HB693 HD1

Report Title:

State Pharmacy Assistance Program

Description:

Establishes a Hawaii Medicare Prescription Drug Assistance Program to provide benefits to certain elderly and disabled individuals to assist in defraying costs for medically necessary prescriptions under the new federal Medicare part D drug benefit program. (HB693 HD1)

HOUSE OF REPRESENTATIVES	H.B. NO.	693
TWENTY-THIRD LEGISLATURE, 2005		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO A STATE PHARMACY ASSISTANCE PROGRAM.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The purpose of this Act is to establish a state pharmacy assistance program to assist eligible elderly and disabled individuals to defray the cost of medically necessary prescriptions under the new medicare part D drug benefit program.

SECTION 2. Chapter 346, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . Hawaii State pharmacy assistance program

§346-A Definitions. As used in this part:

"Asset test" means the asset limits for eligibility in the state pharmacy assistance program as defined by the Medicare Modernization Act and any amendments thereto.

"Contractor" means the person, partnership, or corporate entity that has an approved contract with the department to administer the state pharmacy assistance program.

"Department" means the department of human services.

"Enrollee" means a state resident who meets the conditions specified in this part and in department rules relating to eligibility for participation in the state pharmacy assistance program and whose application for enrollment in the state pharmacy assistance program has been approved by the department.

"Federal poverty level" means the federal poverty level updated annually in the Federal Register by the United States Department of Health and Human Services under the authority of title 42 United States Code section 9902(2).

"Liquid assets" means assets used in the eligibility determination process as defined by the Medicare Modernization Act.

"Medicaid dual eligible" means a person who is eligible for both medicaid and medicare as defined by the Medicare Modernization Act.

"Medicare Modernization Act" means the federal Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173).

"Medicare part D prescription drug benefit" means the federal prescription benefit provided under the Medicare Modernization Act.

"Prescription drug plan" means a plan provided by non-governmental entities under contract with the federal Centers for Medicare and Medicaid Services to provide prescription benefits under the Medicare Modernization Act.

"Resident" means a person who lives within this state and has a fixed place of residence in this state, with the present intent of maintaining a permanent home in this state for the indefinite future.

"State pharmacy assistance program" means the Hawaii medicare prescription drug assistance program established under section 346-B.

§346-B Hawaii medicare prescription drug assistance program. (a) There is established within the department the Hawaii state pharmacy assistance program which shall be known as the Hawaii medicare prescription drug assistance program. The state pharmacy assistance program shall coordinate the prescription drug coverage with the federal medicare part D prescription drug benefit, including related supplies, as determined by the department, to each resident that meets the requirements as outlined in section 346-C.

(b) The department is authorized to assist eligible individuals to enroll into the state pharmacy assistance program. The department shall give initial enrollment priority to the medicaid dual eligible population. A second enrollment priority shall be afforded to medicare eligible applicants with an annual household income of up to one hundred fifty per cent of the federal poverty level who also meet the asset test. Enrollment for medicaid dual eligible persons shall begin no later than October 1, 2005.

(c) The department may select one or more prescription drug plan or plans, as approved by the federal Centers for Medicare and Medicaid Services, as the preferred plan or plans of the state pharmacy assistance program to provide coordination of benefits between the Hawaii medicare prescription drug assistance program and the medicare part D drug benefit.

(d) The department may administer the state pharmacy assistance program or contract with a third party or parties in accordance with chapter 103F to administer any single component or combination of components of the state pharmacy assistance program, including outreach, eligibility, enrollment, claims, administration, rebate negotiations and recovery, and redistribution, to coordinate the prescription drug benefits of the state pharmacy assistance program and the federal medicare part D drug benefit.

(e) Any contract with third parties to administer any component of the state pharmacy assistance program shall be established either at no cost to the State, or on a contingency-fee basis and with no up-front costs to the State, as may be negotiated by the department.

(f) Any contract with third parties to administer any component of the state pharmacy assistance program shall prohibit the contractor from receiving any compensation or other benefits from any pharmaceutical manufacturer participating in the state pharmacy assistance program.

(g) The department shall require that pharmaceutical manufacturers provide medicaid-level rebates to the Hawaii medicare prescription drug assistance program that equal the rebates received by the Hawaii medicaid program. Products of pharmaceutical manufacturers that do not provide these rebates shall not be available to enrollees as a benefit under the state pharmacy assistance program. Rebates must be no less than those provided to medicaid under section 1927 of title XIX of the Social Security Act, title 42 United States Code section 139-6r-8.

(h) The department may prescribe the application and enrollment procedures for prospective enrollees.

(i) The department shall conduct ongoing quality assurance activities similar to those used in the Hawaii medicaid program.

§346-C Eligibility. (a) All residents of the State shall be eligible to participate in the state pharmacy assistance program; provided that the person:

(1) Is a resident of Hawaii;

(2) Is sixty-five years or older, or is disabled and receiving a social security benefit;

(3) Has a household income at or below one hundred fifty per cent of the federal poverty level;

(4) Meets the asset test;

(5) Is not a member of a medicare advantage plan that provides prescription drug benefits; and

(6) Is not a member of a retirement plan under which the person receives a benefit under the Medicare Modernization Act.

(b) State pharmacy assistance program applicants who are enrolled in any other public assistance program providing pharmaceutical benefits, other than the Medicare Modernization Act, shall not be eligible for the state pharmacy assistance program as long as they receive pharmaceutical benefits from that other public assistance program, unless the applicant is eligible for medicare. Residents who qualify for, or are enrolled in, the Hawaii Rx plus program shall be eligible for the state pharmacy assistance program; provided that they meet all other state pharmacy assistance program requirements.

(c) State pharmacy assistance program applicants who are enrolled in a private sector plan or have insurance that provides payments for prescription drugs are ineligible to receive benefits from the state pharmacy assistance program.

§346-D Benefits. (a) For persons meeting the eligibility requirements in section 346-C, the state pharmacy assistance program may pay all or some of the deductibles, co-insurance payments, premiums and co-payments required under the federal medicare part D pharmacy benefit program, subject to receipt of sufficient rebates pursuant to section 346-B(g), as determined by the department.

(b) The state pharmacy assistance program shall be the payor of last resort, and shall only cover pharmaceutical costs not covered by the medicare part D program.

§346-E Special fund. (a) There is established within the state treasury to be administered by the department, the state pharmacy assistance program special fund, into which shall be deposited:

(1) All moneys received from manufacturers who pay rebates as provided in section 346-B(g);

(2) Appropriations made by the legislature to the fund;

(3) Any other revenues designated for the fund; and

(4) Any interest or income from the moneys in the fund.

(b) Moneys in the state pharmacy assistance program special fund may be used for the following purposes:

(1) Reimbursement payments to participating pharmacies for deductibles, co-insurance payments, premiums, or co-payments required under the federal medicare part D pharmacy benefit program as provided to state pharmacy assistance program participants;

(2) The costs of administering the state pharmacy assistance program, including salary and benefits of employees, computer costs, and costs of services contracted under section 346-B(d); and

(3) Any other purpose deemed necessary by the department for the purpose of operating and administering the state pharmacy assistance program.

All interest on special fund balances shall accrue to the special fund. Upon dissolution of the state pharmacy assistance program special fund, any unencumbered moneys in the fund shall lapse to the general fund.

§346-F Administrative rules. The department shall adopt rules pursuant to chapter 91 necessary for the purposes of this part.

§346-G Annual reports. The department shall report the enrollment and financial status of the state pharmacy assistance program to the legislature no later than twenty days prior to the convening of each regular session, beginning with the 2006 regular session."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $1 or so much thereof as may be necessary for fiscal year 2005-2006 to establish the state pharmacy assistance program special fund.

The sum appropriated shall be expended by the department of human services for the purposes of this Act.

SECTION 4. In codifying the new sections added to chapter 346, Hawaii Revised Statutes, by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 5. This Act shall take effect on July 1, 2020.