Amended in Senate June 19, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2340

Introduced by Assembly Member Garcia

February 21, 2014

An act to amend Section begin delete 131019.5 of the Health and Safety end delete begin insert 14132.01 of the Welfare and Institutions end insert Code, relating to begin delete public health end delete begin insert Medi-Cal end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 2340, as amended, Garcia. begin delete State Department of Public Health: Office of Health Equity. end delete begin insert Medi-Cal: benefits: clinic costs for drugs and supplies. 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 provides for a department-administered uniform schedule of health care benefits. Existing law sets the cost that specified clinics bill the Medi-Cal program and the Family PACT Waiver Program for drugs and supplies at an aggregate amount equivalent to the sum of the actual acquisition cost of a drug or supply plus a clinic dispensing fee not to exceed $12 per billing unit, as specified. Existing law sets the cost for a take-home drug that is dispensed for use by the patient within a specific timeframe of 5 or less days from the date medically indicated at the actual acquisition cost for that drug plus a clinic dispensing fee, not to exceed $17 per prescription. Existing law sets the reimbursement at the lesser of the amount billed or the Medi-Cal reimbursement rate and caps reimbursement at the net cost of these drugs or supplies when provided by retail pharmacies under the Medi-Cal program.

end insert begin insert

This bill would remove the cap on the dispensing fees. The bill would require the clinic dispensing fee to be the difference between the actual acquisition cost of a drug or supply, to be calculated not less than annually, and the Medi-Cal reimbursement rate. The bill would also remove the cap on reimbursement that is based on the cost of drugs or supplies provided by retail pharmacies.

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Existing law requires the State Department of Public Health to establish an Office of Health Equity, led by the Deputy Director of the Office of Health Equity, for the purposes of aligning state resources, decisionmaking, and programs to accomplish various goals, including improving the health status of all populations and places, with a priority on eliminating health and mental health disparities and inequities. Existing law requires the office to establish an advisory committee, as specified, to advance the goals of the office and to actively participate in decisionmaking.

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This bill would authorize the deputy director to include on the advisory committee representatives from women’s health organizations that focus on health disparities and inequalities related to gender.

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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 14132.01 of the end insert begin insert Welfare and Institutions
Code end insert begin insert is amended to read: end insert

14132.01.  

(a) Notwithstanding any other provision of law, a
community clinic or free clinic licensed pursuant to subdivision
(a) of Section 1204 of the Health and Safety Code or an intermittent
clinic operating pursuant to subdivision (h) of Section 1206 of the
Health and Safety Code, that has a valid license pursuant to Article
13 (commencing with Section 4180) of Chapter 9 of Division 2
of the Business and Professions Code shall bill and be reimbursed,
as described in this section, for drugs and supplies covered under
the Medi-Cal program and Family PACT Waiver Program.

(b) (1) A clinic described in subdivision (a) shall bill the
Medi-Cal program and Family PACT Waiver Program for drugs
and supplies covered under those programs at the lesser of cost or
the clinic’s usual charge made to the general public.

(2) For purposes of this section, “cost” means an aggregate
amount equivalent to the sum of the actual acquisition cost of a
drug or supply plus a clinic dispensing begin delete fee not to exceed twelve
dollars ($12) per billing unit as identified in either the Family
PACT Policies, Procedures, and Billing Instructions Manual, or
the Medi-Cal Inpatient/Outpatient Provider Manual governing
outpatient clinic billing for drugs and supplies, as applicable. For
purposes of this section, “cost” for a take-home drug that is
dispensed for use by the patient within a specific timeframe of five
or less days from the date medically indicated means actual
acquisition cost for that drug plus a clinic dispensing fee, not to
exceed seventeen dollars ($17) per prescription. Reimbursement
shall be at the lesser of the amount billed or the Medi-Cal
reimbursement rate, and shall not exceed the net cost of these drugs
or supplies when provided by retail pharmacies under the Medi-Cal
program. end delete begin insert fee. The actual acquisition cost of a drug or supply shall
be calculated not less than annually. The clinic dispensing fee
shall be the difference between the actual acquisition cost of a
drug or supply and the Medi-Cal reimbursement rate. end insert

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(c) Reimbursement shall be at the lesser of the amount billed
or the Medi-Cal reimbursement rate.

end insert begin delete

(c)

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begin insert (d) end insert  A clinic described in subdivision (a) that furnishes services
free of charge, or at a nominal charge, as defined in subsection (a)
of Section 413.13 of Title 42 of the Code of Federal Regulations,
or that can demonstrate to the department, upon request, that it
serves primarily low-income patients, and its customary practice
is to charge patients on the basis of their ability to pay, shall not
be subject to reimbursement reductions based on its usual charge
to the general public.

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(d)

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begin insert (e) end insert  Federally qualified health centers and rural health clinics
that are clinics as described in subdivision (a) may bill and be
reimbursed as described in this section, upon electing to be
reimbursed for pharmaceutical goods and services on a
fee-for-service basis, as permitted by subdivision (k) of Section
14132.100.

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(e)

end delete

begin insert (f) end insert  A clinic that otherwise meets the qualifications set forth in
subdivision (a), that is eligible to, but that has elected not to, utilize
drugs purchased under the 340B Discount Drug Program for its
Medi-Cal patients, shall provide notification to the Health
Resources and Services Administration’s Office of Pharmacy
Affairs that it is utilizing non-340B drugs for its Medi-Cal patients
in the manner and to the extent required by federal law.

All matter omitted in this version of the bill appears in the bill as amended in the Assembly, March 28, 2014 . (JR11)