BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1114|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 1114
Author: Eggman (D)
Amended: 8/24/16 in Senate
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
SENATE HEALTH COMMITTEE: 7-0, 8/22/16 (pursuant to Senate Rule
29.10)
AYES: Hernandez, Hall, Mitchell, Monning, Pan, Roth, Wolk
NO VOTE RECORDED: Nguyen, Nielsen
SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/23/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza
NO VOTE RECORDED: Nielsen
SUBJECT: Medi-Cal: pharmacist services
SOURCE: Author
DIGEST: This bill requires pharmacist services to be a benefit
under the Medi-Cal program, establishes a list of covered
pharmacist services that may be provided to a Medi-Cal
beneficiary, and requires the Department of Health Care Services
(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.
ANALYSIS:
AB 1114
Page 2
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
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 the following services are covered pharmacist
services that may be provided to a Medi-Cal beneficiary:
a) Furnishing travel medications;
b) Furnishing naloxone hydrochloride (for opioid
overdoes treatment);
AB 1114
Page 3
c) Furnishing self-administered hormonal
contraception;
d) Initiating and administering immunizations;
and,
e) Providing tobacco cessation counseling and
furnishing nicotine replacement therapy.
3) Requires covered pharmacist services to be subject to
DHCS protocols and utilization controls.
4) 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.
5) 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.
6) Prohibits this bill from restricting or prohibiting any
services currently provided by pharmacists as authorized by
law, including but not limited to, under the Medi-Cal program
or California's Medicaid state plan.
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
AB 1114
Page 4
taking regulatory action.
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.
Background
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.
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
AB 1114
Page 5
medications not requiring a diagnosis that are 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.
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
prescribed drug, these would be two billable services. Under
this bill, the pharmacy will 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.
AB 1114
Page 6
Comments
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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
1)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).
2)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 this 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. This 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.
3)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).
AB 1114
Page 7
Under this 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.
SUPPORT: (Verified 8/23/16)
California Pharmacists Association
California Retailers Association
National Association of Chain Drug Stores
Rite Aid Pharmacies
OPPOSITION: (Verified8/23/16)
None received
ARGUMENTS IN SUPPORT: The California Pharmacists Association
(CPhA) writes in support that this bill will 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
AB 1114
Page 8
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.
Prepared by:Scott Bain / HEALTH / (916) 651-4111
8/24/16 18:31:51
**** END ****