Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2712

Introduced by Assembly Member Chiu

February 19, 2016

An act to amend Section begin delete 16000 end delete begin insert 4425 end insert of the Business and Professions Code, relating to begin delete business regulations. end delete begin insert pharmacies. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2712, as amended, Chiu. begin delete Business regulation. end delete begin insert Pharmacies: Medi-Cal program participation. end insert

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Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions. Existing law requires reimbursement to Medi-Cal pharmacy providers for drugs, as prescribed. As a condition for the participation of a pharmacy in the Medi-Cal program, and subject to specified exceptions, existing law requires the pharmacy, upon presentation of a valid prescription for a patient and the patient’s Medicare card, to charge Medicare beneficiaries a price that does not exceed the Medi-Cal reimbursement rate for prescription medicines and an amount, as set by the department, to cover electronic transmission charges.

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This bill would require the State Department of Health Care Services, on or before February 1, 2017, to report to the Legislature on the effectiveness of the Medi-Cal pharmacy procedures described above, as specified, and other options and strategies to achieve the greatest savings on prescription drugs for patients.

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Existing law permits the legislative body of an incorporated city, in the exercise of its police power, to license any kind of business not prohibited by law that is transacted and carried on within its jurisdiction. Existing law prohibits the application of license fees, if measured by the licensee’s income or gross receipts, to specified nonprofit organizations, among others.

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This bill would make nonsubstantive changes to these provisions.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 4425 of the end insert begin insert Business and Professions
Code end insert begin insert is amended to read: end insert

4425.  

(a) As a condition for the participation of a pharmacy
in the Medi-Cal program pursuant to Chapter 7 (commencing with
Section 14000) of Division 9 of the Welfare and Institutions Code,
the pharmacy, upon presentation of a valid prescription for the
patient and the patient’s Medicare card, shall charge Medicare
beneficiaries a price that does not exceed the Medi-Cal
reimbursement rate for prescription medicines, and an amount, as
set by the State Department of Health Care Services to cover
electronic transmission charges. However, Medicare beneficiaries
shall not be allowed to use the Medi-Cal reimbursement rate for
over-the-counter medications or compounded prescriptions.

(b) The State Department of Health Care Services shall provide
a mechanism to calculate and transmit the price to the pharmacy,
but shall not apply the Medi-Cal drug utilization review process
for purposes of this section.

(c) The State Department of Health Care Services shall monitor
pharmacy participation with the requirements of subdivision (a).

(d) The State Department of Health Care Services shall conduct
an outreach program to inform Medicare beneficiaries of their
right to participate in the program described in subdivision (a),
including, but not limited to, the following:

(1) Including on its Internet Web site the Medi-Cal
reimbursement rate for, at minimum, 200 of the most commonly
prescribed medicines and updating this information monthly.

(2) Providing a sign to participating pharmacies that the
pharmacies shall prominently display at the point of service and
at the point of sale, reminding the Medicare beneficiaries to ask
that the charge for their prescription be the same amount as the
Medi-Cal reimbursement rate and providing the department’s
telephone number, e-mail address, and Internet Web site address
to access information about the program.

(e) If prescription drugs are added to the scope of benefits
available under the federal Medicare program, the Senate Office
of Research shall report that fact to the appropriate committees of
the Legislature. It is the intent of the Legislature to evaluate the
need to continue the implementation of this article under those
circumstances.

(f) This section shall not apply to a prescription that is covered
by insurance.

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(g) (1) On or before February 1, 2017, the State Department
of Health Care Services shall submit a report to the appropriate
policy and fiscal committees of the Legislature on the effectiveness
of subdivision (a), with data derived pursuant to subdivisions (b)
to (d), inclusive, and other data as the department deems necessary.
The department also shall include in the report other options and
strategies to achieve the greatest savings on prescription drugs
for patients.

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(2) A report submitted pursuant to this subdivision shall be
submitted in compliance with Section 9795 of the Government
Code.

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(3) The requirement for submitting a report imposed under this
subdivision is inoperative on February 1, 2021, pursuant to Section
10231.5 of the Government Code.

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SECTION 1.  

Section 16000 of the Business and Professions
Code is amended to read:

16000.  

(a) The legislative body of an incorporated city may,
in the exercise of its police power, and for the purpose of
regulation, as herein provided, and not otherwise, license any kind
of business not prohibited by law transacted and carried on within
the limits of its jurisdiction, including all shows, exhibitions and
lawful games, and may fix the rates of the license fee and provide
for its collection by suit or otherwise. Any legislative body,
including the legislative body of a charter city, that fixes the rate
of license fees pursuant to this subdivision upon a business
operating both within and outside the legislative body’s taxing
jurisdiction, shall levy the license fee so that the measure of the
fee fairly reflects that proportion of the activity actually carried
on within the taxing jurisdiction.

(b) A license fee levied pursuant to subdivision (a) that is
measured by the licensee’s income or gross receipts, whether levied
by a charter or general law city, shall not apply to any nonprofit
organization that is exempted from taxes by Chapter 4
(commencing with Section 23701) of Part 11 of Division 2 of the
Revenue and Taxation Code or Subchapter F (commencing with
Section 501) of Chapter 1 of Subtitle A of the Internal Revenue
Code of 1986, or the successor of either, or to any minister,
clergyman, Christian Science practitioner, rabbi, or priest of any
religious organization that has been granted an exemption from
federal income tax by the United States Commissioner of Internal
Revenue as an organization described in Section 501(c)(3) of the
Internal Revenue Code or a successor to that section.

(c) Before a city, including a charter city, issues a business
license to a person to conduct business as a contractor, as defined
in Section 7026, the city shall verify that the person is licensed by
the Contractors’ State License Board.

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