BILL ANALYSIS Ó
AB 1114
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Date of Hearing: August 30, 2016
ASSEMBLY COMMITTEE ON HEALTH
Jim Wood, Chair
AB 1114
(Eggman) - As Amended August 24, 2016
SUBJECT: Medi-Cal: pharmacist services
Requires specified pharmacy services to be covered under
Medi-Cal, and specifies the rate of reimbursement for these
services at 85% of the fee schedule for physician services under
Medi-Cal. Contains an urgency clause to ensure that the
provisions of this bill go into immediate effect after
enactment. Specifically, this bill:
1)Specifies the following pharmacy services as a benefit under
the Medi-Cal program, subject to approval by the federal
Centers for Medicare and Medicaid Services:
a) Furnishing travel medications;
b) Furnishing naloxone hydrochloride;
c) Furnishing self-administered hormonal contraception;
d) Initiating and administering immunizations; and,
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e) Providing tobacco cessation counseling and furnishing
nicotine replacement therapy.
2)Requires the Department of Health Care Services (DHCS) to do
the following: a) establish a fee schedule for the list of
pharmacist services; and, b) specify the rate of reimbursement
to be at 85% of the fee schedule for physician services under
Medi-Cal.
3)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 under this bill.
4)Requires the Director of DHCS to seek any necessary federal
approvals for purposes of this bill, prohibits implementation
until such approvals are obtained, and implemented only if
federal financial participation is available.
5)Specifies that this bill does not restrict nor prohibit any
services currently provided by pharmacists as authorized by
law, as specified.
6)Authorizes DHCS to implement, interpret, or make specific this
bill, without taking any regulatory action, as specified.
Requires DHCS to adopt regulations by July 1, 2021 and provide
a status report to the Legislature, as specified.
The Senate amendments require specified pharmacist services to
be covered under Medi-Cal.
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AS PASSED BY THE ASSEMBLY, this bill clarified existing law
regarding the documents necessary to retain eligibility,
benefits, or services from Medi-Cal and subsidized programs
under Covered California, as defined; in doing so, required
these documents to be translated into the same threshold
languages required for Medi-Cal managed care plans.
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)Establishes the Pharmacy Act to regulate the practice of
pharmacy under the California Board of Pharmacy (BOP).
FISCAL EFFECT: 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 this
bill (25% General Fund and 75% federal funds).
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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).
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 a 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.
COMMENTS:
1)PURPOSE OF THIS BILL. According to the author, regulations
were recently finalized (2016) to 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 the DHCS to
establish a system for pharmacists to provide services in the
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Medi-Cal program. This bill was not introduced earlier this
year because the last regulations to implement new pharmacist
authorities were not finalized until after the bill
introduction deadline. Discussions have since progressed with
DHCS on the best structure for this bill. The author
concluded this bill is necessary to pass this bill this year
so that Medi-Cal patients can gain access to these health care
services right away.
2)BACKGROUND. As passed by the Assembly, this bill clarified
existing law regarding the documents necessary to retain
eligibility, benefits or services from Medi-Cal and subsidized
programs under Covered California, as defined. The August 15,
2016 amendments deleted the previous content and inserted the
above-described language.
The Pharmacy Act authorizes pharmacists to furnish compounded
drug products, transmit a valid prescription to another
pharmacist, and administer drugs and biologicals pursuant to a
prescriber's order. SB 493 (Hernandez), Chapter 469, Statutes
of 2013, expanded the scope of pharmacists to authorize them
to furnish self-administered hormonal contraceptives,
vaccines, nicotine replacement products, and travel
medications. Additionally, SB 493 authorized the BOP to
recognize Advance Practice Pharmacists (APP) who can perform
patient assessments, order and interpret drug therapy-related
tests, refer patients to other health care providers,
participate in the evaluation and management of diseases and
health conditions in collaboration with other health care
providers, and initiate, adjust, or discontinue drug therapy.
AB 1535 (Bloom), Chapter 326, Statutes of 2014, additionally
authorized pharmacists to furnish naloxone hydrochloride.
Regulations were adopted by the BOP on the furnishing of
naloxone and nicotine replacement products on January 2016 and
the furnishing of self-administered hormonal contraceptives
were adopted in April 2016. The regulations for the
furnishing of travel medications, and administration of
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vaccinations are currently pending.
Medi-Cal reimbursement to pharmacies currently consists of two
components: a) a professional dispensing fee; and, b) payment
for the drug dispensed or referred to as "drug ingredient
costs." The current dispensing fee is $7.25 per prescription
and $8 per prescription for drugs dispensed to beneficiaries
in skilled nursing and intermediate care facilities. This
bill establishes a separate reimbursement structure for
pharmacist services.
DHCS provided technical language on this bill, and points out
that this bill only applies to fee-for-service. For an item
to be added as a pharmacist-reimbursable service, the service
must already be a Medi-Cal benefit, and the service must be
within the pharmacist's scope of practice. Under this bill,
medical evaluation, consultation, and prescription, as
appropriate, would be reimbursed for hormonal contraception,
smoking cessation, and naloxone hydrochloride. A list of
pharmacist services will be determined by DHCS in a provider
bulletin and all-plan letter (if applicable) then followed 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 would be reimbursed for a medical
service provided by a pharmacist. This service is separate
and distinct from the dispensing of the drug, for which they
also would be reimbursed for the drug, plus the $7.25
dispensing fee.
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On the federal level, H.R. 592 is currently pending and
establishes the Pharmacy and Medically Underserved Areas
Enhancement Act which includes pharmacist in the list of
healthcare providers under Medicare, and provides for
reimbursement for pharmacist services either at an 80% of the
lesser of the actual charge or 85% of the fee schedule amount,
if such service had been furnished by a physician.
3)RELATED LEGISLATION. AB 2084 (Wood) of the current
legislative session would have provided Medi-Cal coverage for
comprehensive medication management, would have defined the
process of care that ensured each beneficiary's medications
were appropriate, safe, and effective, and are being used as
intended. It would have also defined beneficiaries, goals,
and related requirements, and required 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) states
that 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, allowing pharmacists to provide patients
with direct access to important health care services. 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.
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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.
CPhA notes that this bill was substantially amended in the
Senate, in which the subject matter was not heard in an Assembly
policy committee this legislative session.
Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916) 319-2097