Amended in Assembly March 28, 2016

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 4425 of the Business and Professions Code, relating to pharmacies.

LEGISLATIVE COUNSEL’S DIGEST

AB 2712, as amended, Chiu. Pharmacies: Medi-Cal program participation.

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 begin delete program end delete begin insert Program end insert 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. begin insert Existing law prohibits Medicare beneficiaries from being allowed to use the Medi-Cal reimbursement rate for over-the-counter medications or compound medications. Existing law provides that these provisions do not apply to a prescription that is covered by insurance. Existing law requires the department to conduct an outreach program to inform Medicare beneficiaries of their right to participate in this program. end insert

This bill would begin delete 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. end delete begin insert expand these provisions to also apply to any patient upon presentation of a valid prescription for the patient and evidence of residency in California. The bill would provide that for purposes of these provisions “covered by insurance” does not apply to a prescription for a specific medication prescribed for a patient that is not included on the drug formulary maintained by that patient’s health care service plan or health insurer, and for which the patient is prepared to pay cash. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

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 begin delete card, end delete begin insert card or evidence of
residency in California, such as a state-issued identification card
or state-issued motor vehicle driver’s license, end insert shall charge
Medicare beneficiaries begin insert or other patients end insert 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 begin insert or other patients end insert 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 begin insert and
California residents generally, end insert 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 begin insert and other
eligible patients end insert 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 begin delete program, end delete begin insert Program, end insert 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
begin insert for Medicare beneficiaries end insert under those circumstances.

(f) This section shall not apply to a prescription that is covered
by insurance. begin insert For purposes of this section, “covered by insurance”
does not apply to a prescription for a specific medication
prescribed for a patient that is not included on the drug formulary
maintained by that patient’s health care service plan or health
insurer, and for which the patient is prepared to pay cash. end insert

begin delete

SECTION 1.  

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

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.

(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.

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

(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.

end delete