,000 to $600,000 to make changes to the system for processing Medi-Cal payments to allow pharmacist services to be reimbursed at the rate level specified in the bill (25% General Fund and 75% federal funds). Unknown cost savings due to a shift from services being provided by physicians to those services being provided by pharmacists (General Fund and federal funds). Under the bill, Medi-Cal beneficiaries would be able to access certain services from a pharmacist without the need to see a physician to get a prescription. The bill requires pharmacists to be reimbursed at 85% of the rate paid to physicians. The extent of the cost savings from shifting from physician services to pharmacist services is unknown. AB 1114 (Eggman) Page 1 of ? Likely overall cost savings to the Medi-Cal program due to increased utilization of certain drugs prescribed and dispensed by pharmacists (General Fund and federal funds). Under the bill, it is likely that there will be increased utilization of certain drugs, because it will be easier for some Medi-Cal beneficiaries to access those drugs directly from pharmacist without the need for a physician visit. Under current law, the drugs that can be provided by a pharmacist in this manner include smoking cessation drugs, contraceptives, naloxone (a drug that prevents opioid overdoses), and immunizations. These types of drugs have been shown to result in overall health care cost savings, so it is likely that any overall increase in their utilization by Medi-Cal beneficiaries is likely to reduce long-term Medi-Cal spending. Background: Under state and federal law, the Department of Health Care Services operates the Medi-Cal program, which provides health care coverage to low income individuals, families, and children. Medi-Cal provides coverage to childless adults and parents with household income up to 138% of the federal poverty level and to children with household income up to 266% of the federal poverty level. The federal government provides matching funds that vary from 50% to 90% of expenditures depending on the category of beneficiary. Under current law, Medi-Cal reimburses pharmacists for drugs dispensed (including both the cost of the drug and the administrative costs of dispensing drugs). Medi-Cal does not reimburse pharmacists for medical evaluations, consultations with patients or prescribing drugs to patients. Current law allows pharmacists who meet specified requirements to prescribe certain drugs directly, without the need for a prescription from a physician (or other practitioner such as a nurse practitioner). Under these laws, a pharmacist can prescribe and dispense contraceptives, smoking cessation drugs, and naloxone (a drug used to prevent opioid overdoses) and other drugs or services. The implementing regulations for those laws have recently been adopted, allowing certain pharmacists to begin prescribing those drugs. AB 1114 (Eggman) Page 2 of ? Proposed Law: AB 1114 would require pharmacist services to be a covered benefit in the Medi-Cal program, with specified requirements. Specific provisions of the bill would: Establish pharmacist services as a Medi-Cal benefit, subject to federal approval; Require the Department of Health Care Services to develop a list of pharmacist services that are reimbursable under the Medi-Cal program; Require the Department to establish a fee schedule for pharmacist services, with reimbursement rates set at 85% of physician services; Require covered pharmacist services to only include services provided consistent with the laws governing the scope of practice of pharmacists; Require covered pharmacist services to be subject to department protocols and utilization controls; Require a pharmacist to be enrolled as a Medi-Cal provider prior to rendering a pharmacist service; Require the Department to seek any necessary federal approvals; Authorize the Department to implement the bill without adopting regulations, but also require the Department to adopt regulations by July 1, 2021. This bill is an urgency measure. Related legislation: AB 2084 (Wood) would have provided Medi-Cal coverage for comprehensive medication management. AB 2084 was held on the Assembly Appropriations Committee's suspense file. Staff comments: This bill previously addressed enrollment and eligibility requirements for Covered California and the Medi-Cal program. As drafted, the requirements of the bill would only directly impact the fee-for-service Medi-Cal program. However, because Medi-Cal managed care plans are required by law to provide equivalent benefits to the fee-for-service benefits, the bill will indirectly require Medi-Cal managed care plans to provide coverage for equivalent services. Because all of the services addressed by the bill are already Medi-Cal benefits, Medi-Cal AB 1114 (Eggman) Page 3 of ? managed care plans would likely have some latitude to offer those benefits through pharmacists or continue to provide them through their contracted physicians. Committee amendments: Staff recommends the bill be amended to specify which services shall be eligible for coverage by Medi-Cal as pharmacist services - specifically, furnishing contraceptives, providing tobacco cessation counseling and furnishing nicotine replacement therapy, furnishing naloxone, administering immunizations, and furnishing travel medications. -- END --