BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1114 (Eggman) - Medi-Cal:  pharmacist services
          
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          |Version: August 15, 2016        |Policy Vote: Health 7-0         |
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          |Urgency: Yes                    |Mandate: No                     |
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          |Hearing Date: August 23, 2016   |Consultant: Brendan McCarthy    |
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          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. 







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           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.










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          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  








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          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.


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