BILL ANALYSIS �
AB 378
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 378 (Solorio)
As Amended September 8, 2011
Majority vote
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|ASSEMBLY: |72-2 |(May 31, 2011) |SENATE: |37-8 |(September 9, |
| | | | | |2011) |
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Original Committee Reference: INS.
SUMMARY : Regulates the dispensing of compounded medications and
other pharmacy goods in the workers' compensation system.
The Senate amendments :
1)Redraft the billing and reimbursement methodology for
compounded medications provided by a pharmacy by requiring a
billing to break down ingredients, and limiting reimbursement
to ingredients with a National Drug Code number.
2)Establish a maximum 20% mark-up over documented acquisition
cost for most pharmacy goods dispensed by a physician from the
physician's office, including compounded medications.
3)Authorize a 300%, but capped at a maximum of $20, mark-up for
compounded medications dispensed by a physician from the
physician's office.
4)Authorize full fee schedule reimbursement for repackaged
FDA-approved prescription drugs that are dispensed by a
physician from the physician's office.
5)Provide that the Administrative Director (AD) of the Division
of Workers' Compensation (DWC) may adjust the pharmacy
reimbursement level if the Medi-Cal fee schedule, to which
workers' compensation pharmacy reimbursement is tied, is
reduced for purely Medi-Cal budgetary purposes.
6)Clarify that the prohibition on physician financial interest
in the sale of pharmacy goods does not apply to certain
clinics operated at defined retail establishments.
7)Adopt chaptering out amendments to ensure consistency with SB
AB 378
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923 (DeLeon).
EXISTING LAW :
1)Provides for a comprehensive system of workers' compensation
benefits for injuries to employees arising out of or in the
course of employment. Injured workers are entitled to
appropriate medical treatment, including necessary
medications, among other benefits.
2)Provides for a fee schedule to govern the amount that a
provider may charge for medications, generally requiring
payment based on the Medi-Cal fee schedule.
3)Requires, by regulation, that physicians dispensing medication
directly to patients from bulk supplies bill at the amount the
Medi-Cal schedule requires for the amount of medication being
dispensed.
AS PASSED BY THE ASSEMBLY , this bill proposed a more complicated
billing and reimbursement mechanism for pharmacy products
dispensed by a physician from the physician's office, and did
not address repackaged medications or the Medi-Cal reimbursement
reduction contained in the Budget Act.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, to a similar version of the bill, savings to the
state of approximately $4 million in workers' compensation
costs. Pursuant to Senate Rule 28.8, this bill was determined
to have no state costs, and no fiscal analysis was published.
COMMENTS : The basic policy arguments for and against this bill
remain the same as when the Assembly first considered the bill.
Labor and management support the bill as a necessary regulatory
control of an acknowledged abusive practice. Opponents argue
that the solution proposed by the bill is too broad, and impacts
not just the abusive practices, but also legitimate practices.
Proponents respond with two points: first, a physician is
always authorized to write a prescription for a medically
necessary medication to be filled by a pharmacy, and the bill
does not contain limitations for this transaction where the
physician has no financial interest in the product; second, the
bill authorizes the AD to take administrative action to
establish exceptions or wholesale changes to the bill's
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provisions if evidence arises that the bill's limitations are
creating access issues.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086
FN: 0002876